Tag: "Regulation EPA Electricity Energy"

The Troubling Murkiness of Sustainability

What does the phrase “sustainable development” mean to you? Your answer is particularly important, because our government is asking us to make many sacrifices to our personal freedoms in its name. We need to know if it is all worthwhile. Consider the following:

Where did this phrase originate? The United Nations World Commission on Environment and Development (also known as the Brundtland commission) first coined the phrase in a report published back in 1987, and it has since taken on a life of its own ever since.

The Environment Protection Agency (EPA) uses this definition: “Sustainability creates and maintains the conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic and other requirements of present and future generations.”

What is required for promoting sustainability? Setting aside the notion of “productive harmony” between humans and nature (whatever that means), finding the best way to fulfill the resource demands of both our present and future generations certainly sounds appealing.

Yet, based on the hue and cry for greater regulation over energy production and natural resource use in our economy, it appears that the voluntary interaction between people engaged in production and exchange in the private marketplace is an unsustainable system that has been found wanting.

Is there a better alternative than voluntary exchange? It is assumed by many that abandoning the marketplace and embracing a democratically designed regulatory process for allocating our nation’s resources will create a superior balance to this intergenerational tug-of-war over alternative resource uses.

However, in two earlier articles appearing in this blog, I give many reasons why we cannot presume that a centralized and involuntary approach toward managing our nation’s resources — even through a democratic process — will necessarily create a more sustainable outcome to the private marketplace.

Why? The same misalignment of incentives and imbalance of influence over resource use decisions that critics claim corrupt the market process are also quite prevalent in any democratic process that directs public resource use. But there are still other issues with relying on public policy to effectively deliver sustainable development.

What are the costs and benefits of sustainable development practices? Whenever the voluntary interactions between people are curtailed, they bear the lost benefits that could have been enjoyed by both parties had they been free to continue their activity. These costs are real and can only be revealed by those who willingly abandon this activity. Like the homeowner who relinquishes her house title to a buyer willing to pay the right price, the true value that is lost from this forgone activity is revealed only when a person receives sufficient payment to voluntarily stop the activity.

Even when market activities do not impose any burdens on third parties (like pollution), restricting human freedoms in the name of sustainability is usually justified by the claim that benefits need be preserved for future generations to enjoy. Yet, these benefits can only be accurately measured by those who voluntarily pay to preserve them for others to consume. Like the ratio of income that parents save for their children’s college education, the value of these future benefits is revealed only when each person voluntarily pays a price sufficient to acquire them for someone else.

This all implies that if our federal agencies claim to know the true costs that are borne by everyone who is forced to abandon their beneficial activities, or to know the true value of benefits that are funded by many people today but reserved for future generations to enjoy, then our democratic government suffers from a hubris that Friedrich von Hayek termed “the fatal conceit.”

Hayek understood that only the voluntary, decentralized interactions of millions of individuals in the marketplace can create the spontaneous and orderly outcomes that incorporate the greatest amount of cost and benefit information that could possibly be considered in order to create the best possible outcomes for the greatest number of people in society.

One of the reasons we value freedom so highly is that we instinctively know that nobody else can manage our own lives to produce as much joy as we can obtain by freely making our own decisions. Indeed, the concept of sustainable development has been applied with great rhetorical fervor to just about everything we find valuable in society — except the joy from exercising our personal liberty.

Which brings us back to our initial query: Is sustainable development — at least as it is being promised and delivered by our federal bureaucracy — worth the price that we are being asked to pay? How would you know?

Aug 20, 2014 | 1 comment | by

Heavy Ozone Regulation Hurts

A recent study by the National Association of Manufacturers found that the new ozone regulation from the Obama Administration could have a very high cost in jobs and to the economy. The NERA Economic Consulting report found that a stricter new ozone regulation could:

  • Reduce U.S. GDP by $270 billion per year and $3.4 trillion from 2017 to 2040.
  • Result in 2.9 million fewer jobs per year on average through 2040.
  • Cost the average U.S. household $1,570 per year.
  • Increase natural gas and electricity costs for manufacturers and households across the country.

