Alternatives to Coal For Power Generation: Comparing Energy Sources on an Economic, Political, and Environmental Basis

In recent years, various forces have reduced the global demand for coal and severely crippled the economic outlook of the coal mining industry.  The United Nations Economic Council for Europe (UNECE) and its Group of Experts on Coal Mine Methane asked the Capstone team to analyze the economic and social impacts of this declining national coal market by looking at U.S. case studies. 

The research conducted for this report revealed several important trends. U.S. coal production has been declining, while decreasing costs have enabled natural gas and renewables to displace coal. These market factors, in addition to falling global steel demand and more stringent regulations, have contributed to the steady fall of U.S. coal prices. Detailed case studies portray how excessive optimism about the coal sector led to aggressive investment and growth strategies, with major companies taking  on massive debt to finance asset acquisitions.  While diversification and low-cost/high-efficiency mining operations have allowed some coal companies to survive, these surviving companies still face financial distress. The research also suggests that the potential for coalbed methane to assist in coal sector diversification is limited.

The report identified the threat that coal sector bankruptcy and economic woes pose to U.S. coal mining communities, and suggested various ways to support those communities. This work is significant because it identifies the best and worst practices of the U.S. coal sector and translates them for use in the European context.