A C.S.X. train loaded with coal winds its way into the mountains in this Nov. 21, 2004 file photo taken near the New River at Cotton Hill in Fayette County, W.Va. (AP Photo/Jeff Gentner)
There’s a new report out from Downstream Strategies and the WVU College of Law’s Center for Energy and Sustainable Development that takes a look at the opportunities that the Clean Power Plan could create for West Virginia’s coalfields.
You can read the report, “Expanding Economic Opportunities for West Virginia under the Clean Power Plan,” but here’s the conclusion:
Achieving compliance with the Clean Power Plan presents a number of challenges for West Virginia, which has historically relied on coal to generate most of its electricity and as an economic driver. Over time, coal-fired power plants in West Virginia will burn less coal, and other states that have historically imported West Virginia coal will also burn less coal. Increasingly stringent environmental regulations will converge with market forces that continue to make Central Appalachian coal less competitive—the development of cheap Marcellus Shale natural gas, the greater affordability of renewables, and the increasing cost of mining thinner and deeper coal seams. Even today, before Clean Power Plan implementation has even begun, coal production is decreasing, West Virginia coal miners are losing their jobs, coal companies are filing for bankruptcy, and severance tax revenues are declining.
West Virginia has the resources to meet these challenges, however, and can usher in new economic opportunities with appropriate planning and policies.
To do so, policymakers must take advantage of the opportunities presented by the Clean Power Plan and utilize the full flexibility provided by the rule to shape a strategy for West Virginia that reflects its unique circumstances and leverages its strengths. West Virginia is fortunate to have tremendous energy resources in addition to coal, and these other resources—including natural gas, renewable energy (wind, solar, hydropower), and energy efficiency—are relatively untapped. By implementing the legislative and regulatory policy changes outlined in this report, West Virginia lawmakers and regulators would provide an investment climate that attracts new investment in renewable and DG technologies, energy efficiency, and natural gas–fired generation. West Virginia can also spur innovation in other areas that would diversify the state’s electric power sector, reduce carbon pollution, and provide West Virginians energy savings and new economic opportunities. Taking advantage of the emissions trading opportunities contemplated by the Clean Power Plan would provide West Virginia with a fairly low cost compliance strategy, by incorporating the relatively abundant ERCs and allowances from surrounding states having greater zero- and low-carbon resources and energy efficiency savings, as noted in the DEP Feasibility Report, to enable coal plants to continue operating.
A better strategy would be to take advantage of the economic opportunities that will be created by emissions trading, through enactment of state policies that will encourage the development of zero- and low-carbon resources and energy efficiency savings within West Virginia. The state’s strategy for achieving compliance with the Clean Power Plan should focus not only on minimizing compliance costs, but should also consider the opportunities that are created by the economic activity stimulated by the Clean Power Plan.
Developing an all-of-the-above energy policy like those modeled in this report would help West Virginia take advantage of additional cost-effective compliance measures available under the Clean Power Plan, while at the same time capturing the other benefits of tapping into off of West Virginia’s energy resources. Leveraging all of West Virginia’s energy resources to reduce carbon pollution will also provide long-term benefits throughout the state as new jobs are created in new sectors of the state’s economy.
Navigating a path forward for West Virginia will require a comprehensive approach, both in terms of the energy resources deployed and the involvement of policymakers throughout both the state and federal government. Lawmakers, regulators, utility operators, and other stakeholders in West Virginia can build upon the results of this report and develop additional analyses to evaluate West Virginia’s options for meeting its obligations under the Clean Power Plan. Coordinating state planning efforts with other states and PJM will provide additional insights and new compliance avenues. West Virginia regulators deserve the full support of the state government to engage in regional planning discussions. Building on the analysis conducted for this report will enhance West Virginia’s ability to take advantage of the broad flexibility provided under the Clean Power Plan and serve the dual purpose of providing a framework for identifying opportunities to expand other sectors of the state’s energy economy and foster new opportunities for economic growth throughout the Mountain State.