New oil and natural gas production could be significantly restricted in parts of the country classified as “nonattainment” areas, limiting supplies of critical energy resources and potentially driving up costs for manufacturers and households.

The study found that restrictions to new natural gas production from tighter ozone regulations, in combination with the costs to reduce emissions, could:

  • Reduce the present value of GDP by nearly $4.5 trillion through 2040, result in a loss of 4.3 million job equivalents per year and cost households $2,040 annually.
  • Increase industrial natural gas costs by an average of 52 percent and electricity costs by an average of 23 percent over what they would be if the ozone standard was unchanged.

Heavy regulations like this one, cost too many jobs and wrecks the economy. Businesses will choose to go to other countries with friendlier business environments. Further negatively impacting our economy in the long run. We must look at the bigger picture and see the other side of the issue and understand that more harm than good is achieved through many existing regulations like this new one.

Aug 18, 2014 | 3 comments | by

The Challenge of Becoming a Green Nation (Part 2)

In my previous blog post, I critically examined our nation’s predisposition to view public policy, if formulated by a democratic process, as being sufficient for promoting the public interest in managing our nation’s energy economy. Abandoning decentralized, voluntary market transactions and embracing centralized, regulated energy resource allocations does not ensure a superior pathway for satisfying our nation’s long-run energy needs. Specifically, I noted that:

  • Competition over scarce energy resources exists, whether they are allocated in the private or public sectors.
  • Self-interest guides citizen choices in both the private and public sectors.
  • Power and influence were unequally distributed in both the public and private sectors.

These realities imply that there is plenty of room for inefficient development of energy resources to arise from poor public policy design. Further, we also need to understand the many challenges of implementing regulatory policy over our nation’s energy resources.

Observation #4: Critical knowledge for efficient and sustainable energy resource allocation is scarce and it tends to be concentrated in the same markets that the federal agencies are tasked with regulating.

This means that government agencies need to hire industry experts from the very markets that they try to regulate. Also, regulators from these agencies tend to be heavily recruited by special interest groups operating in the markets that are being regulated. With such cross-pollination of talent, there exist many opportunities for unequal influence to occur in the design and implementation of public policy which may not necessarily reflect the public interest.

An illustrative case is the recent announcement that the second highest EPA administrator resigned from his federal appointment to head a non-profit group that seeks to influence the EPA’s federal energy policy design and implementation. Whether we agree or disagree with this organization’s goals and objectives, it still illustrates how public policy is not insulated from the same concentration of influences that supposedly contaminate private sector resource decisions.

Observation #5: All of the costs surrounding any resource allocation decision must be fully paid, whether in the private or public sector. In the public sector, however, the benefits of public policy often do not accrue to those who bear these costs.

Most people understand how oil spills or auto exhaust emissions can impose negative spill-over costs on third parties. This often drives the call for greater regulatory intervention. Yet, few people recognize that similar cost externalities are often created when the government control over resource allocation decisions replaces the private, voluntary transactions in the marketplace.

For example, it is well-documented that food prices have risen ever since federal policy forced oil refineries to add ethanol (mostly made from corn) into our nation’s gasoline supply, in part to reduce fossil fuel consumption rates. When U.S. agricultural markets shifted 14% of its corn production away from food products, this moved the United Nations to ask the U.S. to lower its ethanol requirements to ease the impact of rising food prices on developing nations.

Observation #6: All the potential impacts from a resource allocation decision cannot be anticipated, even by the experts in a regulated market. The private sector has much more flexibility to adapt to these unforeseen impacts than the public sector and to send accurate signals of relative value in competing proposals for developing a resource.

