The amount of electricity generated by natural gas dropped 14% in the first seven months of the year while coal use rose, according to government data that underscore the possible impact of planned new Washington regulations on power plants.

While natural gas is playing a bigger role in power generation relative to coal than it did a few years ago, the trend isn’t necessarily inexorable. When natural-gas prices swing upward, coal can regain ground.

That’s what happened in the first seven months, as power generated by coal rose 7.5%, according to the Energy Information Administration. Coal accounted for 39% of all U.S. power generation in that period, compared to 27% for natural gas.

If market forces are giving coal a greater role, that raises the stakes for federal regulation. The Obama administration said this month it plans to impose strict greenhouse-gas standards on new power plants, effectively ruling out new coal-fired plants using conventional technology. The Environmental Protection Agency is also starting to develop new standards for existing power plants, which could reduce the use of coal plants even further.

Read more from the WSJ article here.

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