Coal Regs Lined Up in Queue
Senator Rockefeller's Plea to the Industry
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.”
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.