U.S. Energy Secretary Rick Perry said Thursday that coal-fired power plants are important for the country's future, and he suggested that energy supply will spark demand.
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After touring a coal-fired power plant, Perry was asked about the economics of coal when natural gas is far cheaper. West Virginia currently has a boom in gas production but needs more shipping capacity. Several pipeline projects are under way.
"Here's a little economics lesson, supply and demand: You put the supply out there and the demand will follow that," Perry said. "The market will decide which of these they're going to pick and choose."
That's not typically how economists would describe the way supply and demand works. In general, higher demand for any good or service — such as coal — drives the supply. That's because more customer demand typically drives up the price, which then encourages businesses to provide more of the good or service to make more money. The rise in supply then acts to bring down the price.
After touring one of the few recently built coal-fired power plants in the U.S., Perry said the plant's technology provides "the ability to deliver a secure, economical and environmentally good source of energy." He said the nation needs a stable baseload of electricity.
The Longview Power 700-megawatt plant in northern West Virginia first produced electricity in 2011. It reports higher efficiency burning coal and lower emissions than other U.S. coal-fired plants, with about 70 percent less nitrogen oxide, 78 percent less sulfur dioxide and at least 90 percent fewer particulates.
It reports carbon dioxide emissions 20 percent lower because it burns 20 percent less coal.
Coal belongs in a diverse U.S. energy portfolio that includes renewable solar, wind and hydro power, he said.
President Donald Trump "intuitively understood" that coal can be used in an economically powerful and responsible way that makes America more secure, Perry said. "If you lose your electrical power, you have chaos," he said.
"Having a diverse portfolio of all the energy sources, including renewables, is important to this country," he said. "Picking and choosing a few that fit your political agenda is not good for America."
The Longview Power project cost about $2 billion, according to company officials. It gets coal directly from an affiliated Mepco LLC mine in southern Pennsylvania along a 4.5-mile conveyor belt. It emerged from Chapter 11 reorganization in 2015 and is owned by private investors. It operates at full capacity almost constantly.
It claims efficiencies from that low-cost fuel source, an advanced boiler, pollution controls in its initial design instead of a retrofit, and other advanced techniques and equipment. Other countries, including China and Japan, have built new similar coal-fired power plants, Longview CEO Jeffrey Keffer said.
West Virginia's U.S. Sens. Shelley Moore Capito and Joe Manchin and Rep. David McKinley joined Perry on the tour.
Keffer said natural gas-burning power plants are being built, and once those start consuming that price is going to go back up.
Capito said there are other uses for natural gas, including jet fuel, chemicals and fertilizer. "We don't want to, I don't think, put all our eggs into the natural gas basket for power production," she said.
Manchin said reliable uninterruptible power is needed, citing the coal piled outside Longview. He said gas flow can be interrupted by cyber attacks or pipeline sabotage. "The country has to decide: How much uninterruptible power do you want to energize the grid?"
AP Economics Writer Christopher S. Rugaber in Washington, D.C., contributed to this story.