Causes and Consequences of the Coal Market Decline
Loading...
Date
2020-09-24
Authors
Dlouhy, Curtis
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon
Abstract
Fossil fuel markets have formed the backbone of commerce in the United States for the better part of the last century. Whether it be through the extraction of raw materials, the refinement for future use, their use in the transportation industry, or burning them for heat or electricity, fossil fuels have become a necessary resource in the post-industrial economy. While fossil fuels are indeed essential in many sectors, their roles have shifted due to changes in technology, public opinion and public policy.
An unfortunate byproduct of using fossil fuel use is a host of harmful pollutants in the form of sulfur, nitrogen oxides, and carbon. Due to their dirty nature, policy makers have tried to disincentivize fossil fuels or reduce their emissions. Starting in the 1970s, the United States began to reward reductions in fossil fuel use and the use of emissions-reduction technology through the Clean Air Act, its many amendments, and many other regional environmental policies. While the US is still very dependent on fossil fuels nearly 50 years after the institution of these original policies, the composition of fossil fuels used, and industries servicing users of fossil fuels have changed dramatically.
In this dissertation, I discuss my research investigating how the changing roles of fossil fuel have affected coal mining markets, electricity generation, and rail transportation. In my first chapter, I develop a model of sunk cost hysteresis in the coal mining industry to discuss how the rise of natural gas and environmental regulations have affected coal mining operations. In chapter two, I discuss how a carbon tax shifts the dispatch order of fossil fuel electricity generators and the effect that this redispatching has on seasonal fossil fuel use. In chapter three, I discuss how the decline in coal mining and the diminished preference for coal-powered electricity affects rail rates and rail revenues from transporting coal.
Description
Keywords
Economics, Energy, Industrial, Organization