Blog: Bankrupting the Coal Industry: A Promise Actually Kept by President Obama…Unfortunately


Date: May 24, 2012
Location: Washington, DC

Coal is the largest source of electricity both in the United States and around the world. In the US, we have more than 600 coal-fired power plants across the country that account for 45% of the electricity generated in 2010. Although we are not the largest producer of coal worldwide, we have enough recoverable coal reserves to last at least another 250 years -- one and half times more than Russia, our closest competitor. In fact, the US has 29% of the world's known coal supply -- making the United States the Saudi Arabia of coal.

Coal doesn't just bring this country cheap electricity. It also creates jobs. According to the National Mining Association, coal mining accounts for more than 555,000 jobs in the United States and contributes $65.7 billion to the national gross domestic product. So, with the largest supply of coal in the world and at a time when we continue to suffer from record-high unemployment, you would think the president would be interested in expanding coal production to lower energy costs and create jobs.

Unfortunately, President Obama and many Congressional Democrats continue to fight US coal production in every way they can. After they failed to pass the controversial cap-and-trade legislation through Congress, the president has used the Environmental Protection Agency (EPA) to essentially regulate cap-and-trade into law. Through the EPA, the president has enacted some of the strictest and most expensive regulations on the energy industry in our nation's history, and arguably one of the energy sectors hardest hit by the EPA is the coal industry.

But we shouldn't be surprised about this. In 2008 when he was running for president, then-Senator Obama told the San Francisco Chronicle if he was elected president his administration's policies would bankrupt the coal industry. Whether it's his promise to cut the deficit in half by the end of his first term or his promise that if you like your health care plan you can keep it under ObamaCare, the president has become notorious for breaking his campaign promises. Unfortunately, his promise to bankrupt the coal industry is a promise he apparently plans to keep. A promise that will dump higher electricity rates on American families and cause tens of thousands of Americans to lose their job.

Under the Cross-State Air Pollution Rule (CSAPR) and the Utility (Maximum Achievable Control Technology) MACT regulation, more than 32 mostly coal-fired power plants will be forced to close their doors according to a survey by the Associated Press in December of last year, and 36 additional plants may have to close due to additional new regulations. All combined, those plants produce electricity for more than 22 million homes. According to the AP,

"The fallout will be most acute for the towns where power plant smokestacks long have cast a shadow. Tax revenues and jobs will be lost, and investments in new power plants and pollution controls probably will raise electric bills."

But it doesn't end there. In addition to those two regulations, the EPA has also proposed the Boiler MACT standards, four rules aimed at putting coal-fired boilers out of business. It is expected to impact more than 200,000 boilers across the nation and by the EPA's own estimates will impose $5.8 billion in up-front capital costs, in addition to annual compliance costs of $2.2 billion. Even worse, a Commerce Department analysis concluded that the new regulations would cause job losses of 40,000 to 60,000.

Then, earlier this year, the EPA announced yet another set of regulations aimed at coal. The New Source Performance Standard, as it is known, would require newly built coal-fired power plants to cut their emissions by almost 50 percent. The majority of coal plants will be unable to comply because the costs will skyrocket, essentially banning the building of any new coal-fired power plants.

Whether the president and environmentalists like it or not, coal is an abundant resource that must be a part of our overall energy plan. Regulating the industry into oblivion will only cause energy prices to skyrocket and tens of thousands of Americans to lose their job.

Next week I will talk about nuclear energy, the emission-free energy industry of our future, and how Georgia securing the first newly built nuclear power plant in more than 25 years places our state in first place in the energy race. I encourage you to visit my website each week to check out the latest edition of Power the Nation.