EPA Could Kill Coal Industry

Commentary y M.D. Kittle, for Watchdog.org

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Want to further weaken an anemic economy that has been struggling to recover?

Kill coal.

At least freeze the construction of new coal-fired power plants.

That’s how the coal industry, congressional members from coal-producing and manufacturing-heavy states and some leading economists see as extreme new Environmental Protection Agency limits on greenhouse gases emitted by power plants.

The EPA is expected to release its revised, proposed caps on carbon dioxide output by Friday.

Sources tell Watchdog.org that EPA Administrator Gina McCarthy will unveil the proposal to journalists Friday morning at a National Press Club breakfast, where McCarthy will “highlight the administration’s commitment to carrying our President Obama’s Climate Action Plan to reduce carbon pollution and address the impacts of a changing climate.”

The limits are the first of their kind, a key piece of Obama’s drive for federal agencies to take on climate change, what the administration until recently billed as “global warming.”

The rumored details of the proposal are generating some dire predictions from industry insiders.

Jason Hayes, associate director of the American Coal Council, tells Watchdog.org the proposal is rumored to cap CO2 emissions at as low as 1,100 pounds per megawatt hour, and no higher than 1,500 pounds. EPA was asked to go back to the drawing board last year amid a firestorm of criticism after it proposed like standards for natural gas and coal-fired power plants, at 1,000 pounds of CO2 per megawatt hour.

The glitch, Hayes says, is the technology, mainly to capture carbon, doesn’t exist commercially to meet such rigid standards.

Prairie State Energy Campus, in Washington County, Ill., comes the closest to hitting the mark with its $1 billion investment in Best Available Control Technology. While the coal plant is said to be the cleanest coal-fueled power plant in Illinois and one of the cleanest in the world, its CO2 emission rate remains significantly higher than the potential new EPA limits.

Despite gains in natural gas and renewable energy output, coal still powers about 40 percent of U.S. electricity needs.

Development of coal-fired power plants doesn’t come cheap, and Hayes said unreasonable greenhouse gas limits on new and, eventually, existing coal facilities will kill investment.

That, industry officials assert, could be disastrous for an economy mired in slow job growth with an unemployment rate of 7.2 percent – down last month, mainly because 312,000 people just stopped looking for work.

The Washington, D.C.-based National Mining Association, which represents coal and mineral mining companies nationwide, warns the EPA’s limits could put in peril an industry that supports more than 800,000 jobs, many of them delivering wages well above state and national averages.

“That is the area that is really going to put this conversation at the forefront,” said NMA spokeswoman Nancy Gravatt. “This puts thousands of middle-class jobs at risk, and it’s akin to an energy tax on consumers. The hardest hit would be those on fixed incomes, like retirees.”

The average household already spends 20 percent of its disposable income on energy, Gravatt said. Unattainable CO2 regulations would only add to that energy burden, the mining spokeswoman asserts.

Also in the crosshairs, according to economic experts, the manufacturing sector, which has seen a resurgence in old industrial-heavy states like Ohio, Indiana and Wisconsin. Gravatt said limiting coal would hit hard a sector the president has made a big show of supporting.

“When you look at the states with the highest percentage of coal-fired electricity, they tend to be states with the highest number of manufacturers,” she said.

Some damage already has been done in what Obama administration critics have labeled the president’s war on coal.

U.S. Rep. Keith Rothfus and U.S. Sen. Pat Toomey, Pennsylvania Republicans, and at least 11 of their colleagues in the Pennsylvania congressional delegation in July urged Obama to stop the EPA from finalizing its new regulations on greenhouse gas emissions.

The letter was sent two days after a local energy provider announced it would close two of its Western Pennsylvania coal-fired power plants over concerns about the costs of complying with current and future regulations.

“(W)e learned that at least three hundred Western Pennsylvanians will lose their jobs because of the cost of complying with current and future regulations,” Rothfus said in a statement. “These hardworking moms and dads are losing their livelihoods and the ability to support their families and contribute to their communities. The disastrous impact of President Obama’s burdensome regulations on our communities underscores the need for regulatory reform, rather than more red tape.”

Nonsense, says Frank O’Donnell, president of environmental watchdog Clean Air Watch.

“In the real world, I’m not sure if these standards will have much, if any, impact. No one is really contemplating building new coal plants now,” he told Watchdog.org. O’Donnell added that the cost shifts in the energy market have made natural gas a more viable option for power plant developers.

“Coal was once the king of the hill, and now it is sliding to the bottom of the hill,” the environmentalist said.

The Obama administration plan includes funding for carbon capture technology, demanded for new coal-fired plants. Some $8 billion in tax credits would be on the table.

Stricter limits for new plants will drive stricter regulations on existing plants, where the real problem is, O’Donnell said.

“We hope the EPA will in fact proceed with these regulations in an expeditious fashion,” he said. “If they do, I see the health and environmental communities cheering very loudly for the president to move ahead and make this a positive part of his legacy.”

Coal industry officials say they welcome and support advancing cleaner standards. They just want the Obama administration to assign reasonable, achievable targets. If the rumored limits come to pass, Hayes said it would be tantamount to the government demanding General Motors build cars with fuel economies of 50 mph to 60 mph overnight.

Coal advocates remain hopeful the new EPA administrator lives up to a recent public relations description, which characterizes McCarthy as a “leading advocate for common-sense strategies to protect public health and the environment.”

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