The Politics of Obama’s War on Coal

Upfront, it should be noted that Obama has been truthful about one thing since his original candidacy for president in 2008: his disdain for coal. Despite all the pie-in-the-sky talk about “clean coal” and carbon sequestration technology, we are no closer to either thing years later and likely will not be any time soon. His statements during that 2008 campaign about building coal plants, but going bankrupt doing so ring true today. Initially, the administration sought to impose a cap-and-trade system to reduce carbon dioxide emissions from these plants and other sources, but that was thwarted in Congress. Instead, he resorted to the EPA to formulate regulations that would attempt to achieve what he could not accomplish legislatively. We are all too familiar with this strategy.

However, these proposed regulations need some perspective. In a sense, these regulations were somewhat “imposed” on the EPA by the District Court in DC in response to third-party lawsuits which the government lost. In fact, these lawsuits were begun during the Bush administration. But, although the decision was not announced until Bush was out of office, it is the Obama administration’s EPA left holding the bag. That being said, the decision played into the hands of Obama’s climate change agenda and provided judicial cover for that which he wanted all along. Instead of appealing the District Court’s decision, the EPA decided to enter into a consent decree decidedly in favor of the environmentalists. Hence, the EPA proposed and is finalizing regulations that would basically make it financially unfeasible to build new coal-fired plants. Furthermore, it may require costly retrofitting of existing plants to bring them into compliance in the future.

Depending on the source, this is expected to cost the energy industry anywhere from $6 to $20 billion annually- all costs that will be passed on to utility customers. We can use the example of the recent regulations passed which address mercury emissions from power plants and we can all agree that these plants emit considerably less mercury than they do carbon dioxide. According to both the EPA and the Energy Information Agency, these mercury regulations are expected to cost energy producers $10 billion by 2015 yet create an estimated $6 million worth of reduced mercury emissions. Clearly, the cost-benefit ratio is seriously skewed here. This example is instructive of the cost of proposed carbon dioxide emission regulations.

Additional blame must be placed also on the shoulders of Congress. The original Clean Air Act specifically disallows cost-benefit analysis- a basic requirement of other regulatory agencies- when promulgating clear air (or water) regulations under the theory that no cost should be associated with the public health of the country. In the case of carbon dioxide, we are not talking about “public health” in the traditional sense of the word. Clearly, mercury emissions can cause a range of tangible negative health effects, but not carbon dioxide. The phrase “public health” is being liberally bastardized. Surprisingly, there is very little talk about amending the Clean Air Act to account for the reality of today. Instead, the main talk is about reigning in the EPA when it comes to regulating greenhouse gases. But if the Voting Rights Act of 1965 called out for reforms, the Clean Air Act is also a candidate for reform. This law has been basically untouched for 45 years. Meanwhile, since 1980 toxic emissions have decreased 96%. Granted, some of this was achieved by EPA actions, but a lot was also achieved unilaterally by industry itself as technology advanced.

The reason for these regulations is to control the emissions of carbon dioxide which in turn, the theory goes, would roll back climate change, or global warming. In essence, the EPA is proposing upsetting the entire energy sector for something that may not actually exist and if it does, man in general or Americans in particular can do nothing about. At the risk of being called a “denier” and such, the “science” of climate is no more settled any more than Obamacare is “settled law.” When the government interferes and starts “reforming” too quickly and too comprehensively, the results are likely disaster. Such was the case with Obamacare and such will be the case here.

And for what? For years I have heard about “energy independence” but every time we find the means, environmentalists throw a monkey wrench into it. Nuclear energy produces zero greenhouse gases but has been demonized based on a handful of highly publicized events that,in retrospect, were not major disasters, or avoidable. Hydraulic fracturing has allowed us to recover new reserves of natural gas, but that too runs afoul of environmentalists. Meanwhile, the United States sits on 497 billions tons of coal- enough to last us 500 years given the current rate of consumption. Considering that coal produces 40% of the energy in this country, imagine if that was suddenly not the case. Since going cold turkey with respect to coal is impossible without serious disruptions in the economy, the other option is to go with these regulations which are expected to cost the average family $1,200 annually in increased utility bills.

There are also human costs. The Heritage Foundation estimates that once fully implemented, these regulations will cost the country 800,000 jobs- 280,000 in manufacturing alone. Jobs in the coal mining industry are expected to decline by 43%. Because converting plants to natural gas would be a better option for compliance, more of that commodity would be diverted to power plants and the price of natural gas would rise an estimated 42% unless production increased. But, environmentalists are blocking that option with their opposition to fracking. Furthermore, many of the administration’s alleged mitigating programs like energy efficiency are nothing but rosy wishful thinking. Despite years of gas mileage requirements, we are no less reliant on oil than when these laws were originally passed. Meanwhile, countries like India and especially China have surpassed the US in carbon emissions with no end in sight.

