President Obama has broken many promises during his first and second terms in office. But, in a sad twist of irony for taxpayers and energy production, the president is intent on keeping one of his 2008 campaign promises, to bankrupt coal plants and force electricity prices to “necessarily skyrocket.” After legislative attempts to pass cap-and-trade failed in the Democrat-controlled Congress in 2009, the president made clear that “cap-and-trade was just one way to skin the cat.” The other way: have unelected bureaucrats and attorneys at the Environmental Protection Agency (EPA) regulate coal out of business.
The EPA has since taken measures to stop coal plant production by requiring new plants to use cost-prohibitive carbon capture and storage (CCS) technology – tech that is only affordable with large taxpayer subsidies. The only plant currently under construction with CCS will receive $400 million in grants and federal tax credits to offset the more than $1 billion price tag for what is unproven technology. That model is unsustainable.
Now, the EPA is working on round two of its regulatory assault, which “would put limits on carbon dioxide emissions from existing coal-fired power plants.” Already, the Department of Energy estimates that EPA’s earlier power plant rule could force several hundred coal-powered electricity plants to close. The result: 32 million households would find themselves without a reliable source of energy production. By 2025, the situation will become more dire as nearly all coal plants will be forced out of business, robbing 33 states of 44,000 megawatts of electricity.
Winter 2013/14: A Warning Sign
This past winter has been particularly severe, with much of the country experiencing below-normal temperatures and harsh weather that spiked demand for energy used to heat homes. The price of natural gas, the primary alternative to coal, spiked 76 percent in some regions of the country.
Meanwhile, the reaction of the energy grid to this weather shock has Philip Moeller, a commissioner with the Federal Energy Regulatory Commission, concerned. Mr. Moeller testified in an April hearing that: “Our latest winter exposed an increasingly fragile balance of supply and demand in many areas. Prices at times were extraordinarily high [and] consumers are now beginning to receive utility bills that in some cases are reportedly several times what they paid during similar periods in previous years. The experience of this winter strongly suggests that parts of the nation’s bulk power system are in a more precarious situation than I had feared in years past.”
Not only that, but Moeller cites inconsistent numbers and information as a reason for holding off on eliminating coal plants. Hoping for mild weather, he notes, “is not a sound basis of planning.”
Europe’s Lessons for U.S. Policymakers
And while the Obama Administration doubles down on its anti-coal agenda, Russia’s recent aggression in Ukraine is causing Europe to reconsider its dependence on Russian gas and renewable fuels. The region is increasingly turning to U.S. coal to strategically offset dependence on Putin’s gas.
If President Obama’s failed energy policies continue to take hold, the U.S. can see its future in Europe. Inefficient and ineffective green energy subsidies in Germany added 50 percent to German power costs as compared with the rest of the EU. Meanwhile, the country has killed off other ways to produce energy – such as nuclear plants. Now, the country is left scrambling without a cost effective domestic energy supply.
That is the path towards higher energy prices, fewer jobs and overall energy instability that the United States is heading down – thanks to an administration that is intent on bankrupting the coal industry.