Billions of Dollars Leaving State Economies Annually to Import Coal, Report Finds

Economies in three dozen states are collectively hemorrhaging tens
of billions of dollars annually on imported coal to generate
electricity, according to a report released today by the Union of
Concerned Scientists (UCS). Residents in those states would be better
served, the report concludes, if more money were spent in-state on
local renewable energy technology and energy efficiency programs.

The first-of-its-kind report, which ranks the 38 states that are net
importers of domestic and foreign coal based on the most recent
available data, found that 11 of them each spent more than $1 billion
annually on imported coal in 2008. Sixty-three percent of domestic coal
comes from just three states: Wyoming, West Virginia and Kentucky.
Foreign coal burned in U.S. coal plants mainly comes from Colombia.

"Importing coal to produce electricity is a drain on state
economies," said Jeff Deyette, the assistant director of energy
research and analysis in UCS's Climate & Energy Program and a
report co-author. "Ratepayer dollars are diverted out of state instead
of spent locally on renewable energy projects and energy efficiency
measures that would benefit residents directly."

Using 2008 Department of Energy figures, "Burning Coal, Burning Cash: Ranking the States that Import the Most Coal"
ranks state dependence on coal imports in six categories: (1) total
spending on net imported coal, (2) spending on net imported coal per
state resident, (3) spending on international coal imports, (4) the
amount of net coal imports by weight, (5) spending relative to the size
of the state economy, and (6) reliance on net imports relative to total
power use. Twenty-five states appear in at least one of the top 10
rankings, but states in the Southeast and Midwest dominate. Several
Northeastern states made the rankings because their power producers
rely heavily on foreign coal imports.

TOTAL SPENDING ON NET COAL IMPORTS

• Ten most dependent states (in descending order): Georgia, North
  Carolina, Texas, Florida, Ohio, Alabama, Michigan, Tennessee, Indiana
  and Missouri.
• Georgia ratepayers paid $2.6 billion on net coal imports in 2008.
  Ratepayers in each of the other states spent more than $1 billion that
  year.
• Spending on coal imports for many of the states on this list rose
  steeply between 2002 and 2008, due to the rising cost of coal and
  shipping, but also because many of the states imported more coal.

SPENDING PER STATE RESIDENT

• Ten most dependent states: Alabama, Georgia, North Carolina, South
  Carolina, Tennessee, Missouri, Kansas, Delaware, Indiana and Iowa.
• These states spent between $166 and $297 per resident on imported coal in 2008.
• By contrast, only 22 to 75 cents was spent per resident in six
  states (Alabama, Georgia, North Carolina, Missouri, Delaware and
  Indiana) on ratepayer-funded electric efficiency programs in 2007, the
  most recent year for which data is available. Among the remaining four,
  only in Iowa was more spent on efficiency than the national average of
  $7.36 per resident.

SPENDING ON FOREIGN COAL IMPORTS

• Ten most dependent states: Alabama, Florida, Massachusetts,
  Mississippi, Georgia, Virginia, New Jersey, New Hampshire, Connecticut
  and New York.
• More than 80 percent of the foreign coal imports in 2008 came from Colombia. The balance came from Venezuela and Indonesia.
• Foreign imports more than tripled between 1999 and 2008, but they
  still accounted for a relatively small share of U.S. coal use. The
  United States still exports more coal than it imports.

Reducing coal imports by developing local renewable energy sources
and instituting energy efficiency programs at the local, state and
federal level would benefit ratepayers and boost state economies. A
number of studies by UCS and others
have shown that ramping up renewable energy development and
implementing efficiency measures creates local jobs, lowers utility
bills, boosts local tax revenues, and generates additional income for
farmers and rural landowners. Some states, including Illinois, Iowa and
Massachusetts, already are reaping the benefits of forward-looking
state clean energy policies, but other states, including many featured
in the UCS coal dependence report, are lagging far behind.

"When it comes to spurring local efficiency and renewable energy
development, many of the biggest coal importers have the most room for
improvement," said Barbara Freese, a senior policy analyst in UCS's
Climate & Energy Program and a report co-author. "The regions most
dependent on imports -- the Midwest and Southeast -- have some of the
best wind and bioenergy resources in the country. And Southern states
in particular have great untapped potential to cut electricity use with
efficiency programs. That would mean lower electric bills and more
dollars circulating in the local economy."

Besides the economic benefits of curbing U.S. coal dependence, there
are obvious public health and environmental benefits, Freese said. A
recent National Academy of Sciences report,
for example, found that in 2005 alone, U.S. coal plants caused $62
billion in health costs and other damages, mainly from premature deaths
due to exposure to air pollutants. That calculation did not include
damage from mining, mercury pollution or global warming pollution. Coal
power plants are the leading source of U.S. carbon dioxide emissions,
the primary global warming pollutant.

"Federal action is critical to reducing the threat of global
warming, and it would have the added benefit of helping states cut
their coal imports," said Deyette. "Congress needs to enact
comprehensive climate and energy legislation that caps carbon
pollution, requires new renewable energy development, and increases
energy efficiency."