Beruflich Dokumente
Kultur Dokumente
Table of Contents
Introduction 3
Conclusion 15
Bibliography 17
Appendix A 18
Appendix B 19
Glossary 20
3
Introduction
production. One road leads to the continued reliance on coal, resulting in energy that is cheap but
harmful. Another road leads to clean energy, resulting in energy that is safe and sustainable but
comes with a daunting price tag. As Indiana increases in population and energy demand, the state
must rethink its energy production. Although coal is efficient, a reliance on coal can lead to
irreversible air and water pollution. While clean energy would reduce worry regarding the
environment’s future, it is impossible under the current rates of energy production and demand
statewide to immediately switch to solely renewable energy. In order to decide how Indiana
should produce energy, it is essential to understand the causes of Indiana’s current energy
production. How do political and environmental factors influence Indiana’s energy production?
Indiana’s political and environmental landscape not only encourages the production of
nonrenewable energy but also actively discourages the production of renewable energy.
Indiana’s fossil fuels formed long before they were mined. The state used to be covered
with lakes and marshes. Ancient plants and animals living in the lakes and marshes fossilized.
Through heat and pressure over millennia, the fossils formed coal, petroleum, and natural gas.1
Coal, petroleum, and natural gas are called fossil fuels. Although fossil fuels have been present
for most of human history, they are nonrenewable resources, meaning the rates they are
consumed are faster than the rates they are replenished. While coal continues to form, the rate of
formation is much slower than the rate at which coal is burned for energy; eventually there will
1
“Indiana - State Energy Profile Analysis.” U.S. Energy Information Administration, U.S. Department of Energy,
20 Apr. 2017, www.eia.gov/state/analysis.php?sid=IN.
4
Coal was discovered in Indiana along the Wabash River in 1736. The coal industry was
developed in the 1830s, with over 30 million tons produced annually by 1918. Coal mining
decreased following World War I due to lower demand during peacetime as well as the advent of
safer occupations. Most excavation during and following World War I was deep mining.2 While
deep mining was cheaper than surface mining, it was also dangerous for miners underground.
The miners could be trapped inside the mines and often had breathing problems persisting after
they retired. The coal industry rebounded during World War II as demand increased for military
efforts and continued to develop afterwards with the advent of cheaper excavation equipment for
surface mining. Surface mining increased dramatically; it was used to mine over 80% of
Indiana’s coal production by 1965.3 Surface mining still accounts for 70% of Indiana’s coal
production. While surface mining continues to be cheaper, mined sites are more difficult and
expensive to reclaim. While deep mines can be sealed, the reclamation (See Glossary) of surface
mines requires organized development and is often unsuccessful even with the utmost care.
Coal mining continues to thrive today. There are 17 billion tons in coal reserves left in
Indiana. Only 12% of the coal in these reserves (See Glossary) can be recovered through surface
mining, leaving the other 88% to be recovered through deep mining.4 While all 17 billion tons of
coal can be mined using current technology, it is likely that if Indiana continues to rely primarily
on coal for energy, engineers will improve technology to make deep mining cheaper to
incentivize a switch from surface to deep mining. Even if the coal industry must make changes in
order to mine more efficiently, the coal industry will not be running out of coal any time soon.
According to the Indiana Geological and Water Survey, “Based on current production rates,
2
“Coal in Indiana.” Indiana Geological and Water Survey, Indiana University Bloomington, igws.indiana.edu/coal/.
3
Ibid.
4
Ibid.
