By Kevin Crutchfield, Chairman and CEO of Alpha Natural Resources
On Sept. 20 the Obama Administration proposed regulations that would require future coal-fired power plants to deploy currently nonexistent technologies to reduce their CO2 emissions. The President has also directed the Environmental Protection Agency to propose rules next year to reduce CO2 emissions from existing coal fired plants. Coal provides nearly 40 percent of America’s electricity – no small amount – because it is domestic, abundant, affordable and reliable. By putting onerous restrictions on a resource that is such a vital part of the U.S. energy mix and U.S economic prosperity, the President needs to address four fundamental questions about the impact of his proposal – especially since it is being implemented by unelected regulators that are unaccountable to the people of the United States and the Congress.
What’s your plan to fill the future energy gap?
Demand for power in the United States is expected to grow 28 percent from 2011 to 2040 according the U.S. Energy Information Administration.
While we have made progress as a result of energy efficiency initiatives, we will still need new electricity generation in the future – to keep our lights on, manufacturing plants running, electric cars driving and our digital world humming (yes, iPhones and the cloud require lots of power, and it commonly comes from coal). Wind and solar provide only 5 percent of our electricity needs and continue to face technological challenges, most notably storage and 24/7/365 reliability. This is not to mention the amount of subsidies – taxpayers’ money – that renewables generally require to be cost competitive. Our nuclear fleet, which generates about 20 percent of our electricity, is ageing. New plants are facing increased pressure on the back of Fukushima, nuclear waste storage and cost concerns of implementing the next generation of technology.
What we’re left with is counting on natural gas to be the silver bullet. I believe natural gas is good for our energy security and good for our economy, which is good for our country. However, essentially staking our future, and our children’s future, on one energy source is irresponsible, risky and provides us with little margin for error. In fact, even the President himself referred to natural gas as a “bridge fuel” in his climate address. We can’t power our nation to growth without all energy sources, including coal, playing a meaningful role in the future.
How much will EPA’s proposals cost and who pays?
Our country currently enjoys affordable and reliable electricity in no small part because of the diversity of our energy mix. Competition is good for costs and limiting our choices will lead to higher electricity prices for everyone. Today, natural gas is a cost-effective energy solution that many businesses and individuals are turning toward. But what happens when these historically low prices double – or triple – and other energy options like coal are inhibited by government regulation? These costs will quickly reverberate throughout our economy. If there are no coal plants, there is no diversity, and we are forced to pay the cost, whatever it is.
Higher energy prices are regressive and will disproportionately impact the poor and those on fixed incomes who can least afford it. They will also flow through to all the goods and services that require electricity to produce. As part of this, American businesses, especially manufacturing, depend on affordable energy to compete successfully in today’s hyper-competitive global economy.
How long before research into advanced clean coal technology dries up?
Alongside industry, the Administration claims to have invested nearly $5 billion in clean coal research and development. Without a viable commercial market to support advanced clean-coal technologies – where America enjoys unmatched leadership – investment in this space will grind to a standstill. This is a missed opportunity. America was built on innovation, and we should continue to invest across the board to better use those energy sources that provide the vast majority of our generation and consumption. What we should not do, however, is what EPA is mandating: impose standards based on technologies still in the testing phase and not yet ready for commercial deployment.
The electric utility industry has steadily made progress but is still a ways off from developing the carbon capture and storage technologies in the Administration’s proposal. This proposal will undermine the substantial amount of investment that coal-fired utilities have already invested in cleaner production, as well as the significant amount of investment on the horizon. Coal-fired utilities have driven down emissions levels over the past several decades for criteria air pollutants – up to 90 percent in many cases – and the same can be done for carbon dioxide if given adequate time and investment for the technology to mature rather than be handicapped by regulatory mandate. Other countries benefit if the U.S. does not innovate, as the U.S. will lose the opportunity to be a seller of technology to the global market. In the meantime other countries will continue to build coal plants regardless, and be well positioned to out-compete us with a low cost electricity advantage.
- Page 1 / 2