The Visibility, the Utility MACT, the Coal Combustion Residuals, and other rules in the EPA’s regulatory bouquet are ostensibly about public health, but their coalescence at this particular moment is enough to inspire justified suspicion that, really, they are a subterfuge to take coal-fired generators offline or, at least, make it much more expensive to use coal to produce electricity. Indeed, Steven Chu, before he became energy secretary, declared that “coal is my worst nightmare.”
Greens have long been annoyed that coal and coal-fired electricity are so cheap, and that renewable forms of energy are so expensive. Renewables already are made artificially cheaper through mandates to buy green energy such as the Renewable Portfolio Standards, which 29 states have adopted, as well as direct subsidies such as the federal Production Tax Credit for Renewable Energy, which pays producers $22 per megawatt-hour of green energy (regardless of whether it is delivered at a peak-demand time on a hot summer afternoon, or in the dead of night).
Even with the mandates and subsidies, renewables in many places are not competitive. So has come a push to make conventional forms of generation more expensive. Greens have long argued that coal-generated electricity would not be cheap if only all of the negative externalities were reflected in the price the end-user pays for electricity or manufactured products. That’s a difficult thing to bring about, of course, because when you push up prices of electricity, a particular energy-using process merely will migrate to locales where externalities are still external and energy is cheaper. These rules certainly will certainly abet that trend.
The fate of the rules is unclear. There is reason to believe some will be delayed, or never implemented, because of fierce political opposition in swing states such as Ohio, Indiana, and Pennsylvania, home to large coal fleets. But more than being a sword of Damocles hanging over the heads of utilities with existing coal plants, the rules are an embodiment of regulatory uncertainty, rightly a watchword of our ailing economy. The mere threat of the rules has rendered nearly impossible the construction of new coal plants in the United States. Ironically, this keeps older and dirtier coal plants online and suspends many investments. Society is kept in limbo, courtesy of the EPA.
If the EPA is going to kill off the industry, then it ought to dispense with the tortuous waiting game and just get it over with. The status quo is the worst of both worlds. Industry is paralyzed and, meanwhile, plans for what to do with the clean, low-sulfur coal deposits of the Powder River Basin, America’s most promising coal play, now revolve around exports to China, a nation every bit as determined as our EPA is ambivalent. In effect, the EPA is not lessening pollution in the world; it is merely exporting it, and our economy along with it.
– Mr. Kavulla, a former associate editor of National Review, is chairman of the Montana Public Service Commission, the state’s utility-regulating body.