Politics & Policy

The Crony War on Coal

Natural-gas companies and environmental groups team up to kill affordable energy.

In June, the U.S. Senate voted, in effect, to shut down at least 35 gigawatts of electricity-generating capacity, 10 percent of America’s coal-fired power, by failing to overturn new mercury-emission rules for power plants. But even that’s nothing compared to what could well be President Obama’s most enduring, and senseless, legacy: the power-plant greenhouse-gas regulations, bought and paid for by the natural-gas industry, set to become permanent after the election, likely ending coal-fired electricity in America.

The American people, of course, decisively rejected Obama’s cap-and-trade plan (under which, Obama himself explained, “electricity rates would necessarily skyrocket”) in the legislative process in 2009 and at the ballot box in 2010. Undaunted, he said the day after that 2010 landslide election that “cap and trade was just one way of skinning the cat; it was not the only way. It was a means, not an end.”

The president’s new means are the greenhouse-gas rules for power plants. Those rules were created by transmogrifying the 1970 Clean Air Act into a global-warming, carbon-regulating law with the help of Massachusetts v. EPA, the 5–4 decision of an activist Supreme Court. They will eventually force every coal plant in the country to shut down or convert to natural gas — and the real scandal is that the main force behind the new rules is the natural-gas industry.

Like the mercury rule the Senate recently failed to stop, the greenhouse-gas rules were the product of Sierra Club litigation, this time via a consent decree between the EPA and the Sierra Club settling the latter’s lawsuit — amicably, I’m sure.

It’s no coincidence that the embattled CEO of natural-gas giant Chesapeake Energy, Aubrey McClendon, donated more than $25 million to the Sierra Club for its “Beyond Coal” campaign, which included the lawsuits that produced both the mercury rule and the greenhouse-gas rule.

Under the proposed greenhouse-gas rule, coal-fired power plants are instructed that, to comply with the new emissions standard of 1,000 pounds of carbon dioxide per megawatt-hour generated, they must convert to natural gas. Not nuclear. Not even wind and solar, which Obama claims to love. Just natural gas.

Recently, EPA Region 1 administrator Curt Spalding accidentally told the truth about the rule, to the effect that “basically gas plants are the performance standard, which means if you want to build a coal plant, you got a big problem.” He went on to explain the obvious implications for coal: “You can’t imagine how tough that was. Because you’ve got to remember if you go to West Virginia, Pennsylvania, and all those places, you have coal communities who depend on coal.”

Clearly, Spalding knows this will mean more than just banning new coal plants. The fate of coal communities is in play because the EPA fully intends to shut all coal plants down. The EPA’s friends at the Sierra Club made this clear back in December 2008, when they laid out their strategy for the newly elected Obama administration. After suggesting an even lower limit, 250 pounds of carbon dioxide per megawatt-hour, the Sierra Club wrote: “And then they could start thinking about how to deal with existing power plants under Section 111(d) of the Act. But one thing at a time.”

That section, 111(d), of the Clean Air Act would give green groups standing to sue to force regulation of existing sources, under rules supposedly — like the current Obama proposal — written only for new sources. So, if Obama’s greenhouse-gas rule stands, his allies at the Sierra Club may be able to force a future administration to mandate the retirement of all of the country’s coal plants via litigation.

The natural-gas industry, which has seen prices collapse as a consequence of the shale boom, sees this as an opportunity to kneecap a competitor and artificially boost demand for their product, increasing the price. As McClendon recently explained: “Sometimes you need to dislodge a boulder and let it start rolling” — that is, trigger demand by financing green groups to eliminate your reliable, affordable competition.

That said, the Sierra Club has in return shown little loyalty to its natural-gas benefactors. The sequel to their “Beyond Coal” campaign is called “Beyond Natural Gas,” and they promise to sue to block the permitting of every new natural-gas plant.

By attempting to effectively end the coal industry, a coalition of corporate special interests, green pressure groups, and bureaucrats have conspired to hijack the U.S. economy, pushing greenhouse-gas regulations without so much as a vote in Congress. One of the first orders of business for the new president and Congress next year must be to reverse these rules.

— Phil Kerpen is the president of American Commitment, which fights these rules at WarOnCoal.com, and the author of Democracy Denied.


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