5
Indiana's 17 billion tons of available coal could last more than 500 years.”5 Using the current
rates of coal production, Indiana can use the 17 billion tons of coal that are available now to
energize the state for hundreds of years. If Indiana continues to rely on coal, it is likely that
improved technology will increase the amount of mineable reserves, extending the coal
industry’s possible future. Although coal is a nonrenewable resource, the effects of its finiteness
will not manifest in this century or in the next few. Although Indiana does not need to worry
about whether or not coal will run out, the mining and burning of coal for energy causes damage
to the environment which can be irreversible. It is not the availability of coal but the effects of
mining and burning that are the problems. Another problem is Indiana’s dependence on coal for
electricity. According to Matthew B. Dillon and Timothy F. Slaper from the Indiana Business
Research Center, “In 2014, coal-fired power plants provided about 85 percent of Indiana’s
electricity generation.”6 Indiana uses coal for generating 85% of its electricity. The percentage
not only reveals Indiana’s dependency on coal but also reveals that an immediate conversion to
renewable energy is not feasible. Indiana cannot change to solely using less than 15% of its
energy overnight. Any changes made to decrease the burning coal of must be balanced with an
utilities keep electricity prices low in order to attract businesses. As a result of inflation and
implementation of cleaner energy, electricity prices rose between 2005 and 2015 from
5
“Coal in Indiana.”
6
Dillon, Matthew B., and Timothy F. Slaper. “The Long View: Indiana’s Energy Outlook.” Indiana Business
Review, Indiana Business Research Center, 2015, www.ibrc.indiana.edu/ibr/2015/outlook/longview.html.
6
approximately “6.99 to 8.97 cents per kilowatt hour.”7 Indiana’s electricity prices rose 28.3%.
Even with the rise in electricity prices, “Indiana still ranks 36th in the nation for energy prices,
with the current United States average at 10.45 cents per kwh for all sectors.”8 Despite the
increase in electricity prices, Indiana’s electricity is still cheap compared to the rest of the United
States; Indiana’s average price per kilowatt hour (See Glossary) is 1.48 cents less than the
national average. The cheaper-than-average prices for electricity are maintained by Indiana’s
reliance on coal; the implementation of natural gas, renewable sources, or both would increase
electricity prices because costs for converting power plants from coal to natural gas and upfront
costs for renewable energy systems are expensive and must be factored into electricity prices for
utilities to make a profit. Indiana’s reliance on coal is also advantageous in that the prices to
deliver coal to power plants have been stable for several years. As illustrated by “Cost of
Delivery, Coal vs. Natural Gas” (See Appendix A), the price of coal delivery has remained stable
just above $2 per million BTU (See Glossary), while the price of delivery for natural gas has
fluctuated, the lowest price still over $3 per million BTU. Although natural gas delivery prices
are projected to increase, the rate of increase will decrease and eventually prices will stabilize.9
While recent drops in natural gas prices have made the source more attractive, Indiana’s
continuously low costs for coal have resulted in a statewide dependency on coal.
Indiana’s politics also discourage measures to regulate carbon emissions. The lack of
willingness of Indiana’s government to hold utilities accountable for their carbon emissions is
most evident in their refusal to follow the national Clean Power Plan. The Clean Power Plan,
commonly abbreviated as CPP, was proposed in 2014 by the Environmental Protection Agency
in order to improve air quality. According to Nick Janzen, “The Clean Power Plan would reduce
7
Dillon & Slaper.
8
Ibid.
9
Ibid.
7
carbon emissions from power plants by 30 percent nationwide.”10 If enforced, the CPP would
require Indiana, a state who has been lax with carbon emission regulations, to change its policies.
“Under the CPP, Indiana power plants must reduce CO₂ emissions 38.5 percent from 2012 levels
by 2030.”11 Indiana would have to reduce their emissions 8.5% more than the national average to
follow the CPP. Indiana’s utilities could comply with the plan if they switched to natural gas,
Glossary) to make the burning of coal cleaner. Because the utilities would have to pay more to
implement a different fuel or a cleaner process, the burden would fall to the consumers through a
rise in electricity prices. When the CPP was first proposed, Indiana’s government was wary of
such economic change. Mike Pence, Indiana’s governor at the time, believed “that the CPP
[would] increase prices for consumers too much, reducing their discretionary spending, in
addition to putting the jobs of 28,000 Indiana energy workers in jeopardy.”12 Pence believed that
the rise in energy costs in tandem with a reduction of jobs would disturb Indiana’s economy.
