Daniel Kish is senior vice president for policy at the Institute for Energy Research.
When the Obama administration's Environmental Protection Agency released its new Mercury and Air Toxics Standards, or MATS, for coal-fired power plants in March, it received acclaim and praise from the usual anti-energy groups. The Natural Resources Defense Council claimed the rules were "economically prudent." The Center for American Progress proclaimed that it was a boost for "clean tech innovation and American competitiveness." The Clean Air Council insisted that the rules were "good for the economy and America's workforce."
But now, a group that usually can find no fault with anything President Obama prescribes is bailing on his plan to shut down the coal industry through back-door regulations. Unions for Jobs and the Environment recently submitted a letter to EPA claiming that the new rules would result in large-scale job loss, increased electricity prices, and a negligible health benefit to the American people. If unions are willing to jeopardize their favorable standing with the Obama administration over these rules, onlookers should recognize the severity of the situation. [Check out a roundup of political cartoons on energy policy.]
EPA initially claimed that these new regulations would force only about 10 gigawatts of the nation's approximately 340-gigawatt coal-fired fleet of power plants into early retirement. Unions for Jobs and the Environment points out, however, that subsequent studies have estimated that between 35 and 60 gigawatts of capacity will be forced to shutter. That means up to 17 percent of our nation's most affordable energy could be forced to shut down within the next three to five years to be replaced by more expensive plants.
Such shoddy math should not come as a surprise from EPA. Less than two months after releasing the new rules, EPA was forced to admit that it had miscalculated the amount of mercury being emitted from power plants by a multiple of 1,000. Maybe that is why the union group found that there is not one single operating coal-fired power plant that meets these new standards. Not only that—these rules make new plant construction so prohibitively costly that investors are steering clear of the industry.
The payoff, EPA tells us, is that thousands of jobs will be created through its regulatory avalanche. Of course, if regulations were really capable of creating long-term jobs, EPA should have made even more prohibitive and costly rules to induce even more job creation.
In reality, these new regulations will cause the exact opposite of what EPA claims—they will destroy the jobs of middle-class Americans at a time when our nation is starved for such employment. UJAE estimates that the MATS rules could destroy "more than 50,000 direct jobs in the coal, utility and rail industries, with a total job loss including indirect jobs of 251,300." [See the 10 best cities to find a job.]
There is a difference between reasonable regulations and regulations intended to shut down an industry. President Obama has made clear since his campaign for the presidency that his intention was to make the price of electricity "necessarily skyrocket" so that Americans would be forced to use less. When his cap-and-trade scheme failed in Congress, he claimed that it was only one way to "skin the cat" and that he'd be exploring more options to achieve the same goal. Cloaked in the veneer of protecting public health, the Obama administration is on a determined mission to shut down our nation's most affordable, reliable source of energy so that Americans are forced to pay more and use less.
The irony is that this mission would achieve the exact opposite of what President Obama claims. Access to affordable, reliable energy has propelled our nation to heights of prosperity never before experienced on earth. Americans live longer, healthier lives than ever due to the quality of life brought about by affordable energy. With increased energy prices would come increased costs for healthcare, transportation, construction, and virtually everything else in our economy. [Check out our new Energy Intelligence blog.]
When even the unions are turning on President Obama, it's clear that he is offering the American people a bad deal. If we are to remain competitive with the developing nations of the world, the president must end his crusade against affordable energy and instead embrace its ability to create jobs, lower prices, and spur economic growth.