President Obama talks a good game on American exports, but his goal to double them by the end of the decade won’t amount to much if he doesn’t get his EPA out of the way. Right now, in the Pacific Northwest, the private sector is ready to put shovels in the ground and more than double the nation’s coal exports. Coal output in the Powder River Basin in Wyoming and Montana is increasing, and companies are trying to build export terminals to link increased domestic supply with burgeoning demand for electricity generation in China. This is the way the global energy market is supposed to work, and American workers and the economy will benefit when abundant American coal is sold to overseas buyers. That is, only if the federal government will let it happen.
These attempts at economic activity are colliding with the comprehensive effort at the EPA to end the American coal industry. Recently, two of the most onerous regulations in American history have landed squarely on the shoulders of coal workers and businesses. The Utility MACT rule all but outlaws the construction of new coal-fired power plants, and the EPA’s greenhouse gas regulations are poised to move against existing plants.
The problem with environmental regulations is that they often create “leakage,” meaning if the government won’t allow a company to do business in the U.S., the company will just take its activity overseas. The supposed global environmental improvement never occurs, but the U.S. economy suffers as output falls and job growth fails to materialize. It happened with the Keystone Pipeline now that the Canadians are moving to sell their oil to China after President Obama refused to permit the pipeline here; it’s happening in the coal industry right now too.
All across the Pacific Northwest companies are eager to bring jobs and economic development while they build the ports necessary to more than double U.S. coal exports. From Cherry Point in Bellingham, Washington; to the Port of Morrow in Boardman, Oregon; to the Port of Coos Bay in Southern Oregon, the entire region is poised to spring back to life. A recent estimate from ECONorthwest found that the Port of Morrow project alone would create more than 3,700 jobs and generate $400 million in economic output. Oregon and Washington both badly need the jobs, with unemployment rates over 8 percent, two of the worst in the nation.
Even though they’re well on their way to ending coal in the U.S., environmental pressure groups aren’t satisfied; they want to block the export terminals and stop the coal from going overseas. They recently came together in a coordinated campaign to influence the Army Corp of Engineers (the Corps), the federal body tasked with signing off on a critical aspect of the permitting process. In a flurry of letters in little more than a week, Obama’s EPA, Oregon Governor John Kitzhaber and a cabal of eight environmental groups, including Earthjustice and Greenpeace, kicked off their efforts to block the coal from adding to our nation’s exports.
The preplanned message campaign from all three groups was clear: More red tape is needed before we can put anyone back to work. But as is often the case, these campaigns aren’t about studies; they’re about stopping economic activity altogether by tying it up indefinitely in red tape. The Corps is already conducting an environmental impact statement (EIS) on the projects consistent with the National Environmental Policy Act, which will then be used to advise the permitting process. Officials at the Port of Morrow have made clear that every stage of the coal transportation process will occur under covered rail cars, covered conveyor belts, covered barges and enclosed transfer systems — all smart measures designed to protect the environment.
However, looking at the careful environmental stewardship of the individual projects isn’t enough for the pressure groups. They want another layer of red tape on top of the normal process that would include calculating the climate change impacts of burning coal in China and assessments of how the coal will slow down their plans to force the nation to accept high-cost, undependable so-called green energy. In other words, even though the people’s representatives in Congress have repeatedly rejected a comprehensive climate law, well-paying jobs and increased exports must be held hostage to the pressure groups’ climate change concerns.
Earthjustice was clear: If the Corps doesn’t do what they want, they can always just turn to their friends at the EPA, noting that the EPA can just “veto Corps permits that present unacceptable environmental impacts.” The extreme group has a history of working hand-in-hand with the agency using a “sue-and-settle” strategy to enforce their vision. This series of letters and threats is only the beginning of their multi-stage project to make sure the coal never leaves our shores.
This is a crystal clear case of unnecessary red tape holding back economic growth and development. The Army Corp of Engineers should conduct the necessary traditional review and move the permits forward so the economy can get moving again.
Mr. Phillips is the president of Americans for Prosperity, the nation’s pre-eminent free market grassroots organization. It has had full-time staff in Washington State since January 2010.