Because the government works to help both the economy and the environment, the government
must balance the needs of the environment with the needs of the economy; Indiana’s political
ideology tends to place more emphasis on the economy. The emphasis manifested in Indiana’s
decision to join 27 other states in suing the Environmental Protection Agency over the Clean
Power Plan.13 The case regarding the plan was issued a stay of proceedings (See Glossary) by the
Supreme Court, during which the plan could not be enforced. The Clean Power Plan is now
making headlines as the Environmental Protection Agency, led by chief Scott Pruitt, is in the
10
Janzen, Nick. “EPA Moves To Repeal Clean Power Plan.” WFYI Public Media, PBS, 9 Oct. 2017,
www.wfyi.org/news/articles/epa-moves-to-repeal-clean-power-plan.
11
Dillon & Slaper.
12
Ibid.
13
Janzen.
8
process of trying to repeal the plan.14 If the repeal is successful, it may signal a new era in
national attitudes towards energy production. As the home state of Vice President Mike Pence
and one of the states suing the Clean Power Plan, Indiana may influence not only its own but
incentives towards the production of renewable energy. Renewable energy comes from sources
that are not depleted when used. While most renewable sources are not difficult to find, it is
often difficult to harness their energy in a way that is reliable, efficient, and capable of powering
the state. There have been a few attempts to produce renewable energy in Indiana. Many
customers of Indiana’s utilities have set up solar energy systems in order to take advantage of net
metering policies. With net metering, customers of Indiana’s utilities with solar energy systems
can sell their excess energy to the utilities and supplement their solar energy with energy from
the utilities when necessary.15 However, net metering is offered in almost every state, and,
Indiana’s government is currently working to end it.16 Wind energy production looks more
promising with the establishment of the Benton County and Meadow Lake Wind Farms in
northwest Indiana. Wind is now responsible for 5% of the energy generated in Indiana. While
5% is a large percent for renewable energy, 5% is not even close to the amount needed to power
the state.17 The largest renewable energy industry in Indiana is biofuel. According to the U.S.
Energy Information Administration, “Indiana is the fifth largest producer of ethanol and has the
14
Janzen.
15
“Indiana - State Energy Profile Analysis.”
16
Lydersen, Kari. “Indiana Energy Bill Would Eliminate Net Metering, Move to 'Buy-All, Sell-All' Solar Model.”
Midwest Energy News, RE-AMP, 24 Jan. 2017, midwestenergynews.com/2017/01/24/indiana-energy-bill-would-
eliminate-net-metering-move-to-buy-all-sell-all-solar-model/.
17
“Indiana - State Energy Profile Analysis.”
9
sixth largest production capacity for biodiesel in the nation.”18 Indiana has the sixth largest
capacity of producing biodiesel because of glaciers millions of years ago that made Indiana’s
topsoil very fertile. The fertile topsoil has made farmers able to grow corn and soybeans for food
as well as fuel. However, biofuel is traditionally used for transportation in place of gasoline, not
used for electricity in place of coal. Like fossil fuels, biofuel burns hydrocarbons, releasing
carbon dioxide into the air; although biofuel is a source of renewable energy, it is not a source of
clean energy.
Indiana’s legislature has set up voluntary programs to try to increase the production of
renewable energy. In 2011, Indiana set up a clean energy portfolio standard that would increase
the allowable profit of utilities if they produced 10% of their supply of electricity from clean
technologies. The U.S. Energy Information Administration states, “Eligible technologies include
wind, solar, coalbed methane, clean coal technology, nuclear energy, combined heat and power
systems, and natural gas that displaces electricity from coal.”19 Although utilities can choose
from a variety of options, no utility has decided to participate as of mid-2016, meaning that for
the utilities, the effort and costs associated with clean energy overwhelm the environmental
benefits as well as the incentive Indiana has offered. Indiana set up Energizing Indiana in 2010 to
increase energy efficiency for utilities. The program was ended in 2014 due to a lack of
funding.20 The voluntary programs Indiana has set up to incentivize renewable energy are half-
hearted; because the incentives are small, utilities do not use these programs and instead continue
to burn coal.
