New Analysis Underscores Power Plan’s Costly Consequences

WASHINGTON — “Energy policy needs to ensure all Americans have affordable and reliable electricity to meet everyday challenges and to help build a strong foundation of economic success. Regardless of where you stand politically, this plan fails to meet that threshold.”

Washington, D.C. – New analysis from NERA Economic Consulting shows the Environmental Protection Agency’s power plan comes with a hefty price tag that could approach $300 billion and raise electricity prices in each of the 47 states subject to the new regulation. Despite these enormous costs, the rule does nothing to prevent global climate change.

“This analysis makes it abundantly clear the president’s power plan will result in higher electricity prices and delivers a sharp wake-up call to states and consumers,” said Mike Duncan, ACCCE president and CEO. “Common sense tells us that with 27 states seeking judicial action to stop this plan from being implemented there is reason enough for EPA to take this rule off the table. Sadly, however, common sense isn’t prevailing and as result Americans’ economic well-being and livelihoods are at risk.”

Despite the fact that the president’s plan will have virtually no effect on climate change, NERA’s analysis shows that all of the Lower 48 states will see electricity price increases because of the rule. Consumers in 40 states could see double-digit electricity price increases, and 28 states could face electricity price spikes greater than 20 percent. The annual cost of at least $30 billion per year for the plan is three times greater than the cost of EPA’s Mercury and Air Toxics rule, which the U.S. Supreme Court criticized by saying, “It is not rational … to impose billions of dollars in economic costs in return for a few dollars in … benefits.”

“Energy policy needs to ensure all Americans have affordable and reliable electricity to meet everyday challenges and to help build a strong foundation of economic success. Regardless of where you stand politically, this plan fails to meet that threshold,” Duncan said.

Advertisements

Scraps from the Table: Obama’s Plan an Insult to West Virginia’s Coal Mining Families

By Bill Raney, president
West Virginia Coal Association
Let’s say you are walking on the street and a man comes along, pulls out a gun and steals your

