Thomas Pyle is the president of the Institute for Energy Research.
The United States has the world's largest energy resources, in part because we have the world's largest coal reserves. In fact we have 50 percent more coal than Russia, the country with the next largest reserves. But coal use in the United States is under assault.
Before becoming president, Barack Obama promised to bankrupt coal companies. As president, he has tried various strategies to force Americans to use less coal. After failing to pass a national energy tax (cap-and-trade), the president vowed to continue his attack on coal stating that "cap-and-trade was just one way of skinning the cat; it was not the only way."
Instead of carbon dioxide regulations, the Obama administration is using multiple regulations to achieve the same end as cap-and-trade and shutting down coal-fired power plants. The Environmental Protection Agency is leading the charge against coal with a number of new regulations. Two of the most important are the "transport rule" and the "toxics rule" (otherwise known as Utility MACT).
Combined, these regulations will systematically reduce access to affordable and reliable energy. They will cost thousands of workers their jobs, require millions of consumers to pay more for electricity, and mean billions of dollars will have to be spent to build replacement power. At least they will fulfill the president's campaign pledge to make the cost of electricity "necessarily skyrocket."
According to a report the Institute for Energy Research recently released:
- EPA regulations will close at least 28 GW of generating capacity: EPA modeling and power-plant operator announcements show that EPA regulations will close at least 28 gigawatts (GW) of American generating capacity, the equivalent of closing every power plant in North Carolina or Indiana. Also, 28 GW is 8.9 percent of our total coal generating capacity.
- Current retirements almost twice as high as EPA predicted: EPA's power plant-level modeling projected that agency regulations would close 14.5 GW of generating capacity. That number rises to 28 GW when including additional announced retirements related to EPA rules, almost twice the amount EPA projected. Moreover, this number will grow as plant operators continue to release their EPA compliance plans.
- Announced and projected retirements higher than worst case scenarios: An analysis by the North American Electric Reliability Corporation, the entity in charge of grid reliability, projected that EPA's Transport Rule and Toxics Rule would close 20 GW of generating capacity. This list indicates that at least 28 GW will retire. EPA's Transport Rule and Toxics Rule push U.S. energy security past the Corporation worst case scenario.
- EPA's new regulations will hit states trying to get back on their feet: Current announcements and EPA projections indicate that EPA regulations have a dramatic impact on states reeling from economic hardship.
- Ohio: 2,894 MW retired, 8.6 percent of state total generating capacity.
- West Virginia: 2,448 MW retired, 14 percent of state total generating capacity.
- Indiana: 2,168 MW retired, 7.5 percent of state total generating capacity.
- Tennessee: 1,376 MW retired, 6.2 percent of state total generating capacity.
- Missouri: 1,325 MW retired, 6.3 percent of state total generating capacity.
- Wisconsin: 902 MW retired, 5 percent of state total generating capacity.
This is a cautionary tale. Air quality has dramatically increased over the past couple decades and air quality will continue to improve. But we have to ask if these new regulations go too far. We are enduring a very difficult time economically and these regulations will further increase the price of energy and make it more difficult to do business in the United States. This is no way to try to get the economy back on track.