But let’s not get ahead of ourselves. Despite appearances, this bounty is not welcomed by all. While it’s certainly good news to American manufacturers and their employees, to the record number of jobless across the country, to frustrated Americans who’ve dropped out of the labor force, to cities and states hungry for revenue and to consumers happy to buy “made in America,” it is not good news for environmental regulators in the administration. That’s because this spectacular good fortune is the result of fossil fuel, and the Environmental Protection Agency (EPA), as well as their activist allies, don’t like fossil fuels. They question the value of high-wage jobs, competitive industries, fiscal solvency and the other blessings that are purchased with it.
In fact, the same week the president highlighted the plight of a shrinking middle class and falling wages, and pleaded with Congress to increase the minimum wage and extend unemployment benefits, his biggest regulatory agency effectively banned future coal-fueled generation with a new greenhouse gas regulation. Soon EPA will go after existing coal plants. So an industry saddled with punitive regulations that has already lost 30,000 good jobs and about 37 gigawatts of capacity within the past two years is about to get more of them.
If you don’t live in Washington, you might think to yourself: good grief. Hasn’t the president repeatedly called attention to the growing “wealth gap” and the need to create good jobs to close it? Hasn’t he just announced enterprise zones in places like southeastern Kentucky where his administration will target policies designed to lift lagging employment from a declining coal industry? Are EPA officials asleep or playing Angry Birds in all those cabinet meetings and congressional hearings when job creation is proclaimed to be Washington’s No. 1 bipartisan goal?
This is what happens when an environmental agency makes energy policy. You wouldn’t take your car for repair at a hair salon, but here in Washington we turn over the nation’s baseload power supply to bureaucrats who oppose the energy source that generates the largest portion of it. Sure, these are clever people; some were even class presidents. But they’re the same people who didn’t see the shale gas boom heard round the world. Now they feel confident enough to insist we don’t need new coal-based capacity, that natural gas can handle electricity generation, and at prices we all can afford. Maybe. But the question is, why take the chance?
Already, the price of gas has more than doubled from its 2012 low. And with new markets here and abroad, natural gas prices could easily rise much closer to the world price — especially if supply peaks and regulators succeed in keeping gas in the ground as they have coal. Meanwhile, nuclear power, that other pillar of baseload power, is in a rut, struggling to stay price competitive. Its share of the power market is expected to decline in the next two decades. Coal and nuclear between them generate 71% of our electricity. With both on the wane, that could leave electricity vulnerable to price volatility, supply interruptions and the inevitable but unforeseen events that should make policymakers humble.
Seeing our baseload power system steaming straight into an iceberg, some in Congress want to change course. Sen. Joe Manchin (D-W.Va.) and Rep. Ed Whitfield (R-Ky.) are sounding the alarm, rallying bipartisan support in both Houses to require any greenhouse gas emissions standard for new power plants to be based on proven, commercially available technology. The agency’s current proposal, based on carbon capture technology, fails this obvious test for reasonable standard setting. “EPA is gambling on unproven technology and risking far higher electricity costs,” said National Mining Association CEO Hal Quinn last month. The Manchin-Whitfield bill would minimize this risk by reserving an important role for Congress when EPA moves to regulate emissions from the existing coal fleet.
Will enough Senate Democrats see the risky course EPA has set for baseload power? Stay tuned. But in the meantime, secure the lifeboats.
Luke Popovich is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.