By definition, private sector decisions are always voluntary and public sector decisions are always compulsory. Pursuing public policy to allocate energy resources replaces the potential of markets to find innovative solutions and forces the government to pick winners and losers in competing energy policy proposals. It also creates distorted price signals about competing plans for developing our nation’s energy resources.

Consider what transpires when the government imposes eminent domain upon a private landowner to facilitate a given energy policy. While the land owner is constitutionally assured a fair market price for the lost benefits for using the appropriated resource, we must remember that this same owner always had the opportunity to sell the resource at its market price, but preferred to not sell it. This means a voluntary sale would require a much higher price.

This reality implies that if the government were to acquire the needed resources to facilitate a given public policy through a voluntary market process, it would be far more expensive than simply imposing eminent domain. This makes it much more likely that the public policy in question would have been found inefficient, had it been forced to compensate the owners of all the needed resources for the full value of their lost benefits.

Andrew Morris (J.D., Ph.D.) is a law and economics specialist who serves as Senior Fellow at the Property & Environment Research Center. In a recent study he notes that,

Eminent domain laws are inadequate for coping with this growth in infrastructure, for protecting landowners’ rights in the face of expanding utility easements, and for giving utilities inappropriate price signals.

The bottom line is this: for all the concern that developing energy resources in the private sector would fail to reflect the public interest, there is no guarantee that public policy — even when designed and implemented in a democracy — would better reflect the public interest. We must dispassionately and carefully examine both public and private sector approaches to make an informed decision.

Aug 13, 2014 | Leave a Comment | by

Environmental Regulation through Litigation

Through sue and settle litigation, interest groups have forced the Environmental Protection Agency (EPA) to issue new regulations, often bypassing proper procedures.

How does this happen? Twenty U.S. statutes contain what are known as “citizen suit” provisions, allowing citizens to file suit against a federal agency when that agency has failed to carry out a nondiscretionary duty by its prescribed deadline. The Clean Air Act, the Clean Water Act and the Endangered Species Act, for example, allow for citizen suits. And because federal agency rulemaking is notoriously behind schedule, every missed deadline provides an opportunity for litigation. The EPA has been a party to a number of these lawsuits.

  • After environmental groups file a complaint against the EPA based on these missed deadlines, the parties work out a settlement or consent decree between themselves. This process allows regulation-friendly plaintiffs to work out a rulemaking plan with a federal agency without involving third parties.
  • Intervening in these cases is difficult, and affected parties are frequently unaware that a lawsuit has even been filed until an agreement has already been worked out.
  • From 2009 to 2012, the U.S. Chamber of Commerce puts the number of sue and settle lawsuits at 71, with the Sierra Club and WildEarth Guardians leading the way as plaintiffs in 34 and 20 cases, respectively. The EPA was a defendant in 60 of these cases.

Plaintiffs have used sue and settle with great success. However, the agreements are often procedurally deficient, and the deadlines to which the litigants agree often leave interested parties with insufficient time to comment effectively on the proposed rules:

  • After a lawsuit by the Environmental Defense Fund and the Sierra Club, among others, the EPA issued its Utility MACT rule, which regulates mercury emissions for power plants. The strict deadlines in the consent decree gave the EPA a very short period of time to assess public comments and issue a final rule, despite the complexity of the rulemaking. The regulation carries an annual cost of $9.6 billion, and it has forced many coal plants to shut down. At the end of 2012, 9.5 percent of coal-fired generation capacity had decided to retire due to Utility MACT, and 20.4 percent were undecided about whether to retire.
  • Environmental groups used sue and settle in five separate lawsuits to force EPA action on states’ Regional Haze plans. The Regional Haze program is intended to be a state program. But in multiple instances, the EPA imposed its own federal plan on states, rather than allowing the states time to correct and develop their own plans, because of the deadlines to which the agency had agreed in the consent decrees. Ratepayers in these states are facing extraordinarily high electricity costs as a result of these lawsuits.

