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Executive Summary

The outlook for coal use in the United States is governed by two major factors, namely, the desirability of using an abundant, low-cost, and secure domestic energy resource and the need to comply with increasingly stringent environmental control requirements. Over the time periods considered in this study (ranging from the present through 2040), the production cost of domestic coal is not expected to increase significantly. In contrast, rises in the cost of domestic natural gas are anticipated because of resource limitations. There are also likely to be significant increases in the price of imported petroleum (EIA, 1994). While continued growth in the use of renewable energy forms is expected, along with a potential resurgence in nuclear power, there will be a powerful economic driving force for major and expanded use of coal over the next several decades, with concomitant pressures to reduce environmental impacts through improved technologies. In addition, in countries of South Asia and the Pacific Rim, notably China, rapid economic growth coupled with substantial indigenous coal supplies will likely contribute significantly to an expected worldwide growth in coal utilization over the next 15 years or more (DOE, 1993a).

In this context the Energy Policy Act of 1992 (EPACT) directs the U.S. Department of Energy (DOE) to establish programs for developing environmentally acceptable coal-based technologies for a broad range of applications, notably electric power generation and the manufacture of liquid and gaseous fuels and nonfuel products, such as carbons and coal-derived chemicals. A number of the coal-related provisions of EPACT emphasize the need to ensure the availability of technologies for commercial use by 2010, reflecting both anticipated requirements for coal-based power generation and a desire to capitalize on earlier federal research and development (R