Sierra Exif JPEG
Bill Raney

wallet, all your money and credit cards, your watch and your wedding ring. He starts to walk away, but turns around and hands you back a five dollar bill and says he didn’t “want to leave you with nothing.”
Would that change your opinion of the man? Of course not, he’s a thief and it was YOUR money to begin with. The only reason he gave you back any of the money was to placate his own guilt.
The Charleston Gazette suggests that we should be grateful to someone who has, for more than six years, systematically done everything possible to destroy America’s coal industry, our coal miners’ jobs and families as well as the counties and communities that rely on us mining coal, all because he now wants to toss a few dollars back to his victim. This is simply guilt money and the most damaging type of hypocrisy.
While I am happy that the Gazette has finally acknowledged the pain the Obama War on Coal has caused the coalfields communities, their endorsement of Obama’s “plan” is little more than the words of a co-conspirator in the mugging trying to absolve their own guilt.
Now, we should do everything we can to take the money because the people of the coalfields ARE hurting and we want to do whatever we can to help, but it’s important to put and keep this Obama “payoff” into perspective.
According to the Gazette, The White House 2016 budget contains a “Power Plus Plan” that would:
• Provide $200 million per year for five years to clean up abandoned strip mines, which could create multitudes of jobs for laid-off miners;
• Provide $5 million for “brownfields” work cleaning up pollution at coal-fired power plants.
• Provide $20 million to retrain ex-miners and help them find new jobs;
• Provide $25 million to the Appalachian Regional Commission for efforts to create new businesses and upgrade water, sewer and telecommunications infrastructure;
• Provide $6 million more for “place-based regional innovation efforts” to spur jobs in distressed coal communities; and,
• Award $3.9 billion over a decade to shore up pensions and medical care of retired miners.
So how much of this “Obama payoff” can West Virginia realistically be expected to get?
In all likelihood it would be a small fraction of the total package – on the order of a few million dollars if you set aside the $3.9 billion that would be used to provide for miner and retiree pensions. Never mind that every dime of this money came from the coalfields to begin with — paid into the AML Fund by companies as a portion of their sale price of coal. So we are going to get back a small portion of the money we paid all these years?
By my calculation that is $256 million for the first year and $200 million in the subsequent four years in temporary aid for all the coal-producing states! In addition, $3.9 billion will be parsed out over ten years to “shore up” pensions and medical care for retired miners. Now it is important to say we applaud the effort to make sure mine retirees and their surviving spouses are provided for. It’s also important to say those pensions would likely not be in trouble today were it not for the actions of this administration. In fact, we have warned for the past seven years that this was coming, but neither the Obama Administration nor their supporters in the media would listen. I don’t think they ever considered or contemplated the far reaching negative impacts of their orders and behavior because reduced production brings reduced payments to these funds and no one should every be denied their pensions they‘ve worked their whole life to earn!
It is also important to understand that is not all of the remaining $256 million in temporary aid is directed to West Virginia or even Appalachia (as apparently the Gazette would have us believe). This would be spread out across all the “coalfields” of the United States – all 20+ states and I am sure some would also find its way to the “coalfields” of Chicago and Los Angeles since they use electricity!
To put that into clear perspective, the coal industry has historically provided about $3.4 BILLION EACH YEAR in wages in West Virginia alone and $26 BILLION EACH YEAR to the state’s gross state product. Obama has attempted to systematically strip us of that economic base.
The Gazette would have you believe the decline in the coal industry is “attributable to a flood of cheap natural gas, to depletion of good Appalachian coal seams, high company debt and the fall of coal prices,” but this is neither the whole nor accurate story. We could have wrestled with each of these factors in a free market of competition, but when our own government has it’s “foot on our throat”, picking winners and losers through the Obama assault on coal and its use, each of these factors are accentuated through the uncertainty that it has perpetrated.
The coal seams of Appalachia (West Virginia) are not in significant decline. In fact, underground productivity is at near record highs. Our overall productivity, however, has declined due to the reduced use of highly productive surface mining. Falling coal prices are directly attributable to the war on coal and the push to move the electric generation to less use of coal by the forced closure of much of the nation’s coal-fired power generation fleet. This so-called “cheap” natural gas is actually 31% MORE expensive on a per million Btu basis than West Virginia coal and is still below its market breakeven price even at this price level. And company debt is the direct result of these factors making it difficult if not impossible for some of these companies to compete.
Now the Gazette and other media outlets have been at the forefront of aiding this assault on America’s mining families, perhaps not realizing the long-term damage it would do to people. Today, rather than accept the responsibility for the policies that are threatening the futures of so many, the Gazette and others are trying to cast the Obama mugging of Appalachia as a “gift to help us overcome our economic problems.”
If you really want to help West Virginians, and Kentuckians, and southwestern Virginians, and all the others across the coalfields of this country, you wouldn’t just throw us some table scraps, you would get out of the way and help us put our miners back to work.

Del. Rupie Phillips: “Just Say No to EPA”

SAVANNAH, Ga. – Del. Rupert “Rupie” Phillips, D-Logan authored a resolution adopted by web1_phillips_rupert-CMYKthe Southern Legislative Conference (SLC) calling for member states to take action against the Environmental Protection Administration’s Clean Power Plan. The resolution was adopted on July 19 by the energy and environment committee at the four-day annual meeting in Savannah, Georgia.

“Through the Clean Power Plan, the EPA has once again produced another far-reaching, overly burdensome regulation. They’re continually tying the hands coal-producing states and the effects have been absolutely devastating for southern West Virginia.”

Del. Phillips added, “It’s time to draw a line in the sand. The EPA is pushing us around like they are a bunch of punks. I just want the states to stand together and say ‘no.’”

The adopted resolution states, “The Southern Legislative Conference of The Council of State Governments finds that EPA’s Clean Power Plan interferes with the sovereign powers of the states to regulate electricity within their borders and to ensure a reliable and affordable supply of electricity for their citizens. Therefore, The Southern Legislative Conference of The Council of State Governments urges State Attorneys General to take all legal actions after EPA issues its final Plan to prevent unlawful obligations from being imposed on states, electricity providers, businesses and citizens, up to and including, at each state’s discretion, refusing to submit Clean Power Plan implementation plans to EPA.”

