Tuesday, April 15, 2014

Fish or Cut Bait

One of the favorite tropes of my Republican colleagues in the Montana legislature is that the Obama administration, working through the nefarious EPA, is waging a “War on Coal.”   Dealing with this rhetoric, which I have done in previous posts, is getting a little tedious, but Sen. Fred Thomas’ most recent broadside in this so-called war is so absurdly ill-founded that it really requires a response.

In a recent column in the Missoulian, Thomas goes after the EPA’s carbon emission standards for new coal fired power plants. Among other things, he claims that the EPA, evidently in cahoots with unnamed environmental groups, has imposed these standards to “end coal development.” The result, he claims, will be that no new coal fired power plants will be built, resulting in the loss of “hundreds of thousands of jobs supported by the American coal industry.” The price Americans pay for electricity will go through the roof. The diversity of our energy supply portfolio will decline. And there will be an “immediate cessation” in the development of new carbon emission technology by an industry that has achieved “dramatic reductions” in pollution without goading from the EPA

It’s hard to know where to begin with this muddle, but let’s give it a try.

As has been noted over and over again, and despite what Thomas thinks, the EPA’s new source carbon standards are not going to block the construction of new coal fired power plants, for one simple reason: even without the standards, nobody is planning to build such plants anyway. Look at the figure below, which is taken from a US Energy Information Administration forecast of where new generating capacity is going to come from for the next 25 years. The little black bars, which can hardly claw their way above the horizontal axis, represent coal’s contribution to that new capacity.  Over the whole period, coal accounts for only three percent of the total, leaving almost all of new electrical generating capacity to come from natural gas and renewables.

Since the EPA standards can’t stop new coal fired power plants from being built if they weren’t going to be built in the first place, the obvious corollary is that the standards are not going to destroy “hundreds of thousands” of coal supported jobs. Of course even if the standards were to prevent new plants from being developed, the effect would simply be to slow the growth of coal supported jobs, not to destroy the jobs that are already in place. So even in the worst case, “hundreds of thousands” of coal supported jobs have never been in jeopardy from the EPA regulations, and Thomas should know that.

The same thing goes for the trajectory of electricity prices. How these prices behave in the future is going to depend on how fast the supply of energy grows relative to the growth of demand. Look at the figure again. Coal is not expected to contribute in any significant way to new generating capacity, and that means the EPA standards will have nothing to do with how fast supply is going to grow. The standards therefore cannot produce the electricity price spikes that Thomas wants you to be alarmed by, nor can they hasten the decline in coal’s market share (not that that means what the senator thinks it does*).

Thomas is right about one thing: there is a war going on here. But it’s a war on climate change, not coal, and frankly, it’s off to a pretty lame start. The EPA new source standards aren’t going to deflect emissions from whatever rising path they are on, let alone reduce them. But make no mistake about it: if the war on climate change ever gets serious, carbon emissions are going to have to go down (slowing emissions growth will not be enough) and that means that short of a technological miracle we are going to have to reduce the amount of coal we dig up and burn. That’s a tough fact for Montana politicians to swallow, but let’s face it: we can talk all we want about “responsible resource development” or how “coal is always going to be a part of our energy future” or “hundreds of thousands of coal jobs,” but if we are serious about arresting climate change, we can't have it both ways. We're going to have to fish or cut bait.

None of this means we should shut down coal, declare victory and go home. It can't be done and it won't work.  And largely empty gestures like the EPA new source standards are not going to get us where we want to be. The efficient path to reducing emissions is going to involve a lot more than that: more renewables, less oil as well as less coal, more energy conservation and efficiency and possibly carbon sequestration.  What we should dread is that we will never start down than path in the first place. Or that when we do, it will already be too late.

* Thomas believes that when coal’s market share declines we lose diversity in the energy supply portfolio. How does that work? Coal is by far the largest single source of energy in the electricity supply portfolio. As it is displaced by other energy sources such as wind or natural gas, it loses market share, we become less dependent on a single source for our energy, and we have a broader set of alternative sources to choose from. That amounts to greater diversity, not less.


  1. Not that I blame you, but you never got to this last point of the senator's:

    " And there will be an “immediate cessation” in the development of new carbon emission technology by an industry that has achieved “dramatic reductions” in pollution without goading from the EPA"

    This is nonsensical. There have been no reductions in carbon emissions of any kind, let alone dramatic ones, by the coal industry. If there were, it is unclear why standards which could only be met with the deployment of such technology would cause an immediate cessation in their development. Coal industry spokespeople have been saying for years that investment in carbon capture and sequestration will only happen when there is a settled national policy on the question, but when EPA proposes a settled policy that would require it, the senator and other industry supporters say it will cause the end of the development of this technology.

    1. Thanks, John. I do plan to address this issue a little more in my next post.

  2. Well done Dick. Thank you.

    Fred was at the "Conservatives United" candidate meet and greet in Hamilton 4/26 making nice with Suzy Foss. Conservatives United is the Bitterroot's latest reincarnation of: The John Bircher's---The Militia---Celebrating Conservatism----Tea Party, to name all I can think of right now. On a possibly hopeful note; there were very few people there and the "us's" may have outnumbered the "them's."

    An added irony of Fred warning everyone that our electric prices are going to go through the roof is that he was instrumental, as a state senator, in energy deregulation in Montana which DID cause Montana's energy rates to spike. I don't think he's really worried about us poor little rate payers.