Politics & Policy

Ban Natural Gas! No, Ban Coal!

Market forces, not government meddling, lead to efficiency.

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.

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In 1987, Congress reversed course and repealed the Powerplant and Industrial Fuel Use Act.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.

First among them: It prevents the U.S. from accessing a vital source of domestic energy. U.S. coal deposits contain nearly as much energy as the proved oil reserves of all twelve OPEC members combined. America’s coal deposits add up to the equivalent of 900 billion barrels of oil; that’s nearly as much as the 1 trillion barrels of proved oil reserves OPEC holds.

Second, the newest coal plants are clean by traditional EPA measures. For instance, the new 1,600-megawatt Prairie State Energy Campus, located in southern Illinois, will probably begin commercial operations within the next few months. The plant, which uses super-critical combustion technology to wring more electricity from the coal, will produce 0.182 pounds of sulfur dioxide and 0.07 pounds of nitrogen dioxide per megawatt-hour.

At that level, the facility will easily comply with the EPA’s Cross-State Air Pollution Rule, which is scheduled to take effect in 2014. That rule limits emissions to 0.30 pounds of sulfur dioxide and 0.17 pounds of nitrogen oxide per megawatt-hour.

For decades, the EPA has focused its air-quality efforts on what are known as “criteria pollutants.” The Clean Air Act requires the EPA to set standards on six components: ozone, particulate matter, carbon monoxide, nitrogen oxides, sulfur dioxide, and lead. And over the past three decades, EPA data show dramatic reductions in those criteria pollutants even though population and energy consumption have both increased. The newest coal plants will help these trends continue.

Finally, prohibiting construction of new coal-fired generation units will have no discernible effect on achieving the EPA’s stated purpose of reducing global carbon-dioxide emissions, which have increased by about 28 percent over the past decade even as U.S. emissions have fallen.

The reason that global emissions are rising is simple: Demand for electricity is soaring. Between 1990 and 2010, global electricity production increased by about 450 terawatt-hours per year. That’s the equivalent of adding one Brazil (which used 485 terawatt-hours of electricity in 2010) to the global electricity sector every year. And the International Energy Agency expects global electricity use to continue growing by about a Brazil per year through 2035.

American coal consumption is falling, down by about 5 percent over the last decade. But over that same time frame, global coal consumption soared by 47 percent, or the equivalent of 23 million barrels of oil per day. Put another way, over the past decade or so, global coal consumption increased by about the same amount as the growth in oil, natural gas, and nuclear combined.

When it comes to global carbon-dioxide emissions, America isn’t the problem. Instead, the U.S. — thanks to the tsunami of cheap natural gas now available by way of the shale revolution — is part of the solution.

On May 24, the International Energy Agency reported that U.S. carbon-dioxide emissions in 2011 fell by 92 million tons, or 1.7 percent compared with 2010, The IEA reports that “U.S. emissions have now fallen by 430 million tons (7.7 percent) since 2006, the largest reduction of all countries or regions.” The reasons for the reduction include lower oil use, the economic downturn, “and a substantial shift from coal to gas in the power sector.”

Put another way, market forces (in the form of cheap natural gas), not carbon taxes, cap and trade, or anything else, have resulted in “the largest reduction of all countries or regions.”

To be clear, I’m all for natural gas. I’m also adamantly pro-nuclear. But it makes no sense for the U.S. to abandon coal, particularly given that a) new technologies are making coal-fired power plants cleaner and b) the rest of the world is continuing to burn gargantuan quantities of the fuel.

The Obama administration’s anti-coal stance may play well with the leftist environmental groups who are pushing their “beyond coal” agenda, but it is simply bad policy.

(For more, see my report for the Manhattan Institute, “Is There a Case for Coal?”)

— Robert Bryce is a senior fellow at the Manhattan Institute. His latest book is Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future.


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