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The Effects of Fuel Prices, Environmental Regulations, and Other Factors on U.S. Coal Production, 2008-2016

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Abstract:
We decompose the decline in coal production from 2008 to 2016 into the contributions of several sources. In particular, we estimate the effects of declining natural gas prices and the introduction of new environmental regulations along with several other factors, using both monthly state-level data and annual information on coal plant closings. We estimate that the declining price of natural gas relative to coal is responsible for 92 percent of the total decline in coal production over this period and that environmental regulations account for an additional six percent, with other factors making small and offsetting contributions.

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Keywords: Energy transition, Electricity, Environmental regulation

DOI: 10.5547/01956574.41.1.jcog


Published in Volume 41, Number 1 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.