Despite Drop in Coal Use, Most States Remain Dependent on Coal Imports, Draining Billions from Local Economies

WASHINGTON (Jan. 14, 2014) – The nation is using less coal to produce electricity, but many states are still heavily dependent on it--and for them, the cost of importing coal from other states and even some foreign countries continues to be a drain on local economies, according to new data from the Union of Concerned Scientists (UCS). Consumers in those states would be better served if more money were spent in state on local renewable energy development and energy efficiency measures.
 
Thirty-seven states were net importers of coal in 2012 (the most recent data available), paying a total of $19.4 billion to import 433 million tons of coal from other states and nations. Of these states, eight spent more than $1 billion each on net coal imports. Sixty percent of domestic coal comes from just three states (Wyoming, West Virginia and Kentucky), while foreign coal burned in U.S. coal plants mainly comes from Colombia.

“Power providers in many states are taking billions of dollars out of their local economies to send across state lines and, in some cases, overseas,” said Jeff Deyette, assistant director of energy research at UCS. “This money can be better spent on investments in homegrown clean energy sources, which keep more money in these states and helps support local economies.”

The new analysis is a follow up to UCS’ 2010 “Burning Coal, Burning Cash” report that ranked states’ expenditures on coal imports using 2008 data. The report released today ranks states based on 2012 data. Texas tops the new ranking list, having spent $1.85 billion on out-of-state coal. Rounding out the top 10 states most dependent on coal imports (in ranked order) are North Carolina, Georgia, Missouri, Florida, Michigan, South Carolina, Alabama, Tennessee and Wisconsin.

The analysis found that coal generation and coal imports have declined overall in the country. Between 2008 and 2012, expenditures on net coal imports fell by nearly a quarter, from $25.7 billion to $19.4 billion. Expenditures on coal imports from other countries dropped by 75 percent – from 16 states spending $1.8 billion in 2008, to seven states spending $464 million in 2012.

“Ohio’s shift away from coal imports is one of the most dramatic, with a 67 percent drop between 2008 and 2012. As a result, the state fell from fifth to sixteenth place,” said Deyette. “Georgia fell from first place to third, due to a 36 percent reduction in spending on coal imports.”

This decline in imports comes as more and more utilities are switching off 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 of obsolete and economically uncompetitive coal-fired power capacity were retired. (UCS documented the declining economic viability of coal-fired power plants in a recent report, “Ripe for Retirement: An Economic Analysis of the U.S. Coal Fleet.”)

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.

“Natural gas burns more cleanly than coal, but it does have a history of price volatility and, as a fossil fuel, is not a sufficient long-term solution to the climate change crisis,” said Deyette. “A better solution would be to replace more coal generation with renewable energy and energy efficiency.”

The changing economics of coal, combined with pending federal standards for carbon emissions from new and existing power plants, will go far to spur the transition to a clean energy economy, but to make the full transition we need strong renewable electricity and efficiency standards, tax incentives, and improved planning and development of the power grid.

“Cutting coal imports by developing local renewable energy sources and instituting energy efficiency programs would boost state economies, reduce electricity price volatility, and cut global warming emissions,” said Deyette. “The time is ripe to invest in innovative clean energy technologies close to home.”

Detailed fact sheets for Alabama, Florida, Georgia, Illinois, Michigan, Minnesota, North Carolina, Ohio, and Tennessee can be found here.

The 10 Most Coal-Dependent States: Expenditures on Net Coal Imports (2012)