1. University of Pittsburgh School of Law 2013 Energy Law & Policy Institute David Spence August 1, 2013

2. Gas Displacing Coal in Electric Mix Market Effects Shale gas boom Future: relative prices Regulation: “war on coal” Climate rules Other rules Survival of Rules Power plant NSPS existing plants rule? NAAQS revisions CSAPR

3. Gas Displacing Coal in Electric Mix Market Effects Shale gas boom Future: relative prices

4. First horizontal wells fracked in the Barnett Shale 56% 9% 37% 30% 5% a Data source, US EIA 2005: Nat. Gas Wellhead Price = $7.33/mcf 2012: Nat. Gas Wellhead Price = $2.66/mcf Arab Oil Embargo: reduced use of oil and gas for electricity generation Wider use of mountaintop removal reduces costs of coal mining Share of Electricity Production for Coal, Natural Gas, and Non-Hydro Renewables, 1949-2012 New generation of EPA rules developed

5. Coal and Gas Prices, 2004-12

6. Gas Displacing Coal in Electric Mix Market Effects Shale gas boom Future: relative prices Gas futures vs. coal futures Natural gas exports? Technological change – CCS? UCG?

7. Gas Displacing Coal in Electric Mix Market Effects Shale gas boom Future: relative prices Regulation: “war on coal” Climate rules Other rules EPA’s “War on Coal”? GHGs NSPS for new power plants GHG regulation for existing plants? CSAPRMATSNAAQS revisions (NOx, PM) Once-through cooling ruleCoal ash rule

8. Recent Yale polling on climate change – conflicting signals

9. SOURCE: Muller, Mendelsohn, and Nordhaus, AER, 2011

11. FIGURE SOURCE: Skeptical Science “Epstein” refers to Epstein et al., Full Cost Accounting for the Life Cycle of Coal, Annals of the NY Acad. of Science, 2011. More than any other electric generation fuel, coal does not pay its way.

12. Gas Displacing Coal in Electric Mix Market Effects Shale gas boom Future: relative prices Regulation: “war on coal” Climate rules Other rules Survival of Rules Power plant NSPS existing plants rule? NAAQS revisions CSAPR

13. Thank you