Obama's War on Coal: Political Spin Or Reality?

September 22, 2012

During this election year, pro-coal anti-Obama billboards, rallies and ads are popping up in coal states like Pennsylvania and West Virginia. The United Mine Workers of America, Republicans and others blame the Obama administration for regulations they say are shuttering existing coal-fired power plants and scaring off investors in future facilities. But some say coal's evolving story is a lot more complicated. 

The Rocky Grove Fire Hall in Franklin, Pennsylvania is buzzing with people on a mission. Carol Mulrey organized this evening's political rally with six of her friends. She says President Obama is waging a war on her coal-dependent community and he has to go.

"The current administration through the EPA is putting coal out of business," said Mulrey.

Mulrey's worried about Joy Global, one of Venango Countyís biggest employers.

"They make underground mining machinery and if there are no mines, guess what, there are no jobs in our area."

Joy Global has already laid off 200 people because of the slow economy. Mulrey thinks new EPA pollution standards unfairly target mining operations and coal-fired power plants and more jobs will be lost.

Across the hall, Gary Dubois, a longtime mining engineer, is selling lawn signs that say "Stop The War On Coal." He says Mr. Obama's EPA has overstepped its bounds.

"We have administrators, non-elected officials completely bypassing what our elected officials do and thatís to make laws so they're completely overreaching it, yeah," he said.

Dubois says his brisk multi-state sale of anti-Obama signs and T-shirts, indicates the frustration in hard-hit coal communities. Just this week, Alpha Natural Resources announced it will close mines in Pennsylvania, West Virginia, Virginia and cut more than a thousand jobs companywide.  It's all part of a strategy to shift business away from power plants to overseas steel mills. One official said they are making the move because of stiffer EPA regulations and a drop in the demand for coal.

Some of the biggest players in the coal industry and the GOP are financing aggressive efforts to defeat President Obama. The American Coalition for Clean Coal Electricity has spent about $12 million for pro-coal TV ads. Other groups are using the Internet.

Although the United Mine Workers of America disavows the "war on coal" anguage, the union -- which backed Mr. Obama in 2008 -- remains uncommitted this year according to Dan Kane, UMW's International Secretary-Treasurer.

"We did not endorse in 2012. It's primarily because of the regulations and the activities of the EPA. We can't mine coal if there's no place to burn it," he said.

The UMW estimates EPA's Mercury Rule that will go into effect in 2015 will put a quarter of a million coal and coal related jobs at risk - that's because, they say it will be too expensive to retrofit older coal burning plants. The Union also complains that EPA has made it nearly impossible to build new plants under a new greenhouse gas regulation. Dan Kane says to meet the CO2 emission standard, future coal-fired facilities would have to capture and bury their carbon.

"Whether or not that can be done commercially, it can't right now and it doesn't make sense for the EPA to require technology that isn't commercially available," he said.

But many US power companies have long planned to close some of their aging, inefficient coal-fired plants. The US Energy Information Administration or the EIA says one out of ten coal fired plants will shut down in the new few years. Allen Beamon, energy analyst with EIA, cautions that plant closings are complicated.

"When you talk about retiring a plant, it's really a complex decision. You're not just looking at any single factor. There's no single straw that breaks the camel's back. You're looking at coal prices, you're looking at electricity demand growth, you're looking at natural gas prices," he explained.

Electricity demand in many parts of the country is the lowest it's been in decades. And in the last four or five years, low natural gas prices - depressed by an abundance of shale gas, Beamon says, have rocked the US energy market.

"If you look over the last 50 or 60 years, coal power plants have accounted for nearly half of the generation in this country. But the economics have changed now with gas prices as low as they are today and with the efficient gas plants that are available."

For the first time ever, gas and coal are neck and neck as the fuel of choice for electricity generation. The US Environmental Protection Agency says economic factors like these have changed coal's position in the energy mix - not malicious intent to target a fossil fuel. The EPA would not talk on tape but said in an email to the Allegheny Front:

"Coal is still expected to generate more of America's electricity than any other fuel source. However, market conditions in the power sector are driving business decisions that are completely independent from these long-overdue pollution standards."

Back at the rally in Franklin, Pennsylvania, citizens want to scrap the agency. An audience member yelled out to the speaker amid applause:

"Could you tell me what the chances of getting rid of the EPA is? Is it possible?"

The speaker's response: "I think it all depends on November 6th."

Republicans in the US House of Representatives aren't taking any chances. This week, they introduced a package of bills to reduce EPA's regulatory reach. The White House has threatened to veto the bill if it makes it through Congress.