A case in point is the “Clean Energy Standard” (CES). The CES would be a portfolio of “clean” fuels that power plants would be rewarded for using in electricity generation. The government would provide credits, i.e., cash or subsidies, for the use of renewable fuels and nuclear power and partial credit for less favored fuels, such as natural gas. Coal, arguably the nation’s most affordable and secure fuel, is effectively excluded despite generating almost half of U.S. electricity. In a CES the government, not the marketplace, would pick winners, essentially deciding which fuels are best and how electricity should be generated.
President Obama supported a CES in his March 30 “Blueprint for a Secure Energy Future,” and the Senate is now feeling out support for it. But a CES points us in the wrong direction. By putting government in the driver’s seat and putting coal out of the car, a CES will likely slow the development of more efficient and affordable electric power for American households and industry from secure and affordable resources.
Start with the most basic problem with a CES—it will raise costs, not lower them. The Energy Information Administration showed during April that states that use no coal pay more than three times the amount that coal states pay for electricity. Yet the very premise of introducing credits for renewable fuels is to make almost half of the nation’s electricity generated from coal more expensive. Depriving industry of affordable domestic energy while our global competitors nurture theirs and the jobs they sustain would be a dangerous step toward de-industrialization and decline.
Nor would a CES do much to lower greenhouse gas emissions blamed for climate change. The fuels favored by a CES for electricity generation—wind power, biomass and natural gas—offer negligible benefits at best. Recently, the “carbon neutrality” of biomass and natural gas has been called into question after studies found their lifecycle emissions result in no net benefit. Even if generous subsidies could boost wind’s share of the eastern power market to 20%, studies show U.S. carbon dioxide emissions would drop by only 4.5%.
Making renewable fuels more competitive by mandating their use is a costly option that is already bearing bitter fruit in a number of states. If government intervention is needed anywhere to increase renewable fuel use, it is to ensure the renewable energy industry has access to the domestic minerals and metals needed to build wind turbines and solar panels.
Would a CES somehow make up for its lack of economic and environmental benefits by strengthening U.S. energy independence? On the contrary, for a country rightly called the Saudi Arabia of coal, an energy policy that discourages the use of coal will make us less able to control our economic destiny. Particularly as advanced coal technologies are capable not only of achieving dramatic efficiency increases but also generating synthetic fuels that can boost our energy independence.
The U.S. needs all energy sources. But we don’t need to favor some fuels over others when our energy security and economic interests are clearly compromised in the process.
Hal Quinn is president and CEO of the National Mining Association.