Wyoming’s beleaguered coal industry received welcome news last week when the Environmental Protection Agency (EPA) formally rolled out the Affordable Clean Energy rule (ACE). The effects were immediate and dramatic.
In anticipation of the EPA rule, PacifiCorp announced that coal-fired generators at its Naughton and Jim Bridger power plants would stay online for years past the 2022 closing that they announced in April. While PacifiCorp did not mention the EPA’s new rule, it’s not hard to connect the dots.
The Affordable Clean Energy rule is a necessary replacement for the Clean Power Plan (CPP) of 2015. The CPP effectively shut down coal-fired generators but when 27 states sued, the supreme court blocked its enforcement.
Since the court stayed enforcement of the CPP, America’s energy sector has been operating in a regulatory limbo. This unstable environment discouraged investors from spending money on units that might be shuttered at the wave of a bureaucratic hand.
Thus, while the rule itself could not shut down coal generators, the market instability manufactured by the EPA was just as effective. When the EPA destabilized electricity producers, it had an immediate effect on the mines that fuel them.
A power plant can adapt to an unstable regulatory environment by investing in natural gas generators and pipelines to keep them producing. But what is a mine supposed to do when it faces the sudden loss of more than half its customer base?
When mines in adjacent counties face this crisis simultaneously, the desperation to find new markets for the government-created glut of coal will depress the price of coal across the board. These market ripples, in turn, threaten to sink other mines operating on a razor-thin margin.
Bean counters in Washington may think that a mine can simply lay off half of its employees. But real life doesn’t work that way. Any retailer knows that a loss of half her customer base would not simply reduce profit by half. It would likely bankrupt the store. So also, the mine.
Investors are understandably wary of an operation that stands to lose half its customer base in three years. Kemmerer has seen the real-life consequences of Washington policy as potential buyers for the Westmoreland mine faded away.
Jobs, pensions and health insurance are on the line. House payments and truck payments don’t simply stop when a miner loses his job or has his work hours cut. The bankruptcy of mines translates to the bankruptcy of families. All of this means that schools, churches and small businesses are destabilized.
The Affordable Clean Energy rule has breathed clean air into coal communities across the state. Of course, the EPA itself is neither the savior nor the villain. Neither is any single administrator or administration.
The issue, rather, is an idea. On December 7, 2009 the EPA classified CO2 as a “dangerous pollutant.” Previously, the EPA was concerned with soot, sulphur and other unnatural byproducts of industrialization. These are harmful to the environment and harmful to humans, and the EPA successfully reduced these pollutants to negligible levels.
But CO2, water vapor and other greenhouse gases are naturally occurring. CO2 is the natural by-product of life itself. All people, all animals, even bugs produce it. While filters and efficient burning can reduce real pollutants, CO2 and water are the pure products of almost every chemical reaction that releases energy.
Classifying CO2 as a pollutant gives a lever to government to regulate everything. Should the EPA succeed in shutting down every coal-fired generator and every coal mine in Wyoming, there is no reason on earth why it wouldn’t go on to shut down every natural-gas-fired generator and every oil well in Wyoming.
That’s the simple reality of classifying CO2 as a “dangerous pollutant.” Our elected representatives haven’t done this, only unelected bureaucrats have. Meanwhile numerous countries, including the largest industrialized nation in the world, refuse to designate CO2 as a pollutant.
Nevertheless, last Wednesday’s ACE rule was met by a hue and cry from many politicians and radical groups claiming that “settled science” has proven CO2 to be a dangerous pollutant. Nancy Pelosi’s statement was typically breathless. She called the ACE a “dirty-power scam,” as though it were about dumping sulphurous soot into our atmosphere and acid into our lakes.
It’s time to dial back the rhetoric and have a real conversation. The past several years under the CPP has given Wyoming a wake-up call about the real-life consequences of designating CO2 as a pollutant.
Thankfully, the courts told the EPA it had exceeded its authority. It was created to enforce pollution laws, not to rewrite America’s energy policy unilaterally. Now that we have room to breathe, it’s time we had an informed conversation about CO2.
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