Sue and settle is an attractive vehicle for regulation, because it is very difficult for states and industries to intervene in these lawsuits. Moreover, plaintiffs are often compensated for their attorneys’ fees, incentivizing litigation.

Aug 13, 2014 | Leave a Comment | by

The Challenging Process of Becoming a Green Nation (Part 1)

People often feel a little pious when they actively support regulatory efforts that subsidize the use of alternative energy sources. And why not? When politicians and environmentalists claim such regulations help alleviate our nation’s dependence on fossil fuels, reduce our air pollution emissions and decrease our contribution to global warming, what could possibly be wrong with supporting greater government control over the energy resources of our national economy?

Well, there is much to consider in the process of creating public policy. Let’s explore how environmental or energy policy would be crafted in any nation that is a representative democracy.

We’ll start with the most important question concerning energy sustainability and global warming: Who decides if the current rate of fossil fuel consumption is too reckless for a morally responsible generation to enjoy? Who decides the optimal level of carbon dioxide production for us all to tolerate when producing the energy and goods that the citizens of a prosperous nation require?

We must remember that making a democratic government the arbiter over these important questions doesn’t remove the inherent struggle that exists between the many competing visions of how our nation’s energy resources should be used. Handing the over the reins to the government merely changes the process by which these important decisions are made.

Observation #1: Our energy resources have multiple, competing uses — even across future generation. Such competition will always exist, whether decisions over using these resources are made in the public or the private sectors.

The presumption justifying greater regulation is that citizens in the private marketplace pursue only their self-interest when allocating their income dollars across competing energy resource uses. If the voluntary actions between buyers and sellers in the private energy marketplace fail to reflect the “better angels of our nature,” what’s wrong with electing politicians to hire expert bureaucrats to regulate our scarce energy resources more effectively?

Well, we must be consistent in our assumptions about human nature. These same citizens will also pursue their self-interest when they cast their ballots in the public sphere. When choosing between candidates for office with competing platforms, voters will not suddenly grow the halo and wings of angels when closing the curtain behind them in the polling booth. They will vote their own self-interest.

Observation #2: Self-interest guides citizen choices in both public and private decision making processes.

But isn’t citizen influence over resource allocation decisions made in the public sector more equitably distributed than in the private sector? Wouldn’t the “one-person, one-vote” characteristic of a democracy help us more equitably select the right legislators, who will in turn appoint the right bureaucrat experts, who will then create policies that are more likely to reflect the public interest?

In short, the answer is no. While people and organizations with higher incomes will always have more sway over what all is produced and how it is all distributed in the private sector, they will also have more sway over how public policy is created, and how its benefits (and costs) are distributed. Why? Much political influence resides beyond each citizen’s allocation of one vote. Let’s take a look.

Political action groups (PACs) seek soft money donations to promote political party platforms. Beltway lobbyists seek to influence legislators and bureaucrats on behalf of well-funded for-profit and non-profit organizations. Highly organized and informed special interest groups seek public policy with localized benefits that are to be paid for by uninformed and unorganized taxpayers.

Indeed, OpenSecrets.org tracks lobbying expenses and PAC donations in the U.S. each year. In the Presidential election year of 2012, over 12,000 lobbyists helped their organizations spend $3.3 billion trying to influence legislators and bureaucrats in their design of public policy. Further, PACs raised over $1.4 billion that same year, with Democrats raising a slightly larger share of all funds than Republicans.

Observation #3: Power and influence are unequally distributed in both the public and private sectors of a democratic nation.

The reality is this: If self-interest dominates citizen voter choices over competing energy policies, and if their influence over the legislative process is unequally distributed across society, then it does NOT automatically follow that public policy will be more economically efficient or environmentally effective than the aggregation of all the independent, voluntary activities between consumers and producers in the private sector.

This implies that the process of both private and public sector decision making in resource allocation must be clearly understood and directly compared before we can determine which process for allocating our energy resources would be in the best interests of our nation. In my next article, we will explore the challenges of efficiently and effectively implementing public policy over our energy resources.

