ABSTRACT
This chapter reviews how higher costs imposed by environmental requirements affect coal conversion economics, the impact of capital diversion in drying up capital sources, and the impact of delays and uncertainty on industrial decisions to move to coal. It explores the strategies industry would employ to overcome potential limitations arising from the Clean Air Act. Use of coal produces sulfur oxides, particulates, carbon monoxide, and nitrogen oxides, as well as trace amounts of radionuclides and heavy metals. Industry groups charged, for example, that the Act would be prohibitively costly, would result in delays, would divert capital into unproductive investments, and would delay and kill projects. The Clean Air Act and state requirements do stimulate greater demand for low sulfur coal which is more costly. Even in the future, when the Prevention of Significant Deterioration limitations become more binding as sources are added, the Clean Air Act would most likely inhibit coal conversion in only a few regions.
