Coal news and updates

The Republican war on President Obama’s “war on coal” continues. Sen. Mitch McConnell (R., Ky.), the Senate minority leader, took to the Senate floor Thursday to decry what he sees as a regulatory offensive by the Obama administration designed to kill coal jobs in his home state.

 

The catalyst? Upcoming rules by the Environmental Protection Agency that would mandate, for the first time, standards for greenhouse-gas emissions from new power plants. EPA chief Gina McCarthy is expected to unveil the details of the new standards Friday.

 

“It’s just the latest administration salvo in its never ending war on coal–a war against the very people who provide power and energy for our country,” Sen. McConnell said. He is pushing the Saving Coal Jobs Act, which would rescind the EPA’s ability to regulate power-plant emissions and streamline coal-mine permitting.

 

The GOP has been railing against the Obama administration’s “war on coal” since before there was an Obama administration. Controversial remarks made in 2008 by then-candidate Barack Obama and Steven Chu, who said “coal is my worst nightmare” and later became energy secretary, fueled years of political talking points. In the 2012 election, Republican nominee Mitt Romney declared himself a friend of coal in an unsuccessful bid to win swing states like Ohio and Virginia

 

The EPA plan would essentially ban new coal-fired power plants unless they use expensive technology to capture carbon emissions, people familiar with it say.

 

“Kentucky coal miners have suffered far too much already. Congress cannot sit idly by and let the EPA unilaterally destroy a vital source of energy and a vital source of employment,” said Mr. McConnell, citing reports that a local coal miner, James River Coal Co.JRCC -2.74%, would furlough more than 500 workers.

 

It’s true that EPA rules are weighing on coal’s future in the U.S., but Washington is hardly the only problem for Appalachian coal. A glut of cheap natural gas unleashed by hydraulic fracturing has radically changed the way the U.S. generates electricity, making coal-fired power more expensive than gas-fired generation in many areas.

 

More importantly, not all coal is equal. Appalachian coal is the most expensive to produce in the U.S.; coal from the central region is cheaper, and coal from Wyoming’s Powder River Basin is cheaper yet. As long as Appalachian coal is sold at a premium for the steel industry, the economics work. But selling pricey Appalachian coal for power production is an increasingly losing proposition. That’s why coal production in the east has steadily shifted to the west in the last two decades.

 

James River Coal Company attributed its Kentucky layoffs to weak domestic and international demand. Another factor is the company’s production costs, reported in an August regulatory filing: $77.30 a ton for its Appalachian coal vs. $36.83 a ton for its Midwest coal.

 

Source: blogs.wsj.com