Putting the kibosh on coal

How is it that U.S. coal exports to countries around the world are at their highest volumes since 1991, yet America is increasingly turning its back on its most abundant and affordable source of electricity?

According to a recent Associated Press report, coal’s share of the American energy portfolio has declined by about 20 percent over the last few years, but in just the last year, exports to South Korea jumped 81 percent and exports to Japan increased 119 percent. Exports to Brazil, China and several European countries also increased.

One coal company executive described it as a “global coal super cycle.” All around the world, countries are taking full advantage of market forces that make coal an attractive, cheap source of electricity.

But here in the United States, the Environmental Protection Agency is overriding those market forces with heavy-handed new regulations that are choking off new coal-fired electricity production at a substantial price for regional economies and consumers.

The regulations apply standards aimed at reducing greenhouse-gas emissions in such a fashion that it becomes virtually impossible to finance new coal-fired plants.

The worst part of it all is that the purpose of the regulations is to tackle global warming when, remember, countries around the globe are burning more coal than ever in far dirtier plants than any of those that currently exist in the U.S.

And there is a huge cost. As demand increases and supply is limited, electricity costs are skyrocketing in some parts of the country. And  higher costs for all forms of energy are like an immensely regressive  tax, affecting “the little guy” the most.

There is some good news in this picture. The regulations didn’t apply to existing coal-fired plants, because if they did, it would instantly cripple the energy industry with even higher economic costs because coal still fuels nearly 40 percent of domestic power generation. However, the new regulations do apply to any plant that makes improvements to increase production so the use of coal as a source of cheap domestic power is effectively stalled where it’s at. Also, supposedly even minor improvements at a plant trigger the new rules, thus forcing energy producers to limp along with old technology rather than face the wrath of the federal bureacracy.

Make no mistake: the Obama administration’s EPA made a political decision to go after greenhouse gas emissions as a pollutant. A Supreme Court decision determined that the agency was within its authority to regulate greenhouse gases, but the court did not direct it do so.

Another president could just as easily choose not to regulate greenhouse gases as a pollutant, and make it easier for the country to make use of its own affordable resources. Partly because of federal regulatory overreach which has obvious impacts on an already staggering economy, that day may soon come.