Aug 06, 2014 | Leave a Comment | by

Has the EPA Hurt the Economy?

Last week, the EPA held public hearings on its “Clean Power Plan” proposal — a regulation that, unsurprisingly, sounds a lot better (who doesn’t want clean power?) than it actually is. The regulation won’t just cut greenhouse gas emissions from power plants (with a miniscule temperature impact of just 0.018 degrees Celsius by 2100), it will cut jobs while raising energy prices for families across the country.

Over at the Daily Signal, Nicholas Loris of the Heritage Foundation pointed out that EPA Administrator Gina McCarthy has written a post on the EPA’s website about the public hearings. According to McCarthy: “We expect great feedback at these sessions. And unfortunately, we also expect a healthy dose of the same tired, false and worn out criticism that commonsense EPA action is bad for the economy.” So, it’s simply false that EPA action hurts the economy. Want proof? McCarthy offered up some slam-dunk evidence: “Just look at our history: since EPA has existed we’ve cut air pollution by more than 70 percent, while GDP has tripled.”

If that’s the same type of analytical rigor that the EPA uses when churning out regulations, no wonder the agency continues to label job-killing restrictions that hike consumer prices “commonsense.”

Never mind that a Chamber of Commerce report projects $51 billion in annual economic losses from the Clean Power Plan rule through 2030 — not to mention 224,000 annual job losses.

  • Or that the EPA’s analysis predicting that its rule will cause job gains largely anticipates those gains because power plants will have to purchase renewable energy equipment thanks to the EPA rule.
  • Or that the EPA’s analyses of employment impacts routinely use flawed models that only partially assess economic costs.
  • Or that more than 34 gigawatts of electric generating capacity are retiring due to just two EPA regulations, costing jobs and raising energy costs along the way.
  • Or that a moderate projection from the National Association of Manufacturers finds that just six EPA regulatory proposals from 2010 and 2011 could cost 2 million jobs and $100 billion annually.
  • Or that its energy regulations disproportionately hurt the poor, who spend more of their incomes on energy.

And these are just a handful of recent EPA rules. To most readers, that might sound like the agency is not exactly helping the economy — in fact, that the agency is doing quite the opposite. But never mind all of that. Because, according to the agency, the fact that the United States has grown since the EPA’s inception must be evidence that the EPA has done nothing but promulgate commonsense regulations; certainly, it cannot be the case that the economy has grown in spite of them.

If you read any of the EPA’s regulatory impact analyses, you’ll see that their regulatory benefits are often those of job creation by regulation (i.e. their rules impose costs on one industry by requiring that industry to spend money, thereby spurring growth in another industry) — hardly a solid growth principle. If government-mandated expenses and restrictions created jobs and economic growth, we’d have regulated ourselves into prosperity quite effortlessly over the last six years.

McCarthy’s logic makes just as much sense as saying that you’ve eaten Oreos for lunch every day for the last week while maintaining a healthy weight — therefore, Oreos have clearly had no negative impact on your health.

The fact that growth has occurred in the face of overreaching regulations is hardly evidence that those regulations haven’t hurt the economy.

According to a study published in the Journal of Economic Growth last year, federal regulation from 1949 to 2005 has cost the American economy an average of 2 percentage points of growth. Altogether, by year-end 2011, regulations since 1949 had reduced American GDP by $38.8 trillion.

Aug 06, 2014 | Leave a Comment | by

Homeland Security/EPA Seize Family’s Land Rover

Department of Homeland Security agents were required to seize a family Land Rover for violating EPA emission standards. The imported Land Rover Defender is on a list of vehicles that are being illegally imported to the United States because they do not meet very strict emission standards.