Not only has Indiana’s government sponsored lackluster programs for renewable energy,
but they also are attacking renewable energy by ending net metering. Because solar energy
18
“Indiana - State Energy Profile Analysis.”
19
Ibid.
20
Ibid.
10
systems are initially very expensive, net metering offers a strong incentive by reducing the time
solar energy systems take to pay for themselves through the selling of excess energy to utilities.
However, Senate Bill 309 will ban net metering in Indiana by 2027. According to Lydersen, the
bill, now signed into law, will “institute a mandatory ‘buy-all, sell-all’ provision to replace net
metering that … essentially prohibit[s] customers from using their own solar energy, forcing
them to sell all of their energy back to the grid at low rates, only to buy it back at higher rates.”21
The “buy-all, sell-all” provision makes customers with solar energy systems sell all of their
energy to utilities at wholesale rates and then buy all of their energy from utilities at retail rates.
Since solar energy was previously sold to utilities at the higher retail rates, the provision reduces
the incentive greatly by increasing the time solar energy systems take to pay for themselves. The
“buy-all, sell-all” provision is also inefficient because some energy escapes during the transfer.
The “mandatory” provision does not even allow utilities to choose to have net metering after
2027. While net metering is common across the nation, the “buy-all, sell-all” provision is an idea
independent development of renewable energy; the ban discourages the production of renewable
energy. Although Senate Bill 309 bans net metering by 2027, net metering could end before
2027. Lydersen states, “Under existing policy, net metering will cease to exist after the 1 percent
cap is reached.”22 People with net metering collectively cannot go over 1% of the utility’s peak
demand load. Once the cap is reached, utilities cannot offer net metering to new customers, and
once 2027 is reached, no one in Indiana can net meter; they can only use the “buy-all, sell-all”
model. Indiana residents who wish to install solar energy systems and need financial assistance
21
Lydersen.
22
Ibid.
11
will primarily have to rely on the federal government, who only will give them 30% tax credits
However, it is not just Indiana politics that discourage renewable energy; Indiana’s
renewable energy is often dependent on having proper weather conditions met. However,
Indiana’s weather is unstable. The amount of sunlight and the speed of wind vary each day.
There are possibilities to resolve issues related to the weather, each with drawbacks. Indiana
residents can use less energy during times of unreliable energy generation, but sporadically
requiring residents to use less energy is impractical. Indiana can build more power plants to
ensure production meets demand, but using more power plants is much less efficient than simply
continuing the use of fossil fuels that generate energy more reliably. Utilities producing
renewable energy can use fossil fuels as back-ups, but the rationale for creating a society
powered by only renewable energy is to eliminate the use of fossil fuels.24 The most promising
possibility is for engineers to use innovation to reduce reliability as an issue by allowing more
energy to be harnessed and stored. It is important to understand that innovation takes time, so
even if Indiana wants to switch to solely using renewable energy, it cannot reasonably and
not cost-efficient. Upfront costs are high, not only for individuals to install but also for factories
to create. Solar panels require many materials that must be mined like fossil fuels; however,
23
Lydersen.
24
“Advantages and Disadvantages of Renewable Energy.”
12
these materials are much more difficult to find in Indiana than coal and natural gas.25 Efforts to
mine for materials to create renewable energy systems can come with overwhelming costs. It is
also important to note that, like generators using fossil fuels, renewable energy systems have to
be maintained or even replaced, resulting in additional costs.26 In order to reach the ideal of
powering Indiana solely on renewable energy, utilities must be able to produce enough
process currently powered by fossil fuels. With daunting costs, Indiana utilities and residents
considering the use of renewable energy must look towards subsidies, which are decreasing on
the federal level and practically ending on the state level.27 Renewable energy is also not land-
efficient. If Indiana were to switch to renewable energy, it would require much more power
plants to produce the same amount of energy. The land where the power plants are placed can be
used for other purposes. For example, crops raised for biofuel take away from food production.
