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Coal industry under fire from market forces, new regulations

Energy policy and environmental regulations are shaping the future of domestic energy production, and a report from Politico suggests they are also damaging America’s vital coal industry.

Even though “cap and trade” legislation stalled in Congress in 2010, coal production faced increasing competition from alternative energy sources during the last decade. The Obama administration’s recently-announced “all in” energy policy, which seeks to find alternative energy resources while reducing the use of traditional fuels, is again heightening concerns about the vulnerability of the coal industry, which supplies the raw material to generate 45 percent of U.S. electricity.

“The EPA finds itself at the center of the controversy because of its new regulations for toxic emissions and ongoing plans to regulate greenhouse gases from power plants,” Politico writes. “The agency is also under scrutiny over how zealously it will regulate hydraulic fracturing of shale gas, a rising competitor for coal.”

Shale gas, a more recently discovered and relatively cheap alternative to coal, has been flooding the market and reducing coal prices.

The Energy Information Administration predicts coal’s market share will drop to 39 percent by 2035 due to government regulation and market forces. But some Republicans do not appear willing to let that happen without a fight.

The EPA’s agenda is to “drive coal-fired power plants out of America,” Kansas Republican Rep. Mike Pompeo said during an Energy and Commerce subcommittee hearing in late February.

West Virginia Republican Rep. David McKinley went further, accusing the EPA of waging a “war on the families and the miners and the communities.”

The Obama administration continues to emphasize the production of clean energy despite public scandals that have discredited several failed green energy companies. Solyndra, Ener1, and Beacon Power Corp. each received tens of millions of dollars in loan guarantees from the federal government before eventually filing for bankruptcy.

Through executive fiat, the administration has also passed limits on carbon emissions. Reuters reports the short-term impact of the rules is expected to be “symbolic” but notes that the policy could “set the stage for rules that take on such cuts.”

The EPA, meanwhile, maintains that the current state of coal production is the result of increased domestic competition and market forces — not increased regulation.

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