West Virginia Governor Earl Ray Tomblin approved the repeal of the Alternative and Renewable Energy Portfolio Standard (AREPS) on February 3, 2015. The repeal reaffirmed West Virginia’s desire to maintain its status as a coal-powered economy, despite several underlying trends that make a gradual phase-out of coal in the United States ever more likely.  

AREPS was commonly considered a Renewable Portfolio Standard (RPS). Yet most state RPS seek to reduce greenhouse gas (GHG) emissions by spurring investment in renewable energy and energy efficiency technologies. AREPS, on the other hand, did not have any requirements for renewable energy or energy efficiency in its language. AREPS required investor-owned utilities (IOUs) with 30,000 or more customers to supply 25 percent of their energy using alternative or renewable energy by 2025, but the standard stipulated that any combination of eligible energy technologies could fulfill this goal. Eligible technologies included advanced coal technology, coalbed methane, natural gas, fuel from coal gasification or liquefaction, synthetic gas, integrated gasification combined-cycle technologies, waste coal, and tire-derived fuel. The only requirement was that natural gas could only make up 10 percent of the overall standard.

AREPS's two goals were to improve “energy independence and to meet environmental concerns.” The law’s effectiveness in achieving these goals is far from clear-cut. West Virginia is clearly energy independent when it comes to generating electricity: coal-fired power plants account for 95 percent of its net electricity, and West Virginia exports roughly 80 percent of the coal it produces and generates more electricity than it consumes. But this self-reliance predates AREPS, so, at most, the law simply maintained the status quo. As for the law’s success in addressing environmental concerns, its record is similarly mixed at best. Carbon dioxide (CO2) emissions in West Virginia have declined since the bill was enacted in 2009. In 2008, the EIA estimated West Virginia released 110.9 million metric tons of CO2 (mmt CO2) into the atmosphere. That number decreased to 88.8 mmt CO2 in 2009, and rebounded to 96.0 mmt CO2 in 2011. But, the reduction has more to do with the recession that hit the U.S. economy in late 2008, causing steep falls in energy demand and GHG emissions nationwide, than with AREPS.

AREPS did little, if anything, to promote renewable energy and energy efficiency in West Virginia, so perhaps its repeal shouldn't be regretted. Nevertheless, it was a good first attempt at using an established policy strategy to mitigate global climate change and encourage new markets in West Virginia. It was also a critical first attempt at shifting West Virginia away from coal.

West Virginia has a strong and celebrated culture around coal mining. The industry employs thousands of proud and highly-trained workers. However, the coal industry in West Virginia has been in general decline for the last three decades; since 1983, the state's coal industry has lost about 17,000 jobs. The Washington Post and National Journal both attribute the decline to competition from cheap, low-sulfur coal from the western United States and from the increased automation of coal mining. The pressure on coal mining in West Virginia is likely to rise as the state runs out of easily accessible mines, the nation transitions to cheaper natural gas power generation, and the Environmental Protection Agency (EPA) introduces new regulations on carbon emissions, mercury, and air toxics from power plants. The U.S. Energy Information Administration projects domestic power sector coal use will decline by 1.5 percent in 2015 and 0.6 percent in 2016, principally due to competition from cheaper natural gas and EPA regulations.

These underlying trends leave West Virginia, with its heavy reliance on coal for electricity generation and with more than 24,000 coal-dependent jobs, in a precarious position. The state will need to diversify its energy portfolio and, fortunately, it has many options to do so. West Virginia has access to a sizeable chunk of the Marcellus shale formation, as well as plentiful solar and wind resources.

Author: Samuel Beirne