American Elephants


Obama Promised to Bankrupt the Coal Industry: the EPA is Doing it For Him. by The Elephant's Child

President Obama was speaking in Ohio a couple of weeks ago on one of his many campaign swings, and he said quite specifically:

We also need to keep investing in clean energy like wind power and solar power.

And as long as I’m President, we are going to keep on making those investments.  I am not going to cede the wind and solar and advanced battery industries to countries like China and Germany that are making those investments.  I want those technologies developed and manufactured here in Ohio, here in the Midwest, here in America.  (Applause.)  By American workers.  That’s the future we want.

The president has picked three industries and is arguing for an industrial policy to subsidize them — in part, just because other countries are subsidizing them. This is the same president who argues that we must remove such subsidies from our tax code. If he wants to subsidize wind and solar power because he wants to accelerate the development of carbon-free alternatives, then he should make that argument. These edicts bypass the legislative process, but Obama has little interest in the legislative process unless it backs him on whatever he wants to do. Without their cooperation, he’ll just do it on his own. He’s president. Who’s going to stop him?

Germany, in the meantime, is cutting their subsidies for solar energy. Their solar cell manufacturing companies are going bankrupt, and Germany is turning to coal for energy. The Germans are paranoid about nuclear energy, though the French, next door, are committed to nuclear energy.  Obama, on the other hand, is not only not up on what other countries are doing, but he simply does not change his mind:

If someone wants to build a new coal-fired power plant they can, but it will bankrupt them because they will be charged a huge sum for all the greenhouse gas that’s being emitted.
Candidate Barack Obama, 2008

We were warned. This week the out-of-control bureaucrats at the EPA announced a set of proposed rules designed to target greenhouse gas emissions. If enacted, these rules will essentially destroy the coal industry. Under the proposed rules, new power plants will be required to emit no more than 1.000 pounds of carbon dioxide per megawatt hour of electricity. Coal plants average 1,768 pounds of carbon dioxide per megawatt. Natural gas plants already meet this requirement, but if a utility wants to burn coal for electricity, it will need to install carbon capture technology— which is very expensive.

The EPA stresses that the new rules would apply only to new plants, but nobody believes that. David Doniger, climate program policy director at the Natural Resources Defense Council notes that the Clean Air Act will undoubtedly make it inevitable that the EPA will tackle existing coal-fired plants. Mr. Doniger promises “We look forward to reaching an agreement with EPA on a schedule for completing the standard for new sources and developing standards for existing sources. Excuse me, but who elected the Natural Resources Defense Council to have any voice in official policy? And the American people have no voice?

Isn’t this the very same Barack Obama who was out on the campaign trail bragging about his “all of the above” energy policy, because people are upset with high gas prices? The “all of the above” claim was clearly a lie. But there is an enormous problem here. Coal-fired power plants produce 45 percent of our electricity. These EPA standards effectively bans new coal-fired plants, and will lead to higher energy costs as the country is forced to switch to natural gas for base-lead supply. Coal is our cheapest energy source, and the United States is the “Saudi Arabia” of coal.

The big problem is that the EPA seems determined to shut down coal plants first, assuming that Obama’s new green energy will replace it. That will not happen. Both wind and solar require 24/7 backup from a regular power plant. Manufacturing states like Michigan are particularly dependent on coal, with 70 percent of the state’s electricity needs coming from coal. Carbon capture technology is still  ‘under development.’ Expensive and not available.  The natural gas industry is historically very volatile. The natural gas industry has discovered vast new resources in the U.S. but that exploration is coming under assault from the EPA.

This misguided ideological thrust is heading into unknown territory of brownouts and blackouts. Our need for energy in increasing at the same time that Obama is waging war on cheap available fossil fuels. The lack of any significant warming for over a decade makes it more difficult for the warmists to demonize CO2. CO2 is not, contrary to EPA claims, a pollutant. Life on earth has flourished for hundreds of millions of years at much higher CO2 levels than we see today. Increasing CO2 levels would be a net benefit, because plants grow better and are more resistant to drought at higher CO2 levels. Nations that have plentiful supplies of cheap, abundant fossil fuels are far more prosperous and healthy than those without.

The administration has decreed that by 2020 — in just eight years—we are to get 30% of our electricity from “renewable resources.” The current amount that we get in total pow from renewable resources is just 8.2%. So the nation that is the world powerhouse of cheap, abundant fossil fuels — oil, natural gas and coal — is supposed to dump those and depend on windmills and solar shingles that cannot exist without huge governmental subsidy and full time backup by—fossil fuel power plants.

That makes sense only if you are a failed president who  needs the backing of the big environmental organizations like the Natural Resources Defense Council and the Sierra Club and the others who are all awash in money.

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1 Comment so far
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Nations that have plentiful supplies of cheap, abundant fossil fuels are far more prosperous and healthy than those without.

If by supplies you mean domestic production, that is certainly not the case. On the positive side, one can cite Australia, Canada, Netherlands, Norway, Qatar. On the negative side, think Khazakstan, Nigeria, Venezuela and, yes, even Mexico. (Its prosperity has been increasing as its hydrocarbon output has been declining.)

On the other hand, plenty of fossil-fuel-poor countries, like Botswana, Brazil (before it discovered large deposits offshore), Chile, Denmark, France, Hong Kong, Iceland, Sweden, Switzerland, Uruguay, have managed to have more prosperous countries than their neighbors in their regions.

It all comes down to governance in the end, though access to supplies of some sort of energy (hydoelectric or nuclear included) can help.

Comment by Subsidy Eye




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