Del. John B. McCuskey, R-Kanawha also attended the conference and supported the measure saying, “As we pass this resolution through the SLC, I am proud to stand with Delegate Rupie Phillips to push back against harmful federal overreach which unfairly targets the hard working men and women of our state’s coal economy. The people of our state don’t want anything extra, they just want a chance to compete, and it is our hope to ensure that these proud people are given the opportunity to continue to power America. The EPA needs to realize that the jobs lost due to their policies are not just statistics, these are real people, and their suffering is real.”

Several other delegates who attended the conference also supported the measure including Del. Gary Howell, R-Mineral; Del. Woody Ireland, R-Ritchie; Del. Joe Statler, R-Monongalia and Del. Mark Zatezalo, R-Brooke.

The Southern Legislative Conference is the largest of four regional legislative groups that operate under the Council of State Governments. It comprises the states of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia

EPA v. American Mining Jobs: The Obama Administration’s Regulatory Assault on the Economy

FOR IMMEDIATE RELEASE: Oct. 9, 2013                   

 

FOR MORE INFORMATION, CONTACT:

Chris R. Hamilton, SVP, West Virginia Coal Association

Ph. 304.342.4153 or email at chamilton@wvcoal.com

 

Re: Testimony of Chris R. Hamilton, SVP, West Virginia Coal Association and Chairman, West Virginia Business & Industry Council as Presented to the Subcommittee on Energy and Mineral Resources of the Congressional Natural Resources Committee Oversight Hearing on October 10, 2013.


EPA v. American Mining Jobs:

The Obama Administration’s Regulatory Assault on the Economy

Good afternoon!  I’m Chris Hamilton, Senior Vice-President of the West Virginia Coal Association and Chairman of the West Virginia Business & Industry Council.  I appreciate the opportunity to participate in your meeting and discuss the actions or inactions of this Administration on West Virginia’s economy.

West Virginia just celebrated its 150th birthday and we’ve been mining for all of those 150 years.  We are without question one of the state’s leading industries, if not the leading industry.  We have always provided good paying jobs, infused millions of dollars into local and state wide economies and have provided the region, state, country and world with low-cost, reliable power on a 24/7 basis. That’s what we do.

As a state, we manufacture and export energy and power throughout the eastern part of our country and throughout the world. It enables millions of Americans to enjoy the freedom and the world’s greatest quality of life.

West Virginia is the second leading coal producing state, the country’s leading underground coal producing state and the US leader in coal exports, accounting for 50% of the US total.  We have consistently averaged between 150 – 160 million tons of annual coal production over the past several decades – until this Administration took office.

We ship coal to practically every state east of the Mississippi river and some 38-39 foreign destinations.

Coal mining is a $30 billion industry in West Virginia with coal and electric utilities accounting for over 60% of all business taxes. Over the years, we’ve enjoyed a great workforce, great access and coal quality, close proximity to ports, and generally, a good infrastructure. We have the best miners and coal quality found anywhere in the world.

Our industry was rolling along just fine, expertly navigating the typical cyclic nature of our business with economic fluctuations and mild weather patterns affecting demand and market conditions.  In January 2009, all that changed when we began to experience an all-out assault on our industry from the Obama Administration and our federal government.

Literally, the day after President Obama took office, mining companies in West Virginia began to receive objection letter after objection letter from the U.S. Environmental Protection Agency, raising objections to new permits and even already-active operations that were previously approved and cleared by EPA, the US Army Corps of Engineers and WV Department of Environmental Protection.

Then came the Administration’s Council on Environmental Quality and its multiagency mine permit review process known as the “enhanced coordinated permit review process” and the imposition of new permit demands. This effectively slowing the mine permit process to a crawl, which soon afterward became known as the Administration’s  “permitorium”– the hijacking of state primacy of water quality standards.

The Administration’s “War on Coal” has been waged with a barrage of ill-conceived administrative actions, litigation and regulatory actions such as EPA’s Spruce mine retroactive veto, the Office of Surface Mining and Reclamation’s totally unnecessary efforts to rewrite of the stream buffer zone rule, the Mine Safety and Health Administration’s ill-conceived and scientifically baseless regulatory changes and EPA’s regulatory “train wreck.” The “War on Coal” is not rhetoric. It is real, and it is killing us.

