A New Study Exposes One of the Biggest Cover-ups in Modern Industrial History
By Luke Popovich
A rhetorical staple of anti-coal activists and regulators has been that plummeting natural gas prices have triggered the steep fall of the coal industry, not the Environmental Protection Agency’s (EPA) power plant regulations.
Blame market conditions, said the White House, for the 67,000 miners who joined the jobless line since 2011 and the 200,000 jobs lost throughout the supply chain — not our record-breaking regulatory tear. EPA officials join in the expression of sympathy for the depression in coal communities, noting that fuel competition from the shale gas revolution caused it, not our policies that only coincidentally kicked in at the same time.
This is self-serving political rhetoric — and it’s wrong. A new analysis by the King University School of Business and Economics, echoing earlier findings from Duke University, shows how the real culprit behind distressed coal communities and jobless miners has been federal regulations, not market conditions. Up until 2013, low natural gas prices did indeed depress coal consumption for electricity generation, but only by a modest 20 million tons out of the 924-million-ton total. Soon afterward, EPA regulations began to take their toll on coal-based power plants, surpassing gas as a factor in coal’s decline. Regulations like EPA’s Mercury and Air Toxics Rule shuttered 62,000 megawatts of coal capacity, dropping coal consumption by an estimated 105 million tons compared to what consumption would have been without it and similar regulations.
The conclusion from the Bristol, Tennessee, university not only contradicts the official administration narrative behind the industry’s demise and lost employment. It also exposes one of the biggest cover-ups in modern industrial history — the attempt to conceal the destructive impact of regulatory policy on high-wage jobs.
Lost coal production means lost employment — in this case an estimated 13,000 coal jobs paying an average of $84,000 annually. The volume of lost production could have indirectly supported another 45,000 jobs and supplied affordable electricity to 20 million residential users. The cause of all this was not fuel competition, as the Obama administration would have it, but federal regulation.
The King analysis is the latest but not the only study to place the blame where it belongs. Duke University’s Nicholas School of the Environment found that only 9% of coal power plant capacity was threatened by inexpensive natural gas before EPA regulators targeted coal plants with extinction. But once they did, more than 56% of coal capacity was threatened with closure.
Coal miners aren’t the only losers from these regulations. Weakening coal’s ability to act as a brake on electricity price increases from other energy sources exposes consumers to higher and more volatile energy bills. The Duke study found that by eliminating fuel competition from coal, EPA’s regulations allow natural gas prices to climb much higher before gas loses its competitive advantage for generating electricity. That raises the ceiling on what consumers will pay for electricity.
With these findings, the administration can no longer wash its hands of the pain it has inflicted on the nation’s coal fields. Nor can Congress claim it is powerless to help the industry and its workers.
On the contrary, two actions by the new president and the new Congress can slow the hemorrhaging of good jobs.
First, stop implementation of the Clean Power Plan, EPA’s newest regulation on power plants that is forecast to close another 53,000 megawatts of affordable coal-based electricity. Second and equally important, use all of our abundant energy sources — from coal to wind.
Let’s let consumers and the market determine which fuels to use and when to use them, not Washington’s regulators. If Washington can’t always prevent unemployment, it shouldn’t be the cause of it.
Luke Popovich is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.