For years, the coal industry's strategy for dealing with climate change has gone something like this: 1) Fight off caps on carbon pollution for as long as possible. 2) Convince politicians to throw gobs of money at fancy low-carbon technologies like carbon capture and sequestration. 3) Pray that those fancy technologies actually work. The strategy has succeeded so far. Seeing as how half the electricity in the United States comes from coal, there's never a shortage of members of Congress willing to do whatever the industry wants.

And yet... some of the smarter coal backers out there are starting to realize that this could turn out to be an absolutely terrible strategy. Last year, West Virginia's Robert Byrd came to realize that the coal industry was stuck in a counterproductive 19th-century mindset. Local companies like Massey Energy were ripping apart mountains, poisoning streams, and flouting mining safety rules, all the while insisting that it was downright un-American to ask the coal industry to change its ways. And so Byrd suddenly became a strong advocate for reforming the industry—and that included pushing for a cap on carbon pollution.

Now Byron Dorgan is making a similar shift. Politico's Coral Davenport reports that the North Dakota senator has started pleading with coal executives to stop being so recalcitrant on energy policy:

“Regulations are coming in the future. If coal does nothing, coal will lose,” Dorgan said in an interview with POLITICO. “The reason I have reached out to the coal industry is that they’ve been on the defensive position, not negotiating with anyone, and they’re going to lose under that. With or without carbon regulations, there will be a substantial conversion to natural gas, and coal will lose.” Dorgan said that while it looks increasingly unlikely that a climate change bill will pass this year, he does believe a price on carbon is inevitable in the coming years—a message he also pressed on his coal allies.

There are a couple important things going at play here. First, the EPA is finally starting to enforce a variety of Clean Air Act and Clean Water Act rules, after eight years of inaction under the Bush administration. There's the new interstate rule that will crack down on smog- and haze-forming pollutants like sulfur-dioxide and nitrogen-oxide from power plants. The EPA is also likely to tighten restrictions on coal ash and mountaintop-removal mining in the near future. And new miner-safety regulations are on the way.

All of these things will put a major dent in coal's market share. For a long time, coal was the cheapest energy source because the industry was allowed to offload so many of its hidden costs onto the public—asthma-causing air pollution, shoddy safety regulations, coal debris dumped in Appalachian streams... But as the government starts regulating these side effects more closely, it will become clear that coal isn't actually all that cheap. Meanwhile, natural gas prices are falling and prices for renewables are tumbling. Fewer and fewer utilities want to keep plunking money down on coal.

Then there's global warming. Again, the industry is clinging to the hope that carbon capture and sequestration (CCS) will become viable someday, and low-carbon coal can become America's energy source of choice. Right now, though, CCS is very much unproven, and it's hugely expensive. A recent GAO report found that CCS simply won't take off unless there's a price on carbon or some sort of restriction on greenhouse gases. The coal industry could fight for a cap-and-trade system that a) allowed utilities to continue operating (some) coal-fired plants, and b) provided financial incentives for carbon capture. But, instead, the industry is just digging in its heels—and, in the end, that may prove to be a huge blunder.

(Flickr photo credit: railtalk)