  • All vehicles entering the U.S. must meet both very strict safety and emissions standards.
  • A list of vehicles are to be seized from their owners because apparently, the VIN number for their cars have different owners listed.
  • Owners of the seized vehicles have 35 days to appeal the seizure.
  • If all VIN numbers on the vehicle match, then the vehicle should be returned to the owner.
  • DHS agents in this case are not telling the owner of the Defender where the vehicle is located so that the VIN numbers can be checked.
Aug 04, 2014 | 2 comments | by

EPA, I Shall Call You Sybil

This week, President Obama is formally proposing a new EPA regulation to reduce greenhouse gas emissions by 30 percent from existing U.S. power plants by 2030. After many attempts at passing carbon cap and trade legislation through the Congress over the last decade have failed, the President is now taking unilateral action to directly regulate greenhouse gas emissions. How did we get here?

The EPA receives its power to regulate those economic activities that impose environmental impacts from air pollution through the Clean Air Act of 1990. In 2007, the U.S. Supreme Court ruled that the Environmental Protection Agency (EPA) had the ability to regulate greenhouse gas emissions, even though such emissions had not been considered air pollutants. However, this regulatory power was conditional on the EPA submitting an “endangerment finding,” in which a careful review of the existing science clearly indicates that greenhouse emissions directly endanger the health of Americans.

Marlo Lewis at the Competitive Enterprise Institute points out that section 202 of the Clean Air Act specifically requires the EPA to perform its own scientific assessment and to exercise its own independent judgment when finding evidence of endangering human health. This means the EPA cannot rely on the scientific assessment and judgment of outside organizations to find conclusive evidence of health endangerment to justify its regulatory powers.

The EPA entered its endangerment finding into the April, 2009 section of the Federal Register, which is the official log of all regulations proposed by federal agencies. However, this endangerment finding, and the EPA’s defense of this finding to its many critics, stretches the boundaries of logic.

Logical Inconsistency #1: Senator Jim Inhofe (R-Oklahoma) had a careful look at page 18,901 of the 2009 Federal Register. (BTW, does it bother anyone else that by April, the annual log book of proposed federal regulations had already reached over 18,000 pages?) Senator Inhofe is bothered by the fact that the EPA states:

To be clear, ambient concentrations of carbon dioxide and the other greenhouse gases, whether at current levels or at projected ambient levels under scenarios of high emissions growth over time, do not cause direct adverse health effects such as respiratory or toxic effects.

 The Senator sees this as a direct contradiction to the finding that greenhouse gas emissions endanger human health.

Logical Inconsistency #2:  Marlo Lewis points out that the U.S. Inspector General has issued a report that claims the EPA failed to perform its own scientific analysis to reach the conclusion that endangerment to human health existed. Page 23 of that report states that the EPA responded to this criticism by claiming that the documented analysis was “not a scientific assessment,” but merely a summary of findings by organizations, like the the recently discredited Intergovernmental Panel on Climate Change, or IPCC. This statement makes it appears the EPA simply relied upon other organizations for both the scientific assessment and the conclusion that greenhouse gas emissions directly threaten human health. Even the Inspector General feels that this endangerment finding fails to meet the requirements specified in the Clean Air Act.

Have greenhouse gas emissions been proven to be an endangerment to human health? I guess it depends on which EPA you are talking to… Sybil? Is that you?

Jul 09, 2014 | 4 comments | by

Fracking Provides a Safe and Environmentally Friendly Energy Source

As recently as a decade ago, many scientists believed the U.S. was running out of oil. Peak oil was a major concern and many questioned whether the U.S. way of life was at risk. Hydraulic fracturing (fracking), developed more than 60 years ago, has eliminated fears of running out of oil. Although fracking was impractical and very expensive when first developed, it has become more feasible in the last few years due to technological advancements and rising oil prices over the last decade, leading to an 800% increase in shale gas production over the last decade. Fracking has led to an economic resurgence in many places across the country. And while oil and gas has to be removed correctly, using gas collected by fracking reduces greenhouse gases more than burning coal.

