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RE: America’s New Coal Rush

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RE: America’s New Coal Rush
by Decius at 4:54 pm EDT, May 27, 2004

Hijexx wrote:
] Natural gas gets more expensive, so we start reverting to
] coal. It doesn't look like they are really trying to exploit
] unconventional gas.

They aren't monolithic. Certainly there are a lot of people working on exploiting new sources of gas. Other people are apparently building coal plants. Some coal development was probably inevitable given the supply. The advantage of a free market economy is that every avenue gets pursued. We're not bound to a single strategy.

] Economics would dictate that since gas
] prices are higher, that would start to make unconventional gas
] become conventional gas.
]
] It doesn't appear to be panning out quite like that though.
] Why the rush to start building coal fired electric plants?
] It's cheap. You tell me, are we that dependent on keeping the
] status-quo of current energy prices? By the actions of our
] energy policy planners, it appears so.

These are businesses, not planners. They always choose the cheapest supply. Like I said, some coal development is inevitable. The question seems to be what are the costs in terms of pollution.

The U.S. has a commodities trading system that incents companies to reduce emmisions by setting quotas and allowing those who beat the quota to sell their emmissions to those who don't. That way people who make serious efforts to reduce emmisions actual earn money from doing so. The way to address this is within that framework.

It might make sense to move to a more directly managed system where there is an absolute total quantity of allowable emmisions and everyone has to buy in, including people who bring new coal plants online. If the market is managed properly it would create an economic disincentive to developments like this which might offset other cost advantages, without requiring that people use particular solutions. It also allows us to think about pollution management in an systemic way instead of having local political debates on a plant by plant basis.

RE: America’s New Coal Rush


 
 
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