One method to reduce the use of land required for renewable energy is to place renewable energy
systems in the oceans, but the method is not useful for landlocked Indiana. Renewable sources
are not energy-efficient. Conversion rates (See Glossary) for renewable energy are substantially
Renewable energy does not currently have the capacity to power Indiana; more
renewable power plants are required to produce enough energy for Indiana. While Indiana builds
these plants, energy demand increases due to population growth and increasing dependency on
electricity. Renewable energy is also difficult to store. Energy must be stored in order to provide
year-round coverage; while storing coal is simple because coal only releases energy when
25
“Advantages and Disadvantages of Renewable Energy.”
26
Ibid.
27
Lydersen.
28
“Advantages and Disadvantages of Renewable Energy.”
13
burned, storing renewable energy is difficult because the amount of usable energy decreases due
to its natural conversion to heat energy.29 For similar reasons, renewable energy is difficult to
transport. Not only are there additional costs in constructing ways to transport renewable energy,
but also some usable energy is lost to entropy (See Glossary).30 Although renewable energy is
much cleaner than nonrenewable energy, using only renewable energy to power Indiana is
While renewable energy continues to develop, Indiana should take measures to make
energy realistically cleaner by switching coal-fired plants to natural gas. A fossil fuel found in
porous rock, natural gas is a good alternative energy because it is already apparent as a viable
energy source; natural gas generates 25% of the energy consumed in the United States and heats
60% of homes in Indiana. Natural gas currently generates 8% of Indiana’s electricity.31 Unlike
many sources of renewable energy, natural gas has already been established in Indiana as a
Natural gas is capable of powering Indiana while still being much cleaner than coal.
According to the Indiana Energy Association, “Natural gas is the cleanest fossil fuel, emitting
extremely low levels of pollutants blamed for ground level smog.”32 Although the use of natural
gas emits pollutants, natural gas emits much fewer of these pollutants, reducing the amount of
smog created from producing energy. Reducing the rate of accumulation of smog will reduce the
manner, natural gas is able to produce energy efficiently as indicated by its widespread use in
29
“Advantages and Disadvantages of Renewable Energy.”
30
Ibid.
31
“Natural Gas Basics.” Indiana Energy Association, Indiana Energy Association, www.indianaenergy.org/natural-
gas-basics.html.
32
Ibid.
14
heating homes. The Indiana Energy Association states, “Natural gas furnaces and water heaters
now can achieve efficiency levels as high as 98 percent.”33 Heaters using natural gas are able to
use nearly all of the energy generated. While the peak efficiencies (See Glossary) of most
renewable sources are currently below 50%, fossil fuels like natural gas maintain a high
efficiency rate in both the generation of heat and electricity.34 Because the rate of efficiency of
natural gas is close to coal’s rate of efficiency, an increased use of natural gas would not
destabilize Indiana’s energy production levels. Natural gas is also abundant in Indiana.
According to the Indiana Energy Association, “...domestic natural gas supplies are expected to
be sufficiently robust to meet substantial growth in demand across all sectors.”35 The amount of
natural gas in Indiana will be enough for expanding its use. As natural gas is used more,
technologies that improve its efficiency and cleanliness will minimize drawbacks.
Natural gas is intended not to be a permanent solution but a bridge fuel. A bridge fuel is
used to transition from one source of energy to another. Natural gas would transition Indiana
from a state driven by coal to a state driven by renewable energy. The affordability of natural gas
aids the transition. The Indiana Energy Association states, “Natural gas is an increasingly
affordable energy option for residential and commercial consumers and in manufacturing,
chemical production and power generation.”36 With cheaper technology for procuring and using
natural gas, the price of natural gas has dropped significantly. Without the expensive upfront
costs of renewable energies, natural gas now costs only slightly more than coal. Natural gas is
natural gas prices were $13.63 per thousand cubic feet in Indiana vs. $16.29 per thousand cubic
33
“Natural Gas Basics.”