But that is not enough for some environmental groups who see fracking as a dangerous detour on a path to 100% renewables. The Green Party has complained that fracking squanders water. While fracking does use water, the amount of water used to drill all 3,000 Marcellus wells in Pennsylvania (and obviously not all are being drilled at the same time) equals the amount of water used by residents of Pittsburg in one year. Additionally, fracking is using the water once consumed by shuttered industries such as steel manufacturing which have been offshored or curtailed by the EPA. In fact of the 9.5 billion gallons of water used daily in Pennsylvania, natural gas consumes 1.9 million gallons or two thousandths of one percent.

Others claim natural gas is dirty. Actually natural gas is much cleaner to burn than oil or gasoline. It emits half as much carbon dioxide, less than one third the sulfur oxides and one percent as much sulfur oxide as coal. While the fracking process does release some excess methane, a good portion can be prevented by sealing condensers, pipelines and wellheads.

Fracking will not cause water wells to blow-up as in did in the movie Gasland. In the movie, the Colorado home’s well was actually drilled directly into a naturally occurring pocket of methane. The drilling occurred before any fracking in the area. Hollywood is not in the business of fact checking. As long as companies use stronger cement and processing casings to ensure an impermeable seal, the methane cannot move into anyone’s home.

Finally, some claim that fracking will lead to radioactive drinking water. While shale has a radioactive isotope, tests of treated water and brine in New York and Pennsylvania found no elevated radiation levels. The treatment of water used in fracking makes the presence of significant amounts of radiation impossible.

While fracking requires following strict protocols, the natural gas supplied has been a boon for the United States. Fracking is cleaner than oil and coal, increases energy supplies and enhances economic activity. Some of the purported claims of the anti-fracking crowd are scare tactics created by those who have an economic incentive to see fracking fail.

Jul 02, 2014 | 4 comments | by

A Government of Regulation-The EPA’s New Rules

On Thursday the EPA will question Janet McCabe, EPA’s Assistant Administrator for the Office of Air and Radiation. The hearing will seek to sort out several questions regarding Obama’s recent proposal on power plants, specifically coal. The rules set out to curb emissions, but its indirect harm will not only shut down coal plants but cut thousands of jobs. The EPA itself has said that;

The rules could cost close to 80,000 jobs by 2030 at power plants and fossil fuel companies, but could create about 111,000 jobs in energy efficiency.

To make the assumption that jobs will be picked up through renewable energy is not only unfair but wrong. The ability to operate a coal plant versus say, a wind farm is very different. The workers who are in the coal plants will not be able to find new and comparable jobs to what they already have. These policies come at a time when natural gas prices and coal use are at an all-time low.

Production of Coal and Nat. Gas

It is also interesting to point out that the market is naturally selecting natural gas in favor of coal for production. In fact, as seen by the graph, as natural gas has risen in recent years coal has been dropping off. This has allowed the market to gradually adjust, as well as allow states to use what is best for them. While the proposal details letting the states determine what is fit for them, some states are better off continuing to use coal. There are states like North Dakota where 80 percent of their electricity comes from coal. This will surely guarantee an increase in the price of electricity for the state, as well as a large job loss.

Share of US Energy

None of this is even necessary as since 2006 the U.S. share of energy production has been steadily shifting. In 2006, a staggering 49 percent of energy in the U.S. came from coal. At the time it was the cheapest energy source available, at least until now. Advancements in natural gas production and renewable energies such as solar and wind have come a long way in 6 years. In just 6 years the energy production from coal dropped 12 percent. If that much can happen in 6 years, trends can predict that similar drops will happen.

However, The EPA and President Obama want to force the markets hand, and introduce large market fluctuations that will only make life harder on Americans. The questioning of the Assistant Administrator will no doubt be harsh and rough but it needs to be. This administration must learn that the best involvement is no involvement.

Jun 18, 2014 | Leave a Comment | by
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