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University of Pittsburgh School of Law 2013 Energy Law & Policy Institute David Spence

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute David Spence August 1, 2013. Gas Displacing Coal in Electric Mix Market Effects Shale gas boom Future: relative prices Regulation: “war on coal” Climate rules Other rules Survival of Rules Power plant NSPS

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University of Pittsburgh School of Law 2013 Energy Law & Policy Institute David Spence

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  1. University of Pittsburgh School of Law 2013 Energy Law & Policy Institute David Spence August 1, 2013

  2. Gas Displacing Coal in Electric Mix • Market Effects • Shale gas boom • Future: relative prices • Regulation: “war on coal” • Climate rules • Other rules • Survival of Rules • Power plant NSPS • existing plants rule? • NAAQS revisions • CSAPR

  3. Gas Displacing Coal in Electric Mix • Market Effects • Shale gas boom • Future: relative prices

  4. Share of Electricity Production for Coal, Natural Gas, and Non-Hydro Renewables, 1949-2012 2005: Nat. Gas Wellhead Price = $7.33/mcf Wider use of mountaintop removal reduces costs of coal mining 2012: Nat. Gas Wellhead Price = $2.66/mcf 56% 37% First horizontal wells fracked in the Barnett Shale 30% 5% 9% Arab Oil Embargo: reduced use of oil and gas for electricity generation New generation of EPA rules developed a Data source, US EIA

  5. Coal and Gas Prices, 2004-12

  6. Gas Displacing Coal in Electric Mix • Market Effects • Shale gas boom • Future: relative prices Gas futures vs. coal futures Natural gas exports? Technological change – CCS? UCG?

  7. Gas Displacing Coal in Electric Mix • Market Effects • Shale gas boom • Future: relative prices • Regulation: “war on coal” • Climate rules • Other rules EPA’s “War on Coal”? GHGs NSPS for new power plants GHG regulation for existing plants? CSAPR MATS NAAQS revisions (NOx, PM) Once-through cooling rule Coal ash rule

  8. Recent Yale polling on climate change – conflicting signals

  9. SOURCE: Muller, Mendelsohn, and Nordhaus, AER, 2011

  10. SOURCE: Muller, Mendelsohn, and Nordhaus, AER, 2011

  11. More than any other electric generation fuel, coal does not pay its way. FIGURE SOURCE: Skeptical Science “Epstein” refers to Epstein et al., Full Cost Accounting for the Life Cycle of Coal, Annals of the NY Acad. of Science, 2011.

  12. Gas Displacing Coal in Electric Mix • Market Effects • Shale gas boom • Future: relative prices • Regulation: “war on coal” • Climate rules • Other rules • Survival of Rules • Power plant NSPS • existing plants rule? • NAAQS revisions • CSAPR

  13. Thank you

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