The report also points to the fallacy of our belief in never-ending domestic coal reserves. In fact, reserve estimates and mining productivity are falling in the U.S. and UCS highlights the modern assessments of domestic coal reserves, which show that there is less economically recoverable coal than older data and older methods suggest.
With respect to prices, western coal reserves, for example, are somewhat buffered from spikes in the global coal markets. Nonetheless, between October 2009 and October 2010 the price of a one-month coal contract for western coal rose 67%. As the graph below demonstrates, the price of Appalachian coal is also increasing dramatically.
“A Risky Proposition” concludes by reminding readers that in the 1970s there was a massive over-investment in coal and nuclear plants without proper heed to the associated financial risks. This blind over-investment led to cancellation of 100 nuclear plants and 80 coal plants. But the money was already spent: hundreds of millions or even billions of dollars were wasted and electricity prices skyrocketed, municipal bonds defaulted and legal battles arose. “A Risky Proposition” reminds us that if we learn from history we are not doomed to repeat it. Utilities today have large coal fleets with many old plants that have not already undergone necessary upgrades. They now face a choice of investing huge sums of money to perpetuate the life of these dirty, out-dated facilities or finally retiring them and placing their money on much safer bets.
On October 12, 2021, the Southeast Energy Exchange Market (SEEM) proposed in Docket No. ER21-1111 "became effective by operation of law" because of the "absence of Commission action on or before October…