Obama puts CAP on coal

IF THERE was not a “war on coal” before, there most certainly is now: US President Obama has taken his stance on climate change to the forefront by confirming new power plant emissions rules Tuesday that threatens to change the industry, and fairly quickly.
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Obama's energy policy is widely referred to as anti-coal.

Donna Schmidt

Bypassing Congress, which was to review the outlines, Obama spoke at Georgetown University to present his major climate strategy push that will result in significant changes both domestically and internationally.

The three-pronged strategy, presented as a 21-page “blueprint”, focuses on slicing domestic carbon emissions – which may likely result in staggering changes to US coal production and electricity generation – as well as upping investments in climate resilience measures and stepping up to a lead role in international climate change issues.

On the domestic front, the administration's Climate Action Plan includes an order to the US Environmental Protection Agency to “expeditiously” complete performance standards to lower carbon emissions from existing power plants and the finalizing of carbon limits rules for new facilities by September 20 of this year.

The EPA has also been directed to draft carbon limits for existing power plants by June of next year that will ultimately finalized in 2015.

The US Department of the Interior will work to permit renewable energy projects such as wind and solar facilities on public lands with the goal of powering 6 million homes by 2020 and install 100 megawatts of renewables on federally-assisted housing by the same time.

Obama has set a carbon pollution reduction goal of 3 billion metric tons, cumulatively, by 2030 – more than half of the nation’s carbon pollution level annually from energy – via new efficiency standards.

While coal is by far his biggest target, it is not his only one. Obama’s plan also includes fuel economy standards for heavy vehicles and trucks beginning with the 2018 model year and measures to reduce pollution from hydrofluorocarbons.

Internationally, the Administration has several measures planned as well. The most significant is a call to end US government support for public financing of new coal-fired power plants overseas. An exception will be made for facilities with carbon capture and sequestration, as well the world’s poorest countries where no other alternatives exist.

CAP also commits the US to expanding major new and existing international initiatives. These include bilateral agreements with China and India along with other emissions-heavy areas of the globe.

Again on the renewable front, the US will be working with trading partners to launch negotiations at the World Trade Organization, Obama said, for a global free trade in environmental goods to include wind turbines, solar panels and other clean energy technologies.

He also will be pushing federal agencies to support local climate-resilient investments and his CAP plan will feature a short-term task force to advise efforts.

“While no single step can reverse the effects of climate change, we have a moral obligation to future generations to leave them a planet that is not polluted and damaged,” the plan says.

“Through steady, responsible action to cut carbon pollution, we can protect our children's health and begin to slow the effects of climate change so that we leave behind a cleaner, more stable environment.”

The administration’s plan has the potential to send the coal industry, particularly in the US, into a tailspin – and have, at the very least, significant impacts on the market, jobs and how mining and electricity generation are performed at this time.

The nation has more than 1142 coal-fired plants and 3967 gas-fired plants across the country, with many coal-fired units transitioning to the latter.

About 37% of all of US electricity is generated from coal. Some states such as West Virginia rely almost totally on coal for electricity generation.

A swift and loud response

Calling it what it is – a renewed “war on coal”, many coal supporters were quick to respond to Obama’s plan, and the industry is planning a multi-million dollar push to tout coal’s benefits.

American Coalition for Clean Coal Electricity president and chief executive officer Robert “Mike” Duncan stressed coal power was necessary to meet future energy demands and was progressing as quickly as technology was evolving.

“We do not believe EPA regulations are an effective way to address concerns about global climate change,” he said.

“However, if EPA proceeds with regulations, they should be based on adequately demonstrated technology and provide an achievable timeframe to allow the coal industry to continue advancing clean coal technologies.

“If the government creates standards that are not practical, they risk not just shutting down existing plants but also halting the development of additional clean coal technology facilities. Taking America’s most significant source of electricity offline would have disastrous consequences for our nation’s economy.”

He noted that since 2011, 10 clean coal technology plants had begun operations and another five clean coal technology plants were either scheduled to come online or were under development.

All five use the integrated gasification combined cycle technology.

ACCCE’s Lisa Miller said Obama’s expected proposal was unworkable.

“Even brand new, state-of-the-art plants wouldn’t be able to meet these regulations,” she said, adding that the news was not a surprise.

“The industry for a long time has been expecting this,” she told one media outlet.

“We’ve got a really good sense of where people are on energy and coal specifically … in none of those conversations has there been any sentiment about what’s going to be coming from the administration.”

The National Mining Association focused on the impact the proposals will have on coal jobs, both directly and indirectly.

“Americans are looking for jobs and economic security … [and] coal power plants generate more electricity and create and sustain more jobs than any other energy source,” NMA president and CEO Hal Quinn said.

“So policies that shut off coal energy damage the nation's job and economic engine, while also raising costs to American consumers.”

He added that newly-built coal plants were best-in-class global leaders in generating efficient, clean, reliable and affordable electricity.

“Existing coal plants are being upgraded to be cleaner than ever before to supply reliable electricity that keeps our country growing and competitive.

“Our policies need to be aligned with our national interest so that coal continues to create jobs and keeps America competitive.”

Obama will likely make no friends on the Republican side of the Congressional table, as the outlines are expected to be met with stiff resistance from legislators as well as the business community at large.

Speaking candidly on the issue, as expected, was House Speaker John Boehner of Ohio.

“I think this is absolutely crazy,” he said.

“Why would you want to increase the cost of energy and kill American jobs at a time when the American people are still asking: ‘Where are the jobs?’.”

Kentucky senator Mitch McConnell had much to say to the President while on the Senate floor Tuesday morning, just hours before Obama’s remarks began.

“I read this morning that one of the White House’s climate advisors finally admitted something most of us have long suspected anyway … [h]e said ‘a war on coal is exactly what’s needed’ in this country,” he said.

“Exactly what’s needed – that’s really what he said.”

McConnell called the revelation an “astonishing bit of honesty” from the White House, but it just scratched the surface.

“But it really encapsulates the attitude this administration holds in regard to states like mine, where coal is such an important part of the economic well-being of so many middle-class families.

“And it captures the attitude it holds in regard to middle-class Americans across the country, where affordable energy is critical to the operation of so many companies and small businesses – and to those businesses’ ability to hire Americans and help build a ladder to the middle class for their families.

“Declaring a ‘war on coal’ is tantamount to declaring a war on jobs. It’s tantamount to kicking the ladder out from beneath the feet of many Americans struggling in today’s economy.”

McConnell said if the White House moved ahead with this “war” on jobs and raised the cost of energy, it would almost certainly raise the cost of doing business – and that would likely put jobs, growth, and the future of American manufacturing at risk.

“He [Obama] cannot declare a war on jobs and simultaneously claim to care about manufacturing,” the Kentucky senator said.

“And he cannot claim to care about states like mine, where an energy tax would do great damage to the countless Americans employed in energy sectors like coal.

“This is the reality of the Obama economy. Even in the best of times, imposing an energy tax would be a bad idea. But in an era of unacceptably high unemployment – an era when Americans are desperate for the president to finally focus on growing the middle class, rather than throwing scraps to his wealthy supporters – ideas like this border on the self-defeatingly absurd.”

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