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EPA Tries to Destroy Coal Industry: Poor, Minorities Hardest Hit

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June 20, 2012 | 2,957 views | 4 comments

By Josiah Neeley

An old joke about liberal media bias goes that if the world were to end, the front page of the next day’s New York Times would read: “World Ends: Poor, Minorities Hardest Hit.” But in the case of the Obama Administration’s war on coal, most media seem unconcerned about the disproportionately negative consequences this will have on low-income Americans.

In March, the EPA announced new standards for greenhouse gas emissions for new or modified power plants. The new rules prevent construction of any new power plant that generates more than 1,000 pounds of carbon dioxide per megawatt of electricity produced. While natural gas and nuclear plants will be able to meet these new standards -- although the former just barely -- coal-fired power plants will not. As Slate’s Matt Yglesias noted, these new rules “will de facto make it impossible for conventional coal-fired facilities to get off the ground.”

The Administration’s antipathy to coal is nothing new. Four years ago, then-candidate Obama told the San Francisco Chronicle that under his cap-and-trade proposal, “if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.”

Once it became clear that cap-and-trade could not pass Congress, Obama shifted ground, telling reporters after the November 2010 elections that “cap-and-trade was just one way of skinning the cat; it was not the only way.”

EPA’s proposed rules also apply to existing plants that need to modify or expand their operation. That’s significant because several other EPA regulations in the pipeline aim directly at coal and could require modifications of existing plants.
By themselves, this unprecedented slew of regulations is expected to take a severe toll on coal-power. Add in the greenhouse gas regulations and the effect on coal-power generation could be devastating. Industry sources estimate that the greenhouse gas rules could threaten 25 percent of the existing coal-fired fleet.

Coal has been a useful villain for the Obama Administration and EPA, but the true victims of these regulations will be American consumers, particularly the poor.
Coal provides half of the base-load electrical generation in the United States. In some areas, as much as 90 percent of base-load electricity comes from coal.

Abrupt removal of so much generation would mean big increases in the price of electricity. Earlier this month, PJM Interconnection (which operates the electrical grid for 13 mid-Atlantic and Midwestern states) held its 2015 capacity auction. The market-clearing price for new 2015 capacity was eight times higher than the 2012 price, reflecting the impact of EPA’s new regulations.

That will hit our still fragile economy hard. And since the poor pay a disproportionate percentage of their income for energy, they will get hit the hardest.

Roger Bezdek of the Management Information Services has estimated that households earning less than $30,000 a year spent more than 20 percent of their after-tax income on energy in 2010, up from 14 percent in 2001. Households making more than $50,000 a year, by contrast, spend approximately 9 percent of their after-tax income on energy. Energy takes up more of low-income Americans’ budget than any other item except housing.

EPA’s regulations also threaten many working class Americans’ livelihoods.
In West Virginia and Kentucky, more than 40 percent of Democratic presidential primary voters chose a prison inmate and “uncommitted,” respectively, over Obama. West Virginia’s Democratic governor and Democratic junior senator declined to say whether they would support Obama in November. But given that coal is the backbone of these states’ economies, is it really surprising they aren’t fans of the Administration’s anti-coal agenda?

The Obama Administration claims to be particularly concerned about helping the least among us. It’s a pity their favored environmental policies end up doing precisely the opposite.

Josiah Neeley is a policy analyst for the Armstrong Center for Energy & the Environment at the Texas Public Policy Foundation.
« Previous Blog Entry (June 18, 2012)

Your Opinions and Comments

Gaius Julius Caesar  
June 23, 2012 6:25pm
Congres 'has not' given the EPA authority to enact harsh restrictions against the coal companies...that is Obama's EPA doing an end-run around Congress because Congress ... Read More Read More
La Vernia  
June 23, 2012 7:12am
It is a shame that CPS energy in San Antonio has to have coal trucked in by rail to operate when Texas has one of the cleanest burning largest natural gas deposits in the ... Read More Read More
florian schach  
June 20, 2012 12:51pm
While coal may be on its way out for some, its forced exit is going to be problematic for a number of communities. Coal still accounts for over 30% of energy in the US, making ... Read More Read More
Elaine K.  
June 20, 2012 11:47am
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