The use of coal to produce electricity in the United States has been declining in recent years. Yet for most states still heavily dependent on coal-fired power, the cost of importing coal continues to be a drain on local economies. According to a new Union of Concerned Scientists (UCS) analysis, 37 states were net importers of coal in 2012, paying a total of $19.4 billion to import 433 million tons of coal from other states and even some foreign countries. Instead of sending billions of ratepayer dollars out of those states year after year, consumers would be better served by investing more in local renewable energy development and energy efficiency measures.
The states most dependent on net coal imports
In 2012, Texas tops the list of most coal import-dependent states, having spent $1.85 billion on out-of-state coal. Rounding out the top 10 in ranked order are North Carolina, Georgia, Missouri, Florida, Michigan, South Carolina, Alabama, Tennessee, and Wisconsin. Of these states, eight spent more than $1 billion each on net coal imports. The remaining states that were net importers of coal in 2012 are spread throughout the United States, though the most heavily dependent ones are found in the Southeast and Midwest (see map).
Our national ranking is based on state-level net import costs, which is simply the cost to buy imported coal less any revenue gained from exporting locally mined coal. However, most coal-consuming states have no in-state coal supplies, and so must import all of the coal they burn each year. That is true for more than 70 percent of the 37 net coal importing states, and for eight of the states in the top 10 ranking.
The coal producers
If a majority of states are coal importers, where does all the coal come from? Most of the nation’s coal comes from just three states: Wyoming, West Virginia, and Kentucky, which together accounted for 60 percent of U.S. coal production in 2012. These three states are also the source of 82 percent of the coal that gets exported by barge, rail, or truck to other states. However, one state alone, Wyoming, increasingly dominates the coal production market thanks to the low cost of extraction from its massive strip mines and the low-sulfur content of its coal resources. All of Texas’ coal imports, for example, come from Wyoming.
Surprisingly, some of the coal burned in U.S. power plants also comes from overseas. In 2012, seven states spent $464 million on foreign coal sources, though 96 percent of these shipments went to just two states: Alabama and Florida. Most of the overseas coal comes from Colombia, but some even travels from as far away as Indonesia.
Coal use and coal imports are declining
This new analysis is a follow up to UCS’ 2010 Burning Coal, Burning Cash report that ranked states’ expenditures on coal imports using 2008 data. That allows for some comparison of findings between the two studies.
Between 2008 and 2012, expenditures on net coal imports fell by nearly a quarter, from $25.7 billion to $19.4 billion, and net coal imports by weight declined by 30 percent (down to 433 million tons from 618 million tons). Expenditures on coal imports from other countries dropped even further, from $1.8 billion in 2008 to $464 million in 2012, a decline of 75 percent.
This decline in imports coincides with the decisions by more and more utilities to ramp down or shut down their coal-fired power generators in favor of more competitive natural gas and renewable energy. Coal-fired electricity fell from almost half of the U.S. power mix in 2008 to 37 percent in 2012, as generators that provided nearly 24 gigawatts (GW) of obsolete and economically uncompetitive coal-fired power capacity were retired. Another 41 GW of uneconomic coal are slated for closure over the next several years, and many more U.S. coal generators were identified as ripe for retirement in a recent UCS analysis.
Most net coal importing states experienced drops in their out-of-state expenditures between 2008 and 2012 (see table). Two of the most dramatic shifts away from coal imports during this time came in Ohio, which experienced a 67 percent decline, and in Georgia, which reduced its coal imports by 36 percent.
A rush to natural gas
In the case of both Ohio and Georgia (and many other states), the decline in dependence on coal generation and coal imports comes primarily as a result of a large-scale shift toward generation from lower-cost natural gas. From 2008 to 2012, coal generation in Ohio fell from 85 percent to 67 percent while natural gas generation increased from less than 2 percent to 17 percent. In Georgia, coal generation declined from 63 percent to 33 percent while natural gas generation more than tripled from 10 percent to 35 percent.
While switching from coal to natural gas offers some near-term air quality and cost benefits, there is growing evidence that an overreliance on natural gas poses significant and complex risks to consumers, the economy, and the climate. And in the case of the many states that have to import all the natural gas they consume, like Georgia, it creates a new dependency on an out-of-state fossil fuel.
Choosing renewable energy and efficiency first
Instead of over-relying on natural gas to replace polluting coal generation, a better solution for consumers and the environment would be to invest more in renewable energy and energy efficiency. Every state has untapped potential for deploying these clean energy resources.
Energy efficiency is one of the quickest and most affordable ways to meet consumers’ energy needs while reducing dependence on coal. Some coal import-dependent states have strong policies to reduce electricity use, such as ratepayer-funded energy efficiency programs, and standards requiring utilities to meet targets for saving energy. However, many of the states most dependent on imported coal lag far behind in adopting such policies.
States can also reduce their dependence on imported coal and boost local economic development by investing in homegrown renewable energy resources like wind, solar, and bioenergy. Thanks to the declining costs of wind and solar nationally and strong state policies such as renewable energy standards, places like Minnesota, Michigan, and North Carolina are already cutting their coal imports by developing renewable energy. Twenty-nine states have adopted such standards, requiring utilities to gradually increase their use of renewable energy.
State and federal policies promoting energy efficiency and renewable energy, and pending federal standards for carbon emissions from new and existing power plants, are essential for accelerating the growth of the clean energy economy. These policies will also help to further cut coal imports, reduce the risks of an overreliance on natural gas, and deliver important economic and environmental benefits.
Instead of depending on out-of-state coal, the time is ripe to invest in innovative clean energy technologies close to home.