Last updated on 2013.06.27
Reporter Bob Mercer blames the Obama Administration for killing coal-fired electricity plants. Mercer apparently only reads corporate press releases. As I have previously reported on both the NextGen coal-fired plant near Selby that Basin Electric canceled in 2010 and the Big Stone II plant near Big Stone City that floundered in 2009, it's the market, not Obama or the EPA, that is the main reason investors are running from coal.
The global recession caused a decline in energy demand. Utilities are mothballing existing coal plants because natural gas-fired plants are cheaper and cleaner to operate. Tougher environmental rules are helping drive that switch (and should we complain about rules that mean cleaner air for all of us?), but so is fracking, which is sustaining the natural gas glut even as the number of gas-drilling rigs declines (ah, efficiency). Renewable energy is picking up the slack as well, as investors see that wind and solar have more of a future than coal:
Installed wind and solar have doubled in the U.S. since Obama took office. Costs for solar are plunging like crazy and onshore wind power may be competitive with fossil fuels without subsidies by 2016. The National Renewable Energy Laboratory says the U.S. could get 80 percent of its power from renewables by 2050. Given that "official" projections of renewable energy growth have been consistently beneath the mark, it's not unreasonable to think we may be underestimating future growth [David Roberts, "U.S. Leads the World in Cutting CO2 Emissions — So Why Aren't We Talking About It?," Grist, July 17, 2012].
Economic geologist Alan Stagg agrees with Mercer that the Obama Administration doesn't favor coal. However, in this discussion of the declining Appalachian coal economy, Stagg agrees with me that markets, not Obama, are the real reason for coal's doldrums:
"You've got coal-fired power plants that are closing. Some have been on the board for five years or more to be closed. They're old, they're inefficient. It was no secret," he said.
The extended global and U.S. economic downturn has reduced demand for coal, he continued. Power producers have been lured to cheap natural gas.
And most fundamentally, in Central Appalachia, a century of mining has left thin seams of coal in small blocks that cost more to mine than other coal.
"And by the way, yes, in my opinion, the Obama administration is against coal, and the Environmental Protection Agency has overstepped its bounds and the courts have pulled them back in," he said. "But is that what's caused the coal industry to be in the shape it's in? No. It's about markets."
Stagg is irked when those who are in a position to educate the public and help plan for the decline of Appalachian coal use its decline instead for political gain.
While politicians, coal associations and other cheerleaders of the industry say regulations need to be rolled back in order to bring back Appalachian coal production, he said, "my point is, some of this stuff is structural and it's not going to come back [Pam Casey, "Expert: Central Appalachian Coal Still Will Be Mined for Decades," Charleston State Journal, October 19, 2012].
Even if Bob Mercer could legitimately blame President Obama and the EPA for shutting down NextGen and Big Stone II, he would still lose the argument by failing to tell us how a few hundred temporary jobs, a few dozen permanent jobs, and hundreds of millions of dollars in tax revenue outweigh the billions in dollars in health costs from coal pollution that we can avoid by using cleaner energy sources. Read more on the full costs of coal here, here, and here, and you'll see that we can beat Mercer and other fossil-fuel jobs-üer-alles apologists by showing that regulating coal out of business may be a good thing.
But we don't have to go there, because President Obama isn't regulating coal out of business. His EPA's sensible clean-air regulations are barely thin gravy on the plate of market forces and technological reasons coal is losing ground.
Big Stone II was is rough shape long before Obama came into office. It may have been the final nail in the coffin but the Minnesota equivalent to the PUC was the first 27 nails.
I'll concede that the EPA (enforcing coal regulations that were passed under H.W. Bush), hasn't been great for the coal industry. But ultimately the big factor has been natural gas. Many coal plants are old, out of date and in need of updating. Add in that you have to ship coal in, (on rail) and the republicans are dead against rail, you can see why many coal plants are closing.
The other thing about coal plants. And an energy guy told me. When it comes to natural gas and renewable energy (wind and solar), it is much easier to project the price for a longer period of time. Where coal you have price of coal, shipping of coal, to factor in, which is way more volatile.
Not sure if straining for points to write about or political affiliation is behind some of those statements, but aside from some faulty cause-effect attributions about coal-fired generators, today's piece makes some other problematic statements about causes.
As regards the "loss of Tom Daschle," he claims that Daschle's finances could not withstand the scrutiny, The source of the problem was that Daschle's tax accountant made a false decision regarding the a free limousine service. Daschle paid the taxes when IRS ruled that he received economic benefit. The "cause" of Daschle's loss-to-the-state was in understanding that the SDGOP would fan the resentment of the idea of him riding around in a free limousine, betraying his loyalty to South Dakota, and that would interfere seriously from discharging the duties he would discharge as a cabinet secretary. The loss, if there is any, is clearly a matter of the climate created by his rabid enemies.
The National Science Foundation, which is run by a board of top national scientists, not by the President, withdrew its funding of the Homestake conversion when the state emphasized economic development over scientific research in the way it supported and promoted the project. The NSF decided to let the Department of Energy carry the project if it wished, because it is more aligned with any interests in economic development.
The state, not Obama, has in nearly all the cases cited in Mercer's article decided its status.
Yeah, the Big Stone II Plant was speculative to begin with. It didn't have a market for its energy when it was proposed, and the market for coal produced energy gradually eroded. Basing a monstrous coal-fired polluter a faulty, 1980s reading of the energy picture as the major reason plans for this plant collapsed. Mercenr forgot to mention the failure of Big Stone II as the death knell for wind energy, which of course was the scare tactic being used to keep this dinosaur alive. Mercer must not have gotten that pr memo.
Add this to the cost- benefit analysis not conducted by Mr. Mercer in his coal cheerleading: one coal plant in Michigan may cause 44 deaths, 72 heart attacks, and 700 asthma attacks among folks living nearby each year. Let's see... how long does that cost take to eat up the benefits Mr. Mercer cites?
Don't forget, it wasn't that long ago, California's power running on nat gas in the Arizona desert had power rates so high they were trying to get the Feds to let them steal our WAPA power.
Pickens claims nat gas is forever, I don't believe anything is forever. My forever=next ten to twenty years.
We need coal to get from here to the next gen.
Btw, get to work on clean coal for china while we are at it.
Why would journos like Mercer suppress increases in Obama-driven job numbers in South Dakota?
Jihong Cole-Dai: Greenland ice cores detailing climate change at SDSU.
http://www.livescience.com/25346-greenland-ice-cores-acid-atmosphere.html?cid=dlvr.it