Coal Regs Lined Up in Queue

Senator Rockefeller's Plea to the Industry

Ken Silverstein | Jun 25, 2012


When President Obama ran in the West Virginia Democratic primary, he had some tough competition -- from a prisoner who got around 40 percent of the vote. The contentious issue: coal, and the host of new rules coming down that will put severe limitations on the industry that is vital to the state.

With a booster’s club like that, one would expect the West Virginia political establishment to line up lock-step behind the coal sector’s agenda. It still is -- with the exception of its senior U.S. Senator, Jay Rockefeller, a Democrat who says that it is virtually impossible for the coal industry to defeat the rules now in the queue and that it should begin to cooperate with the Obama administration.

“Instead, with each bad vote they give away more of their leverage and lock in failure,” says Rockefeller

The hot topic now is the new mercury rule, which critics say will cost $9.6 billion a year to implement and which will raise the cost of electricity. Last week, those same opponents tried unsuccessfully to get the U.S. Senate to rollback that law. The American Coalition for Clean Coal Electricity says that the new mercury rule, in combination with other pending coal-related regulations, will cost 183,000 jobs per year through 2020 and increase electricity prices by $170 billion. 

The Environmental Protection Agency and its supporters counter that the standards will result in $90 billion in yearly benefits, which include those tied to heath and the purchase of new pollution control equipment. The law, required by the 1990 Clean Air Act, requires utilities to reduce mercury emissions by 90 percent using best available technologies.

Roughly, 1,400 coal-and-oil-fired power plants exist. Of those, 60 percent have already acted while 40 percent, or 600, have not.

“Their actions will put thousands of hard-working Americans out of a job in the worst economy in generations,” says Senator Joe Manchin, D-WV. “From the day I arrived in the Senate, I’ve been determined to stop the EPA’s job-killing agenda, and this resolution of disapproval takes an important step to rein in this out-of-control agency.”

Losing Battle

The coal industry, in fact, is fighting an uphill battle. The argument is really over those coal facilities that were built in the middle of the last century and which have, over the years, gotten a number of extensions. It’s not just the mercury rules that will affect coal operators. It’s also ones tied to coal ash, greenhouse gases and the cross-state air pollution regs.

The utilities' choice now is to either shut down or retrofit -- a decision made less complicated by the relative low cost of natural gas, whose combined-cycle plants are more efficient and are having a much easier time with federal environmental regulators. The Edison Electric Institute and some of its coal-based utility members have said that they will fall in line but that they need more time so that they can make an orderly transition.

However, even the most ardent critics -- American Electric Power and Southern Co. -- have lightened up. With respect to the mercury rules, AEP is saying that EPA is giving it some leeway while it is also saying that cheap natural gas prices are providing it an “easy” out.

“The dialogue on coal, its impacts, and the federal government’s role has reached a feverish pitch,” says Senator Rockefeller.  “Carefully orchestrated messages that strike fear in the hearts of West Virginians and feed uncertainty about coal’s future”  are all part of slick ad campaigns funded by coal interests.

The senator says that such “scare tactics” have backfired -- because the positions in which the industry is so adamant are ones that can’t prevail. Instead of realizing that the times are different and that it must evolve, the sector will not accept today’s realities: Appalachian coal reserves are declining, natural gas is on the rise and the steady shift to a low-carbon economy.

By contrast, the coal sector has taken an “all or nothing” stance, Rockefeller says. It has lost, and badly. Now it has little credibility among U.S. lawmakers on Capitol Hill and it has no one to blame but itself.

Senator Rockefeller just wants the industry to recognize this fact before it loses all relevance: Help fund the research and work with the vendors to develop the modern coal technologies that its utilities would eventually incorporate. If past is prelude, however, coal groups will spend more money on lobbying and creating new marketing campaigns.

EnergyBiz Insider is named a 2012 Finalist for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been named one of the Top Economics Journalists by Wall Street Economists.

Twitter: @Ken_Silverstein

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Two Cents

In a perfect world we would make sensible economically sound environmental decisions. Years ago the US with vast coal reserves would have been pursuing cleaner coal technologies, like gasification and the SASOL technologies to produce power, fuels, and other chemicals from coal. We would be drilling and exporting natural gas, oil, and other high value products we created from these sources. While this economic boom was occurring we would have been investing in research for advanced nuclear, solar, wind, tidal, and other developments to expand our energy capability. As these technologies developed more coal and natural gas could have been shifted away from power production into more high value products like chemicals, fertilizers, and transportation fuels for export. Just think where the US economy would be now if we had been an energy exporter for the last few decades?

It doesn't matter how much coal is left in the ground...

It's ashame that the world is moving on and that the people who work in the coal industry are going to suffer as the economy shifts.  Being a former Typewriter salesman during the advent of computers, I can tell you that it sucks when your industry goes away.  But reality is what it is and coal simply costs too much. 

Not when you simply look at what it costs to buy a ton of coal, but when you look at the external costs that are shouldered by society in general.  These external costs are very real and not just some tripe that the EPA made up in order to be mean to the coal industry!  Mining and burning coal releases mercury, uranium and a host of other nasty things into the environment and these releases come at a cost.  According to the Union of Concerned Scientists, that cost in the US is over 120 BILLION dollars!!!!!!

That 120 Billion dollar figure doesn't even count the costs associated with Climate Change such as sea level and sea temerature increases.  As sea levels rise and storms increase in intensity shoreline communities are going to take it in the shorts!  Insurance premiums are already rising in these areas and public resources are already being diverted to coastal areas to attempt to hold the seas back.  While not all of this is coal's fault, a good deal of it is and the coal industry sticking it's head in the sand and ignoring reality isn't going to do anybody any good.


Bob "The Clean Energy Guy" Mitchell

Converting existing coal burning power plants to thorium.

Power plants don't have to go down with coal.

I think it is quite possible to build a 1,000 megaWatt (electrical) thorium conversion boiler replacement for the Loeffler boiler found in most large coal burning power plants.

Some say heat from thorium is 2,600 times cheaper than heat from coal.

James P Holm, PE


I believe Senator Rockefeller may be correct

I believe the Coal Industry may well have messed up by going against the EPA on the mercury emissions rule.  It left a very bad impression to be fighting against this in the manner they did.  They should have presented facts to support their position or merely gone after the limits if they are unreasonable.  I have not had time to fact-check but do recall a commenter on another article mentioning that the primary evidence of mercury deposits were on the west coast rather than around coal plants around the country, particularly in the eastern US.  Now, if that is indeed a fact it is a valid and verifiable argument against which the EPA would have little or no counter-evidence.  EPA gets away with hysterical statements about premature deaths and illnesses and health costs resulting from coal simply because of the name of the agency.  No one seems to really catch on to the fact their statements often have such a wide range of numbers that it is readily evident they cannot prove what they say--they are just tossing out some wag for impact.

Regardless, the Coal Industry approach to the issue pretty much has blown up in their faces and crippled them for future fights where they may be entirely correct.

US is the Saudi Arabia of Coal

Focus on WV coal reserves does not properly protray the vast US coal endowment. The US is the Saudi Arabia of coal. At present production rates, there is a 500 year supply in the Powder River basin -- and that's on the outcrop -- what you can see with the naked eye. In addition, 40% of our coal resource is in Alaska and is untouched. Unlike oil, coal supply is so plentiful it is priced close to its cost of production. Rather than eliminating this resource, intelligent energy policy should focus on how to exploit our coal in a more environmentally benign manner.