In just a matter of weeks, momentum has swung decisively in favor of preserving the coal fleet. First, Federal Energy Regulatory Commission (FERC) Chairman, Mark Christie, put out a statement saying the nation must “stop the premature retirement of dispatchable generation.” He was followed by the Secretary of Energy, Chris Wright, who said the U.S. should stop the closure of coal plants, adding, reduced coal generation “has made electricity more expensive and our grid less stable.”

Now, the Industrial Energy Consumers of America (IECA) – representing manufacturers with over 12,000 facilities nationwide and more than 1.9 million employees – are urging utilities “to not prematurely shut down coal-fired electric generating units.”

In a letter to the House Committee on Transportation and Infrastructure, following a similar letter to FERC, IECA explained, “the manufacturing sector’s economic growth has never before faced such a growing crisis as we are faced with today, due to inadequate natural gas pipeline capacity.”

IECA pointed to the nation’s last cold snap as evidence of the challenge facing many of its members. “The recent protracted cold weather has once again shown the fragility of our nation’s natural gas system as 44 pipelines across the country have issued either operational flow orders (OFOs) or curtailment notices to manufacturing companies to reduce demand,” IECA wrote. “When there is inadequate pipeline capacity, manufacturing companies are always the first to be curtailed,” they added.
 
But it’s not just cold weather constraining gas supply. “Pipeline warnings/notices to reduce or curtail supply are now in both winter and summer, more frequent and severe due to higher demand for electricity generation and LNG exports,” IECA wrote. Soaring electricity demand from manufacturing, crypto currency and the electrification of the economy is also “intensifying the problem.”

Gas Demand is Soaring Past Pipeline Availability

IECA points out that despite soaring gas demand and the pressing need for more pipelines, the U.S. added record low interstate natural gas pipeline capacity in 2022 and 2023.
 
With power demand skyrocketing, new LNG export capacity coming online and gas demand potentially going to get another boost from off-grid power projects, the speed of accumulating new gas demand is only further outpacing the ability to expand pipeline capacity and reduce congestion.
 
The competitiveness of the nation’s manufacturing sector now hangs in the balance. For manufacturers on the East Coast, the lack of pipeline capacity is already a crisis. As IECA explains, there is no availability of firm pipeline capacity – in other words, guaranteed supply – that would allow manufacturers to expand operations or invest in new ones. U.S. economic potential is now handcuffed by the unavailability of pipeline capacity.
 
IECA has chosen its ask carefully. While more renewable generation can help alleviate gas demand during ideal weather conditions, during periods of peak demand that often come with uncooperative weather, renewable generation is too often a no-show. Rapidly expanding the nation’s pipeline capacity is essential but despite the urgent need, it hasn’t happened yet and the hurdles to making it happen remain toweringly high. Manufacturers have zeroed in on the need for dispatchable fuel diversity and it’s the existing coal fleet that underpins it.  
 
Further coal plant losses – and that includes conversion of coal plants to gas generating units – will only exacerbate an already crippling problem. There is shared recognition from grid operators, regulators, the nation’s manufacturing sector and the Secretary of Energy that we must stop closing coal plants. It’s now time for action.