Dirty Language Doesn’t Help Coal Industry Defeat Obama’s Proposals
It’s the quiet before the storm. Or, stated
differently, tense negotiations are now occurring
just before the Obama administration unleashes it
“shock and awe” campaign on the coal sector -- an
industry that has fought to retain its throne and
that had tried desperately to defeat the president.
Indeed, the
Environmental Protection Agency is revising its
proposed rules for the construction of new coal
facilities, which should be released this coming
week. And while it may soften some of the standards
for new development, the inclination is still to
make it excessively difficult to build potential
plants unless they would have carbon capture and
burial.
Older coal facilities now account for at least a
third of all man-made carbon emissions. In April
2012, the EPA had released its proposals that said
such plants could emit no more than 1,000 pounds of
carbon dioxide per megawatt hour. That’s something
that the combined cycle natural gas plants can now
do but it is not something that any coal can
accomplish without the technology to capture and
bury the heat-trapping emissions.
The industry would like to see that standard nearly
doubled, which would be doable for many plants but
which would still require the
dirtiest coal units to cut their carbon
emissions by a third. Initially, EPA tried to
establish a mechanism whereby coal-based utilities
would have a decade to comply with the new
standards. But those same utilities are arguing that
they have, over 40 years, collectively
invested $100 billion to make coal 90 percent
cleaner and that such outlays would be wasted if
the coal plants are forced to retire.
The reality is that carbon capture and burial is not
commercially available at present. And if it ever
does come to pass, it won’t be cheap. At the same
time, the price of natural gas has remained
comparatively cheap while modern gas plants can get
easily permitted.
The result:
Coal’s market share has fallen from around 50
percent of the electric generation market in 2008 to
about 38 percent today. Meantime, natural gas now
comprises 30 percent of the same market, although
that figure could rise to 50 percent in 20 years,
says the U.S. Energy Information Administration.
Economic Consequences
The practical effect is that at least
200 coal facilities that burn 31,000 megawatts
are in the process of closing, says the
Energy Information Administration. American
Electric Power, Duke Energy, FirstEnergy,
MidAmerican Energy and Southern Co. have
all been impacted.
“The EPA does not consider the economic consequences
of their actions, which in this case will not only
erase American jobs; it will raise annual costs to
families by hundreds of dollars, the equivalent of a
monthly grocery bill,” says Mike Duncan, chief
executive of the
American Coalition for Clean Coal Electricity.
He urged Americans to vote against President Obama
and along with his contemporaries, have labeled the
administration’s energy policies as a “war on coal.”
The language that the industry has been using to
define
President Obama’s energy and environmental position
have not been helpful to their cause. In fact, it
has backfired as the president won most every state
in the union except for those in the deep south as
well as West Virginia and Kentucky, which is coal
country. It lost Ohio, another coal-producing state,
which had been considered the key battleground that
would decide the 2012 election.
Therefore, the coal sector’s negotiating power is
not what it used to be. And this is an important
factor to grasp, given that the next phase of the
administration’s climate change policies is to craft
those rules that would affect the future of all
existing coal units. Proposed standards are expected
out by mid-2015 and then to be implemented about a
year later, ignoring the expected legal challenges.
While coal interests have fought stricter emissions
requirements, they have also been joining with the
public sector to advance those technologies that are
much more efficient than the older “pulverized”
plants. Those processes will only get better, and
may allow coal to both regain stature and to hedge
against eventual higher natural gas prices.
The dirty words being used to describe Obama
administration’s energy policies are ricocheting.
But that political tactic has shown no signs of
abating, which will make it excessively difficult
for the coal sector to rebound and to set a new
course.
Twitter: @Ken_Silverstein
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