Today, 57 months into the Obama Administration, the war on coal has taken its toll and things are very bleak.  Currently, West Virginia has 101 fewer mines operating today than this time in 2008 – that means approximately one-third of our coal mines operating in 2008 are now closed.  All mining operations are impacted, and every mine has been slowed or has cut back.

In West Virginia alone, there are over 3,500 miners laid off or furloughed and another 12,000-15,000 mining-dependent jobs have been lost.  Across the Appalachian region, the damage is even worse, with approximately 10,000 direct mining jobs lost and another 40,000 indirect jobs lost.  At an average salary of$75,000 per person, the net effect is the removal of $719 million from West Virginia’s economy and a $2.05 billion loss from our region.  These are real dollars that have been lost, impacting every family and business in our area.

The hardship on individuals and West Virginia families is hard to imagine from Capitol Hill.  High stress, not being able to make ends meet, basic life needs not being met — these are all too commonplace now, leaving a large number of West Virginians without hope and vulnerable to the perils of today as hopes of gainful employment vanish and the possibility of life without a paycheck and health care benefits preconditions all else. As mining jobs have been stripped away, we have seen a significant rise in drug and alcohol abuse, theft and other forms of crime and social decay.

Small communities throughout our state have been threatened as county and municipal budgets and resulting government services dwindle.

Since 2008, West Virginia has lost 25% of production as coal prices and productivity continues to fall.  West Virginia has lost millions of dollars in severance tax collections which funds education, county budgets and important programs for seniors and the less fortunate.

To make matters worse nearly 300 coal-fired power units nationwide have closed or will be retired this year. Other plants have switched to natural gas. A total of eighteen (18) coal-fired units in West Virginia have announced their plans to close.

It is estimated that each unit accounts for approximately 100 full-time positions, thus the total number of jobs impacted in West Virginia by these closures is approximately 1,800 additional jobs.

By utilizing every resource available to him, every federal agency, President Obama has done everything in his power to obstruct West Virginia coal production and prevent our industry from maintaining its viability in domestic and world markets.  To date, all the negative administrative and policy acts have underscored his to kill coal mining in a “death by 1000 cuts”.  The President’s plan on climate change, evidenced most recently by EPA’s New Source Performance Standards is a knock-out punch for our industry. Without question, the president is picking winners and losers in energy production, and he wants coal to lose. What he fails to realize, however, is if coal loses, America loses. No other single energy source can replace coal and the energy security it provides to the United States, not to mention the critical role it plays in our steel industry.

Our only savior at the moment appears to be the export market.  As domestic usage continues to trend downward, international demand grows exponentially.  With West Virginia currently accounting for a large share of US exports, we stand to gain and become a world marketer of coal.

Fortunately for us, world coal usage is on the rise as developing countries expand their economies and infrastructure.  Exports have doubled over the past five (5) years and coal is quickly becoming the world’s fuel of choice for power generation. In fact, coal is scheduled to surpass oil over the next two to three years.

Other nations see coal the way America used to view this resource, as an abundant, low-cost and reliable fuel. America became a manufacturing superpower thanks to coal, and it can’t be a coincidence that our global domination waned when we stopped fostering coal industry development.

Although the current export market appears strong today, predictions of our continued presence and strength vary.  As with domestic energy, we face strong competition for seaborne coal from foreign producers who do not have the same level of protections for the environment or for human rights.

Actions of this president have even placed global opportunities at risk by calling on the World Bank and international financial institutions to stop funding the construction of coal-fired power plants. In addition, the construction of new port facilities which could handle greater coal volumes are endangered by the EPA.

In closing, I simply observe that the president speaks a lot about economic justice and hope and promise. I would ask the President, where is the justice for West Virginia and Appalachia?  Where is the hope and justice for our coal mining families?

There are few other career options available for many of our miners, and by his actions, this president is effectively condemning them to lives of poverty and despair.  Again, I ask where is the justice? Why are our families less important to you than others? Why don’t we matter to you, Mr. President? Please, let us work and power America.

The West Virginia Coal Association is a trade association based in Chareston, West Virginia. It represents approximately 98 percent of the state’s coal production. Founded in 1914, the West Virginia Coal Association is the largest state coal association in the nation.

-30-