States Spend Billions Importing Coal

Economies in three dozen states are collectively hemorrhaging tens of billions of dollars annually on imported coal to generate electricity, according to a report released Tuesday by the Union of Concerned Scientists (UCS).

Residents in those states would be better served, the report concludes, if more money were spent in-state on local renewable energy technology and energy efficiency programs.

The first-of-its-kind report, which ranks the 38 states that are net importers of domestic and foreign coal based on the most recent available data, found that 11 of them each spent more than $1 billion annually on imported coal in 2008. 63% of domestic coal comes from just three states: Wyoming, West Virginia and Kentucky. Foreign coal burned in U.S. coal plants mainly comes from Colombia.

"Importing coal to produce electricity is a drain on state economies," said Jeff Deyette, the assistant director of energy research and analysis in UCS’s Climate & Energy Program and a report co-author. "Ratepayer dollars are diverted out of state instead of spent locally on renewable energy projects and energy efficiency measures that would benefit residents directly."

Using 2008 Department of Energy figures, "Burning Coal, Burning Cash: Ranking the States that Import the Most Coal" ranks state dependence on coal imports in six categories: (1) total spending on net imported coal, (2) spending on net imported coal per state resident, (3) spending on international coal imports, (4) the amount of net coal imports by weight, (5) spending relative to the size of the state economy, and (6) reliance on net imports relative to total power use.

Twenty-five states appear in at least one of the top 10 rankings, but states in the Southeast and Midwest dominate. Several Northeastern states made the rankings because their power producers rely heavily on foreign coal imports.

TOTAL SPENDING ON NET COAL IMPORTS 

Ten most dependent states (in descending order): Georgia, North Carolina, Texas, Florida, Ohio, Alabama, Michigan, Tennessee, Indiana and Missouri.

Georgia ratepayers paid $2.6 billion on net coal imports in 2008. Ratepayers in each of the other states spent more than $1 billion that year.

Spending on coal imports for many of the states on this list rose steeply between 2002 and 2008, due to the rising cost of coal and shipping, but also because many of the states imported more coal.

SPENDING PER STATE RESIDENT

Ten most dependent states: Alabama, Georgia, North Carolina, South Carolina, Tennessee, Missouri, Kansas, Delaware, Indiana and Iowa.

These states spent between $166 and $297 per resident on imported coal in 2008.

By contrast, only 22 to 75 cents was spent per resident in six states (Alabama, Georgia, North Carolina, Missouri, Delaware and Indiana) on ratepayer-funded electric efficiency programs in 2007, the most recent year for which data is available. Among the remaining four, only in Iowa was more spent on efficiency than the national average of $7.36 per resident.

SPENDING ON FOREIGN COAL IMPORTS

Ten most dependent states: Alabama, Florida, Massachusetts, Mississippi, Georgia, Virginia, New Jersey, New Hampshire, Connecticut and New York.

More than 80% of the foreign coal imports in 2008 came from Colombia. The balance came from Venezuela and Indonesia.

Foreign imports more than tripled between 1999 and 2008, but they still accounted for a relatively small share of U.S. coal use. The United States still exports more coal than it imports.

Reducing coal imports by developing local renewable energy sources and instituting energy efficiency programs at the local, state and federal level would benefit ratepayers and boost state economies. A number of studies by UCS and others have shown that ramping up renewable energy development and implementing efficiency measures creates local jobs, lowers utility bills, boosts local tax revenues, and generates additional income for farmers and rural landowners. Some states, including Illinois, Iowa and Massachusetts, already are reaping the benefits of forward-looking state clean energy policies, but other states, including many featured in the UCS coal dependence report, are lagging far behind.

"When it comes to spurring local efficiency and renewable energy development, many of the biggest coal importers have the most room for improvement," said Barbara Freese, a senior policy analyst in UCS’s Climate & Energy Program and a report co-author. "The regions most dependent on imports–the Midwest and Southeast–have some of the best wind and bioenergy resources in the country. And Southern states in particular have great untapped potential to cut electricity use with efficiency programs. That would mean lower electric bills and more dollars circulating in the local economy."

Besides the economic benefits of curbing U.S. coal dependence, there are obvious public health and environmental benefits, Freese said. A recent National Academy of Sciences report, for example, found that in 2005 alone, U.S. coal plants caused $62 billion in health costs and other damages, mainly from premature deaths due to exposure to air pollutants. That calculation did not include damage from mining, mercury pollution or global warming pollution. Coal power plants are the leading source of U.S. carbon dioxide emissions, the primary global warming pollutant.

"Federal action is critical to reducing the threat of global warming, and it would have the added benefit of helping states cut their coal imports," said Deyette. "Congress needs to enact comprehensive climate and energy legislation that caps carbon pollution, requires new renewable energy development, and increases energy efficiency."

The full report is available at the link below.