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Ban Natural Gas! No, Ban Coal!
Market forces, not government meddling, lead to efficiency.

President Obama and EPA administrator Lisa P. Jackson

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Robert Bryce

Mark Twain once said that “history doesn’t repeat itself, but it does rhyme.”

Twain wasn’t talking about energy, but his line applies to the EPA’s proposed prohibition on the construction of coal-fired electricity generators. Indeed, we need only look back a few decades to see how the EPA’s misbegotten rule rhymes with what Congress did back in 1978 when it banned the use of natural gas for electricity production.

Yes, you read that right. In 1978, Congress passed the Powerplant and Industrial Fuel Use Act, which prohibited the use of natural gas for electricity generation. Given the surfeit of natural gas now available to American consumers, it’s hard to imagine a time when natural-gas shortages were common. But during the mid- and late-1970s, shortages were a frequent occurrence. Those shortages weren’t caused by a lack of gas resources. As we now know, America sits atop galaxies of the fuel. Instead, the shortages were caused by a briar patch of federal regulations that hampered the development of interstate markets for natural gas.

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Nevertheless, political leaders were convinced that a crisis was at hand. And the solution was, wait for it . . . more coal-fired power plants. Indeed, coal was so popular that in April 1977, President Jimmy Carter delivered a televised address to the nation about the “energy crisis” that was gripping the nation. Carter said the U.S., and the rest of the world, was running out of oil and gas, and he declared that “too few” domestic electric utilities “have switched to coal, our most abundant energy source.”

There’s no small amount of irony in the fact that the EPA — which is pushing a phalanx of new regulations on air quality, coal-ash disposal, and other measures — is now trying to shut down some of the very same coal-fired power plants that were built in the 1970s and 1980s as a direct result of the congressional ban on natural-gas-fired electricity production.

In 1987, Congress reversed course and repealed the Powerplant and Industrial Fuel Use Act. Although the law was in effect for less than a decade, it distorted the power sector for years to come. In 1978, natural gas was generating 13.8 percent of U.S. electricity. By 1988 — a decade after the Powerplant and Industrial Fuel Use Act was passed — natural gas’s share of the U.S. electricity business had fallen to a modern low of just 9.3 percent. By contrast, between 1978 and 1988, coal’s share of the U.S. electricity generation market soared, going from 44.2 percent to 56.9 percent, the highest level of the modern era.

Congress’s misbegotten effort to ban the use of natural gas for electricity production sounds a lot like the EPA’s proposal to prohibit the construction of new coal-fired plants for generating electricity. The difference, according to the EPA, is that we are now facing a new crisis: climate change. The agency claims the ban on coal plants is needed because greenhouse gases “endanger both the public health and the public welfare of current and future generations.”

The EPA and President Obama like to pay lip service to the issue of climate change, but three additional points underscore why the EPA’s proposed rule (public comments on the measure will be taken until June 12) makes no sense.



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