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The Wages of War


For most Americans asked to fork over a sizeable chunk of their tax dollars to support the world’s biggest defense industry, the pocketbook pain is lessened greatly by the fact that our enemies are out there and dedicated to destroying us.

There is resurgent Russia, wakening from its post-Soviet slumber to once again menace eastern Europe and challenge us in the Mideast. China is flexing its muscles by building bases outside its territorial waters to threaten sea lanes. Islamic fanatics take over vast stretches of Iraq and Syria, fighting our allies there and inspiring terror cells embedded here. We have little choice but to finance a military that can keep us safe from foreign enemies who seek our destruction.

But for the coal industry, that fact provides little comfort, for the Pentagon offers no defense against the government that wants its destruction. Coal’s worst enemy is not a foreign government but its own government. The White House is actually tougher on the domestic coal industry than it is on Russia, Syria or the Taliban.

Some call it the war on coal — waged not only here, but abroad, too. The National Mining Association (NMA) has always said this charge, while understandable, minimizes the destruction these anti-coal policies inflict on the country as a whole. Fewer coal plants and production means fewer good jobs, less fuel diversity, less reliable supplies of affordable energy and, of course, further hardship for poorer households least able to absorb “the EPA premium.”

Last month, two new studies of the impact of anti-coal regulations underscored both points. From these analyses, both commissioned by NMA, we can virtually measure how coal mining and the larger economy it supports are both under attack.

The first study brings home the irreparable economic harm to a dozen coal states caused by the Environmental Protection Agency’s (EPA) Clean Power Plan (CPP), a rule to curb carbon emissions from the existing coal fleet. Energy Ventures Analysis (EVA), an independent economic consulting firm in Washington, used EPA’s own model to calculate wholesale power cost increases anticipated from the rise in natural gas demand and the capex required to replace 41 GW of coal plants that would be retired over and above what is projected without the CPP.

EVA shows CPP adds $15 billion to the cost of electricity by 2022 and $214 billion by 2030. Put another way, by then, nationwide wholesale power costs will spike by more than 20% over the projected cost without the rule. And 16 states will see a 25% increase, most likely your state if you’re reading this magazine. To this tab, ratepayers will also be picking up a $64 billion bill to replace the lost coal capacity. Already, utilities will be scheduling additional plant closures and budgeting for replacement costs in order for states to meet EPA’s interim deadlines.

Small wonder that 20 states so far plan to join NMA in court to stop the rule.

If EPA’s CPP is aimed at destroying coal’s customer base, the OSM’s Stream Protection Rule (SPR) is aimed at destroying its production. Recall the SPR, published in draft in July of this year, involved a massive re-write of some 475 regulations that govern the oversight of surface mining and reclamation. The analysis by Ramboll Environ for NMA projects 268,000 jobs will be lost in mining and coal-supported employment. Of these, almost 74,000 will be at risk in both surface and underground operations. The reason of course is the massive volume of coal that will no longer be economic to mine. The study found recoverable reserves would drop by 62.5% with lost production from SPR mining restrictions valued at $22 billion. In that lost volume of coal are deposits that support the highest number of jobs, hence more than 71% of total coal mining employment would be at risk.

The Pentagon protects us from foreign governments, but who will protect us from our own?

Luke Popovich is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.