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Commentary

Declare a Ceasefire in EPA’s War on Coal


     
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Before we become too optimistic about the prospects for using renewable energy sources to curb carbon emissions, it’s worth looking at a study commissioned by the U.S. Chamber of Commerce, which should give pause to even the most confident advocate of action against climate change.

The study forecasts that new EPA regulations—regulations intended to cut carbon emissions by 30% from coal-, oil- and natural gas-fired plants by 2030—will lead to higher energy costs, fewer jobs, and slower economic growth in the United States. That, in turn, will lower Americans’ standards of living. A typical household could lose up to $3,400 in disposable income annually by 2030.

With carbon emissions projected to rise 31% worldwide by 2030, the study estimates that EPA regulations would reduce emissions here at home by just 1.8%. In other words, American consumers—especially working people—and businesses will bear huge costs for trivial reductions in the U.S. contribution to “global warming.”

President Obama’s EPA is pushing to speed up the substitution of fossil fuels by “renewable” energy sources, such as the sun, the wind, the Earth’s own geothermal heat, and plant-based ethanol. But he and others who insist that those renewable energy sources can replace fossil fuels in generating electricity are engaged in economically costly wishful thinking.

Less than 4% of the nation’s electricity is produced by solar and wind power, despite tax credits and mandates in many states requiring their use. The bald truth is that, while solar and wind power can help satisfy peak demands for electricity, they simply are too undependable to provide “base-load” power and therefore can’t get us anywhere close, anytime soon to the goal of reducing greenhouse gas emissions significantly.

Reaching that goal and meeting a growing demand for power requires new electricity generating capacity to replace aging power plants with low-carbon energy sources, the most cost-effective of those now being natural gas, nuclear power, energy-efficiency improvements, and advanced coal combustion technologies. One such technology—ultra-supercritical pulverized coal plants—can burn coal as much as 30% more efficiently than conventional coal plants and therefore cut carbon emissions significantly. Unlike the “green” alternatives, that technology is proven on a commercially viable scale: power plants of that design already are producing electricity in the United States and Europe.

Yet EPA has proposed two regulations on new construction and upgrades of existing power plants that are designed to dramatically reduce the use of coal, which generates 40% of the nation’s electricity. The agency’s forthcoming restriction on carbon emissions actually would block the construction of coal plants using advanced, environmentally friendly coal-burning technologies.

Coal gasification, now up and running in Sasol, South Africa, transforms coal into everything from gasoline to other petrochemicals; the ashy byproduct of that process is used in farming.

The EPA is waging a ruthless war on coal, which will have untold adverse consequences for millions of Americans, especially those living in Appalachia and other economically depressed areas where coal historically has been the fuel of choice for generating electricity. Electricity prices will be forced up both there and nationwide.

At one time, the politics of coal was a contest between West Virginia, Pennsylvania, and other eastern states where coal is high in sulfur, versus the West, where the sulfur content of coal is far lower. Nowadays, the political contest pits fossil fuels against the sun and the wind, but is no less contentious. But Washington, not economics, still will determine the political winner.

China has just issued an order banning coal in Beijing by 2020. But our president is not an autocrat.

No matter how much he may want to go “green”, Mr. Obama should not ignore the market forces that will, left unimpeded, select the most cost-effective mix of energy sources and the best-available technologies for generating electricity. His job is to promote the general welfare and not the special interests of bureaucrats or other groups that lobby for government handouts to finance electricity production by demonstrably inefficient means.

Perhaps Mr. Obama should ask Secretary of State John Kerry to negotiate a truce.


William F. Shughart II is a Research Director and Senior Fellow at The Independent Institute, J. Fish Smith Professor in Public Choice in the Jon M. Huntsman School of Business at Utah State University, and editor of the Independent Institute book, Taxing Choice: The Predatory Politics of Fiscal Discrimination.

Taxing ChoiceFrom William F. Shughart II
TAXING CHOICE: The Predatory Politics of Fiscal Discrimination
So-called “sin taxes”—the taxing of certain products, like alcohol and tobacco, that are deemed to be “politically incorrect”—have long been a favorite way for politicians to fund programs benefiting special interest groups. But this concept has been applied to such “sinful” products as soft drinks, margarine, telephone calls, airline tickets, and even fishing gear. What is the true record of this selective, often punitive, approach to taxation? Learn More »»






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