Kentucky has won a battle in the War on Coal. Last month, the U.S. Supreme Court decision said the Environmental Protection Agency violated the Clean Air Act when it issued burdensome new regulations on power plant emissions.
The justices held that EPA was required by law to take the costs of their regulations into account as a part of the process — a statutory obligation that EPA had thus far refused to respect.
In the 5-4 decision, Justice Antonin Scalia wrote: “It is not rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits. Statutory context supports this reading.”
The EPA contends that it took the economic impact into account in later steps of the rulemaking process. But EPA grossly underestimated the full impact of the rule because it ignored indirect costs. The real question for Kentuckians is this:
Is EPA going to seriously consider the economic damage done to Kentucky’s families dependent on mining?
In the first quarter of 2015, the number of employees at Kentucky coal mines stood at 10,356, far fewer than the 19,422 who worked in the mines in the first quarter of 2009. Thousands more provide for their own families by working at small businesses that cater to these miners or support the coal industry in some way.
Yet before celebrating, those dependent on coal may want to hold onto their hats. The decision may have been a victory, but the case was only a skirmish in the larger war on coal. The Supreme Court has merely ordered EPA to consider economic impacts before enforcing its draconian rule.
EPA is required to go back and do its homework on cost/benefit analysis before the rule may become effective. But with the Obama Administration in office—with its anti-coal agenda—it will not be surprising if EPA ultimately decides to implement the rule after considering the economic impacts, which means that this ultimately remains a political issue.
So, odds are that Kentuckians can expect the assault on the coal industry to continue. Oh, there will be announcements of government programs to spend a little money on workforce training, to help the displaced miners find new jobs, but there are no jobs. Unemployment in the coal fields is still the highest in the state.
We can also count on these regulations to drive the cost of electricity up for all of our households, small businesses and industries. Low power rates are one of the strongest lures the commonwealth has in bringing new jobs and industry here. Our advantage will take a big hit.
We continue to hear about green jobs that will be created with wind and solar energy. Neither of these will produce the cheap power that Kentucky needs to create jobs. Regardless, any of these “clean energy” solutions will not generate enough jobs in eastern Kentucky to help the thousands of displaced coal industry workers.
Under the EPA’s rule, our state will be forced to levy emission reductions that will produce an 18.3 percent reduction in carbon by 2030, based on 2005 levels. That’s a pretty big number, but consider this: By using levels from a decade ago, the reduction does not take into account 10 years of industrial growth. Thus, the reduction target will be even higher.
And let’s not forget “cap and trade.” This was a major initiative of the Obama administration that failed in Congress several years ago. Soon you will hear that the United States should get in the business of selling “carbon credits.”
Just like “cap and trade,” it delineates the maximum emission level and forces businesses to “purchase” the ability to expand by buying “credits.” This is widely used in Europe, but has lead to “speculative” pricing and become quite the business.
Higher energy costs would hurt everyone, but they would be especially harmful to small businesses. According to the NFIB Research Foundation’s 2012 Small Business Problems and Priorities survey, the cost of electricity was ranked number 12 out of 75 issues, ahead of other major problems like cash flow and poor earnings.
Small businesses need affordable energy not only to stay competitive but also to simply stay open. If the government essentially mandates higher energy costs, then the cost of everything else will go up as a result, and businesses will have no choice but to pass the higher costs onto their customers, people like you and me.
In order to create an environment that supports families and small businesses and helps create jobs, this Obama administration needs to expand our energy options, not limit them. If the administration is allowed to impose these drastic new rules on coal, then I’m afraid it will be lights out for Kentucky.
Tom Underwood is the Kentucky state director of the National Federation of Independent Businessn. He can be reached at tom.underwood@NFIB.org.
See the article here.
- On July 21, 2015