Texas has long been a leader in the energy industry; its abundance of fossil fuels and renewable sources generate electricity for the state and make substantial contributions to the Texas economy. Texas’ energy use is tied to its large population, hot climate and extensive industrial sector, and the state depends on reliable and affordable energy. One important source of energy for the state is coal.
Background
Coal is one of the world’s most widely used fuels, setting a record high of 8.3 billion tonnes of consumption in 2022. It is a type of readily combustible rock found underneath the earth’s surface and is composed mostly of carbonized plant matter. Coal is sorted into four different categories in descending order of hardness: anthracite, bituminous, subbituminous and lignite.
Anthracite is the hardest and rarest coal – found in the U.S. only in northeastern Pennsylvania – and is used mostly for home heating. Bituminous and subbituminous coals, the most abundant types in the U.S., contain a thick tar-like material used in steelmaking and road building. Additionally, bituminous coal is often used in the U.S. to generate electricity. Lignite, the lowest quality coal, is used almost entirely for electricity generation.
According to the World Coal Association, in 2019, 37 percent of the world’s electricity was produced using coal. In the U.S., coal was the second-largest energy source for electricity generation (behind natural gas) in 2021 at 22 percent. Most coal-fired electricity producers utilize steam turbines for electricity generation, although some use gas turbines.
According to the 2023 U.S. Energy and Employment Report, in 2022, Texas had almost 7,000 coal-related jobs, including coal-fuel and coal-power generation occupations. While many energy industries in Texas experience an annual increase in employment, coal industry employment has decreased. Coal-related jobs in Texas fell by nearly 500 positions from 2021 to 2022.
Coal for Texas Energy
The Electric Reliability Council of Texas (ERCOT) oversees the state’s electricity grid, which provides power to more than 26 million Texas customers, representing about 90 percent of the state. In 2023, coal provides nearly 11 percent of ERCOT’s electric-generating capacity.
The U.S. Energy Information Administration (EIA) lists 15 Texas coal-fired power plants in its U.S. Energy Atlas as of September 2022. Combined, these plants have an installed capacity of nearly 20,000 megawatts (MW) of electricity (Exhibit 1).
According to the Texas Mining and Reclamation Association (TMRA), the primary type of coal mined in Texas is lignite, which is extracted through surface mining, a process that scrapes off the soil and rock layers to expose the coal underneath. As of 2021, while all Texas coal mines produced lignite, none produced bituminous coal.
Texas is the second-largest lignite producer in the United States, after North Dakota, and the seventh-largest coal producer overall.
Coal mining in Texas is regulated by the Texas Railroad Commission (RRC), which grants permits for the state’s surface mining operations. Although the RRC has issued 26 permits for coal mining in Texas, as of 2023. it lists only eight active mines (Exhibit 2).
Exhibit 2 2023 Lignite Mines in Texas
Mine
County/Counties
Owner
Bremond Mine
Robertson
Luminant
Calvert Mine
Robertson
Walnut Creek Mining Company
Darco Mine
Harrison
Norit Americas
Kosse Mine
Limestone and Robertson
Luminant
Oak Hill Mine
Rusk
Luminant
San Miguel Area C Mine
Atascosa
SMEC
Sandow Mine
Lee, Milam, Williamson
ALCOA
Three Oaks Mine
Robertson
Luminant
Source: Texas Railroad Commission
According to Chmura, a labor and economic market research consulting and software firm, occupations in coal mining and support activities for coal mining had an average annual wage of $109,179 in 2022.
Additionally, in 2021, coal mining and coal mining support activities contributed approximately $659.5 million to Texas’ gross domestic product. TMRA notes that although coal employment nationwide has declined 42 percent from 2011 to 2018, mining jobs located in rural parts of the state provide economic opportunity to communities in need.
Current Issues
Coal is an abundant fuel source, however, the use of coal as a power source for electricity generation has declined. In Texas in 2021, coal generated 88.8 million MWh (megawatt hours) of energy generation, nearly 50 million less than the 138 million MWh produced a decade prior in 2012. Since 2019, coal has not produced more than 100 million MWh (Exhibit 3).
Exhibit 3 Annual Texas Coal Generation (MW Hours in millions)
Source: U.S. Energy Information Administration
Coal as an energy-generating fuel source is becoming an increasingly less economical choice as costs associated with compliance with federal environmental regulations like the Clean Air Act grow. Six of the state’s coal-burning power plants totaling 6,400 MW were shuttered between 2018 and 2020, and several others are slated to be retired or converted to natural gas over the next five years.
Xcel Energy announced plans to retire its 1,067-MW coal-fired Tolk power plant in northwest Texas in 2028.
In January 2023, CPS Energy announced plans to retire the last two coal-burning units at the J.K. Spruce power plant in San Antonio by 2030. The plan calls for the 560-MW Unit 1 to be retired in 2027 and the 785-MW Unit 2 to be converted to natural gas beginning in 2028.
The Coleto Creek Power Plant in Fannin is scheduled to close in 2027 due in part to costs associated with federal regulations on the disposal of coal ash and limits on the levels of toxic metals allowed to be discharged from power plants.
The Pirkey Power Plant in Hallsville will close in 2023; the facility cited the costs of maintenance and of compliance with environmental regulations as contributing factors.
A 2019 report by the Environmental Integrity Project found that every coal plant in Texas (16 at the time of the study) is leaking contaminants, including arsenic, boron, cobalt and lithium, into groundwater at levels that have been determined to be unsafe for human consumption. The groundwater near 13 of the 16 plants had arsenic levels that were 10 times higher than the Environmental Protection Agency’s maximum contaminant level.
Outlook
Nearly one-third of Texas’s coal-fired power plants currently in operation are scheduled to be retired by the end of the decade. The Sandy Creek Energy Station in McLennan county, which came online in 2013, was the last large (greater than 100 MW) coal-fired power plant built in the U.S., and no plans have been announced for new coal-fired plants to be built in the future.
Texas’ economy depends on affordable, reliable and environmentally sound sources that fuel electricity. Our role as a leader in the energy economy hinges on our ability to effectively manage and maintain the state’s diverse energy profile.
Endnotes
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