‘The private sector is doing fine”? Among the many who’ll resent President Obama’s clueless remark Friday are those hit by his administration’s assaults on America’s employers.
Take Lisa Jackson’s “war on coal.” As Obama’s head of the Environmental Protection Agency, Jackson hasrelentlessly attacked our most plentiful energy source — at the cost of countless jobs, with more to come. (Maybe even Obama’s, more on that later.)
The“war on coal” is closing power plants and outraging miners whose livelihoods it threatens. More, it means price hikes for electricity — particularly in northern Ohio, a crucial state that broke for Obama in 2008.
Back then, union workers helped flip the state blue, reversing GOP wins in 2000 and 2004. This year, maybe not.
Last November, the EPA adopted new regulations on emissions that sounded a death knell for many of our country’s older coal-fired power plants. Already struggling to compete with cheap natural gas, owners of some facilities decided against investing in the pollution-control equipment needed to comply with the new regs.
Most recently, American Electric Power withdrew its application for a $1 billion retrofit of its Big Sandy plant in Kentucky; it now plans to shutter five of its 21 coal-fired facilities.Nationwide, some 100 of 500 coal-burning plants are slated for the slag heap.
Many closings will come in Ohio, where Akron-based FirstEnergy was first out of the box in announcing several planned shutdowns. It spent five years and $1.8 billion installing scrubbers on its largest plant located on the Ohio River; costly upgrades to the smaller units simply didn’t make sense.
The lost capacity will be replaced mainly by cheaper natural-gas plants, but the shift will require costly improvements to transmission facilities, expected to run more than a billion dollars in Ohio alone. Projected electric-rate hikesalarmed Ohio small businesses, which protested to the state’s Public Utility Commission.
Those concerns seem justified, based on the results of a recent auction conducted by regional-grid manager PJM, which annually contracts for excess capacity three years out. Thanks to the plant closings, the auction prices in northern Ohio soared to $357 per megawatt, versus $136 per megawatt in PJM’s total area.
These auction quotes don’t translate directly into retail prices, but they foretell the direction.
Nor was the November rule the EPA’s only assault on coal. The agency also recently imposed carbon-dioxide emission standards that could effectively prohibit any new coal-plant construction. That ruling almost guarantees the nation will continue to shift electricity production from coal to natural gas.
The current low price of gas is already tilting demand. In the first quarter, only 36 percent of our electricity production came from coal, down from 45 percent last year, with gas taking up most of the slack.
This determination to kill coal is short-sighted. There’s no guarantee that natural-gas prices will stay at today’s 10-year low. The shale boom has pushed them down, but soaring demand could eventually push prices higher. The appetite for natural gas as a transportation fuel for large truck fleets or for export, for example, is just getting rolling.
And (surprise!), now that natural gas is cheap, the same environmental groups behind the “war on coal” are now suddenly finding all sorts of (scientifically dubious) reasons to block natural-gas production.
America has a 250-year reserve of inexpensive coal — in energy terms, roughly the equivalent of the Saudis’ oil reserves. With the nation seeking to reassert itself as a manufacturing powerhouse, why deny access to cheap power?
The assault on coal is also risky for Obama. Ohio is a must-win for the president. State GOP chairman Bob Bennett notes that, for Vice President Joe Biden’s recent visit to the state, angry miners turned out spontaneously to protest the White House’s anti-coal policies — and “The GOP had nothing to do with that.”
With the EPA’s rulings likely to cost the state jobs and hike electric bills, he says, “Obama gives people more reasons to vote for [Mitt] Romney every day.”
Liz Peek is a columnist for The Fiscal Times.com and FoxNews.com.