Just a quick look at the top 10 coal producing states shows that they are mainly red states with Illinois being the only blue state in the mix. In terms of jobs, greater than 60% are concentrated in these red states. This is not only a war on coal, but a war on conservative red states with little regard for the workers and side industries that service the coal industry. Even in Illinois, the coal producing regions are not exactly Obama territories. Thus, there is no political downside for Obama. Obama’s reputation and approval was in the toilet in West Virginia well before his war on coal. The reason is simple: in presidential politics, the Democrats do not need West Virginia’s 5 electoral votes. If anything, Obama’s strategy enhances his standing among the environmentalist crowd.

However, the Democrats certainly do need the electoral votes from other coal producing states like Virginia, Pennsylvania and Ohio. This may explain the administration’s ambivalence regarding environmentalist concerns over fracking. To mitigate the loss of coal industry jobs, jobs will be created in the natural gas industry. In fact, that industry is growing by leaps and bounds in both Pennsylvania and Ohio. Should the Obama administration and his EPA weigh in against hydraulic fracturing, it may very well cost Democrats the electoral votes of these states.

The top 10 coal producing states account for 115 electoral votes. Of this total, 68 come from fairly reliable red states and only 18 from a blue state. The remaining 29 come from Colorado and Pennsylvania (although I generally count Pennsylvania as a blue state). In the Senate, these states are represented by 10 Democrats and 10 Republicans. Two are retiring at the end of the current term- both Democrats. Two Democrats are seeking reelection in 2014- Durbin in Illinois and Udall in Colorado. In April 2011, both Udall and Durbin voted against reigning in the EPA in this area when given the chance. Three other Democrats who voted against this effort are not running this year- Tester in Montana, Casey in Pennsylvania and Bennett in Colorado. When the time comes, they must be held accountable. That leaves Joe Manchin in West Virginia, Joe Donnelly in Indiana and Heidi Heitkamp in North Dakota. Donnelly, while a member of the House, crossed the aisle and voted with Republicans to reign in the EPA while Manchin, while governor, praised the efforts to do so. Heitkamp did not vote on the measure but expressed support for it while campaigning. Based upon their previous votes and the current composition of the Senate, are there enough votes now?

The answer is a definite NO. In 2011, the measure failed on a cloture vote (50-50) which killed its chances as an amendment to another bill. As it stands now, the vote would likely be 52-48 to essentially kill the effort. Even if the 2014 midterm Senate elections play out as expected, Republicans can hope for 54 votes at most. That would require Susan Collins of Maine switching her vote from 2011 and Mark Kirk, not exactly a strong defender of fossil fuels, voting for the measure.

In the House, there are 35 Democrats hailing from these 10 states. Only three- Rahall of West Virginia, Enyart of Illinois and Cuellar of Texas- broke ranks with fellow Democrats and voted to reign in the EPA in 2011. Three other Democrats may potentially cross the aisle: Cartright (PA-17), Gallego (TX-23) and Bustos (IL-17). Cartright represents the far northwestern suburbs of Philadelphia in the Lebanon Valley which leads into Pennsylvania coal country in the northeastern part of the state. Gallego has expressed support for fossil fuels (including coal) while Bustos’ district lies on the western border of Illinois and abuts certain parts of the coal deposits in Illinois. Thus, it would appear there is support for such a measure in the House with decent bipartisan support.

The problem, therefore, is the Senate, Harry Reid, and getting past a cloture vote. In my opinion, using the upcoming debate over raising the nation’s debt ceiling is the best vehicle to advance this measure (along with approval of the Keystone pipeline). The last time there was a fiscal fight, the GOP used the “theory” of the full implementation of Obamacare as a bargaining chip which, unfortunately, failed. All that GOP “theorizing” has largely become reality. In this case, however, polls indicate that almost 67% of voters support construction of the Keystone pipeline. When it comes to curbing the powers of the EPA in regulating greenhouse gases, 46% approve and 42% disapprove- clearly a closer call. With adequate education of the real-life costs of these regulations, some inroads with the public can be made if that education starts now. In the Obamacare debate, one of the criticisms against Republicans was: “And replace it with what?” In the case of coal, nothing has to be “replaced” or “reformed”- just well enough left alone. Instead, we should be utilizing a natural resource God blessed this country with in abundance. Let the scientific community continue its efforts to make it “clean” or to capture carbon dioxide, but these regulations will cause serious disruptions in the energy sector with real-world negative effects on all Americans, industry and the economy with negligible benefits as far as global warming/climate change goes.

Finally, this should be done before the Supreme Court rules whether the EPA overstepped its bounds in light of their previous ruling in Massachusetts vs. EPA which gave them authority to regulate greenhouse gases emitted by vehicles. It is under this rubric which the EPA now asserts their authority with respect to stationary sources of greenhouse gas emissions. Waiting until after June, which is when a ruling is expected, would represent the loss of a golden legislative opportunity. Unless Justice Kennedy has a serious change of heart since 2007, one can expect a 5-4 ruling in favor or the EPA. If this is made part of the debt ceiling fight and final passage of such legislation, Obama will likely threaten a veto since he wants a “clean bill.” Dare him to veto a bill which raises the debt limit which also includes measures on the energy front which Americans basically support. In the interim, it is important that the feet of every legislator who voted against coal, especially those in coal producing states, be held to the fire.

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