The coal lobby can't catch a break these days. First utilities reduce coal demand in favor of increasing purchases of cheap natural gas, then the EPA  proposes its endangerment finding on carbon dioxide pollution, then mountaintop removal gets called into account again for polluting rivers, and now the government is questioning the industry's right to refer to the US as "the Saudi Arabia of coal".

A recent WSJ article titled "The US Foresees a Thinner Cushion of Coal" asks  a pretty straightforward question, is the US really the Saudi Arabia of coal? The answer that they got from the head of the US Geological Survey team responsible for an extensive analysis of Wyoming's Gillette coal field was actually no. That once the costs of extraction are included in the analysis, "we really can't say we're the Saudi Arabia of coal anymore". This statement is not only a wake call to industry but also a major blow to coal lobby's claims that coal is America's cheapest, more reliable long-term energy solution.

The fact that the glory days for coal are over is not news to the mining companies who are witnessing coal seams thin over time, nor is it a surprise to utilities that have seen an increase in supply delays due to production problems. However, it is pretty significant for investors in long lived coal-fired power facilities.

If, in fact, we have reached the point of peak "cheap" coal, where coal ceases to be competitive at higher prices against other fuels and technologies,  the investment implications are significant. Not only would peak "cheap" coal raise the economic risks of investing in new coal-fired power generation, it would essentially render plans for a  liquid coal industry in the US unworkable.  

This is not to say that peak "cheap" coal will lead to peak coal anytime soon, only that costs have risen to a point where it is getting very difficult to carry on believing supply risks are non-existent.

In fact, the misconceptions behind the meaning of peak coal are actually very similar to the misconceptions behind the meaning of peak oil. Neither will happen in time to keep the planet from burning and both are moving targets based on the cost of extraction.

In the case of coal, more land would be disturbed, more methane  would be released, more infrastructure costs  would  be incurred, and more dangerous work would need to be performed to get to the more expensive coal seams. The coal may still be physically abundant, but it just won't be easily accessible.

In sum, a peak "cheap" coal world is probably already upon us given concerns expressed by government survey officials and industry players. The lesson to be drawn here is that apart from the obvious environmental and national security benefits of greater reliance on renewables and more serious efficiency efforts, these clean energy options also have the benefit of delaying the onset of much more expensive coal supplies due to rapid depletion of cheap coal resources.  Contrary to the coal lobby's expensive messaging,  the truth is that a coal -heavy energy policy  is neither  a  cheap nor dependable  way  to serve America's long term needs.