Coal news and updates

Looming EPA ‘war on coal’ draws business backlash

Would a major rewrite of pollution laws by the Obama administration kill thousands of U.S. jobs and raise electricity prices? Opponents say yes – and they aim to put the issue front and center ahead of the fall congressional elections.

In a preemptive blow, the pro-business U.S. Chamber of Commerce unveiled a study arguing that the new environmental proposals could cost the economy up to $50 billion a year and destroy a quarter of a million jobs. The study comes out just days before the Environmental Protection Agency is slated to lay out new guidelines aimed at slashing greenhouse gas emissions, largely by shifting the nation away from the use of coal.

The debate is sure to intensify as the November elections draw near, especially in states that are heavy producer or users of coal, such as Kentucky, West Virginia, Missouri and Ohio. Critics are lambasting what they call a “war on coal” and trying to divide Democrats. Vulnerable Democrats such as Sen. Mary Landrieu of Louisiana have already criticized the Obama administration or asked the White House to delay the rules.

Is the chamber estimate believable? No one really knows, but business groups have repeatedly exaggerated the effects of environmental and other regulations in the past.

Groups that back the new Obama administration goals argue they will make the U.S. more energy efficient, cut household energy costs and even create thousands of new jobs. Yet those predictions are probably just as iffy as the Chamber’s dire warnings.

Under the EPA guidelines, the Obama White House hopes to reduce the percentage of U.S. electricity generated by coal to 14% by 2030 from about 37% right now. Coal is the single biggest source of electricity generation in the U.S. and has been for more than 60 years.

The amount of electricity generated by natural gas – a cleaner fuel than coal – would rise to 46% by 2030 from about 30% now under the EPA plan. That would make it the biggest generator of the nation’s electricity.

One potential danger of such an ambitious goal is that it could make the U.S. too dependent on a single source of energy whose supply is uncertain. That could make the nation vulnerable to spiraling prices if natural-gas supplies declined or were disrupted.

For now the U.S. is operating on the assumption that huge shale oil and gas reserves will make the country a natural-gas powerhouse for decades to come. Yet the shale revolution is still in its early stages and estimates of recoverable reserves are still in flux. Federal authorities, for example, reportedly will soon slash their estimate of reserves in the large Monterey formation in California by a whopping 96%.

The government’s track record on energy policy has sometimes proven shortsighted or unrealistic. In 1978, for instance, Congress passed the Industrial Fuel Use Act that effectively banned the use of natural gas as a fuel for new power plants, owing to a perceived shortage.

The result was to spur the construction of more coal-fired plants and to boost coal usage to modern record highs until the repeal of the law a decade later.

Source: MarketWatch/The Wall Street Journal