The Business Case for Coal

coal stackCommon logic says that despite the surge in interest in renewable and clean energy, coal remains a dominant part of our fuel mix, and will likely remain so for many years.  Our infrastructure for a renewable energy grid is in full speed development, but remains years away from shifting the tremendous burden of powering our nation’s energy needs.  Coal creates jobs.  It’s one of the main reasons why it’s a hard industry to kill.  The lobby for coal is very powerful, and even Democrats from coal states are timid in voting against a coal-dependent future.

And besides, wind, solar, biomass, geothermal and other renewables cost much more, right?  Not so fast my friend.

The coal industry is subsidized by our government.

If that is surprising to anyone, then clearly the coal industry has done a number on public perceptions.  For example:  Duke Energy, a major utility servicing several eastern U.S. states, has a power mix that is predominantly coal.  It is the third largest carbon emitter in the U.S.  The company and its maverick CEO Jim Rogers are rankling feathers in the coal industry by talking about climate change.  Other coal-heavy utilities such as Southern Power and AEP, in contrast, are taking firm stances against carbon regulation.  In its recent sustainability report, Duke cites gaining $460 million in subsidies for a new coal plant in Indiana from state and federal government agencies.  To modernize their Cliffside coal power plant, they are receiving $125 million in federal tax credits.

Why, dear God, why, are we subsidizing coal?   Sure it creates jobs.  So would subsidizing the roller skating industry.

Subsidies for coal, globally, are higher than the entire industry’s market capitalization, according to Gil Friend, founder and CEO of Natural Logic and author of The Truth About Green Business.  Any second rate middle manager or bean counter can make that business decision.  We have to pay more every year than the entire industry is worth.  Would any business person with half a brain do anything other than SHUT IT DOWN?

Scott Cooney is the author of Build a Green Small Business:  Profitable Ways to Become an Ecopreneur (McGraw-Hill)

Twitter:  ScottCooney

Scott Cooney, Principal of GreenBusinessOwner.com and author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill, November 2008), is also a serial ecopreneur who has started and grown several green businesses and consulted several other green startups. He co-founded the ReDirect Guide, a green business directory, in Salt Lake City, UT. He greened his home in Salt Lake City, including xeriscaping, an organic orchard, extra natural fiber insulation, a 1.8kW solar PV array, on-demand hot water, energy star appliances, and natural paints. He is a vegetarian, an avid cyclist, ultimate frisbee player, and surfer, and currently lives in the sunny Mission district of San Francisco. Scott is working on his second book, a look at microeconomics in the green sector.In June 2010, Scott launched GreenBusinessOwner.com, a sustainability consulting firm dedicated to providing solutions to common business problems by leveraging the power of the triple bottom line. Focused exclusively on small business, GBO's mission is to facilitate the creation and success of small, green businesses.