34
“Advantages and Disadvantages of Renewable Energy.”
35
“Natural Gas Basics.”
36
Ibid.
15
feet for the U.S. average in September of 2014.”37 The cost per thousand cubic feet of natural gas
in Indiana is $2.66 less than the national average. Because the difference in coal and natural gas
shock that made Indiana’s government worried about the Clean Power Plan and reluctant
towards renewable energy. Due to the increasing affordability of natural gas and its relative
cleanliness compared to coal, transitions to natural gas have already begun. According to Dillon
and Slaper, “From 2008 to 2012, reliance on coal as a source of energy has decreased 7.3 percent
and the reliance on natural gas has increased by 6.0 percent.”38 As illustrated by “Indiana’s
Energy Sources, 2008 vs. 2012” (See Appendix B), the use of coal is decreasing in Indiana while
the use of natural gas and renewable sources is increasing. If the trend from 2008 to 2012
continues linearly, reliance on natural gas will surpass reliance on coal in 2019. The trend can be
seen in the decisions of Indiana utilities. Dillon and Slaper state, “Indianapolis Power & Light’s
(IPL) Harding Street Station recently decided to invest $70 million to convert the plant from coal
to natural gas.”39 Indianapolis Power & Light believes the conversion is both environmentally
and economically beneficial. The utility argues that the upfront costs of converting to natural gas
are easier to manage than the maintenance and environmental costs of burning coal. Natural gas
provides Indiana with a cleaner alternative to coal while technology is developing to make
Conclusion
energy production. The first road leads to a reliance on coal and wants to repeal the Clean Power
Plan. The second road leads to renewable energy and wants to run the state solely on clean
37
“Natural Gas Basics.”
38
Dillon & Slaper.
39
Ibid.
16
power. There is a third road. This road transitions Indiana from coal to clean energy via natural
gas. By shifting to natural gas plants and reinstating incentives like net metering and subsidies to
produce renewable energy, Indiana can thrive on a cleaner source of energy currently supported
by the environment while eliminating political factors that discourage the production of
renewable energy. Although it is impossible to know what potential factors may influence
Indiana’s energy production in the future, technology should advance to make powering Indiana
Bibliography
“Advantages and Disadvantages of Renewable Energy.” Civil Engineers Forum, 9 Sept. 2014,
civilengineersforum.com/renewable-energy-advantages-disadvantages/.
“Coal in Indiana.” Indiana Geological and Water Survey, Indiana University Bloomington,
igws.indiana.edu/coal/.
Dillon, Matthew B., and Timothy F. Slaper. “The Long View: Indiana’s Energy Outlook.”
www.ibrc.indiana.edu/ibr/2015/outlook/longview.html.
“Indiana - State Energy Profile Analysis.” U.S. Energy Information Administration, U.S.
Janzen, Nick. “EPA Moves To Repeal Clean Power Plan.” WFYI Public Media, PBS, 9 Oct.
2017, www.wfyi.org/news/articles/epa-moves-to-repeal-clean-power-plan.
Lydersen, Kari. “Indiana Energy Bill Would Eliminate Net Metering, Move to 'Buy-All, Sell-All'
midwestenergynews.com/2017/01/24/indiana-energy-bill-would-eliminate-net-metering-
move-to-buy-all-sell-all-solar-model/.
www.indianaenergy.org/natural-gas-basics.html.
18
Glossary
Conversion Rate the percentage of energy actually able to be used as electricity/fuel from
Kilowatt Hour amount of electrical energy equal to the consumption of 1000 watts for
Reserve material that can be mined through means that are economically and
Scrubbing process that reduces the number and amount of hazardous chemicals that
which will bond with the hazardous chemicals in order to neutralize them
Stay of Proceedings ruling by a court in which the legal process on a particular case is halted;
the stay can either postpone the case indefinitely or be lifted to resume
proceedings