Back in 2012, some progressive outlets were saying how government regulations and the Environmental Protection Agency weren’t to blame for coal’s supposed decline; it was the market. One writer said at the time “‘market conditions’ are kicking coal’s ass anyway.” That doesn’t appear to be the case. There may not be much interest in buying coal stocks, but people still want coal for energy consumption (via Slate):
…Coal haters shouldn’t be too gleeful at this spate of bankruptcies. While some mines are being idled, they’re not being shuttered en masse. The financial failure of many coal companies, by itself, won’t necessarily bring about a low-carbon future—and for particularly Americans reasons.
Coal production is falling in America—just not by quite the amount you would expect given the financial stress hitting the industry. According to Bloomberg Intelligence, the number of working coal mines in the U.S. has fallen nearly 40 percent in the past 10 years. But those that remain open are still quite productive. According to the Energy Information Administration, total annual coal production fell about 14 percent between 2008 and 2014. In the first seven months of 2015, production is down only 8 percent from the first seven months of 2014.
The slightness of these declines tells us that the market for coal is very different than the market for coal stocks and securities. While nobody wants to buy the publicly traded shares of coal companies, plenty of people still want to buy coal for industrial use.
Going forward, coal will continue to be mined at the rate the global market demands—just under a different capital structure. And the new owners will have the same incentives as the old owners to fight regulations and lobby against emission standards. Unless activists acquire coalmines on the cheap out of bankruptcy and permanently shutter them, a series of bankruptcies alone will not lead to sharply reduced coal mining.
So, we still need coal; market forces aren’t killing it; and the EPA’s regulations will still impact American families’ budgets. Earlier this month, the director of Ohio’s EPA said that the Clean Power Plan should delay their implementation of this policy and allow for more feedback, as there is no evidence that this policy will curb the supposed impacts of climate change:
The Environmental Protection Agency cannot show any quantifiable climate change gains from its Clean Power Plan, and it overly relied on health benefits from other pollutant reductions to make a case for the regulation, Texas and Ohio officials told a House subcommittee Sept. 11.
Craig Butler, director of Ohio’s EPA, called on the federal EPA to re-release its Clean Power Plan as a proposed rule to allow it to incorporate feedback from various entities. Absent that, the federal agency should stay implementation of the final rule until all litigation is exhausted, he said.
“The EPA has not given states, especially Texas, nearly enough time to formulate and submit a state plan,” Bryan Shaw, chairman of the Texas Commission on Environmental Quality, told the House Science, Space and Technology Subcommittee on the Environment. “And all this when even the EPA acknowledges that this rule will not have a single discernible impact on climate change or sea level rise.”
Right now, the Energy Department plans to comb though the power plant regulations, which are some of the most stringent and expensive. It places 300,000 jobs in the cross hairs alone. Overall, the Clean Power Plan is projected to increase energy costs by 16 percent, and could force American companies overseas to escape the overhead, according to a study by the Institute for Energy Research.
Moreover, let’s rehash that the Clean Power Plan puts a target on the back of rural America; it could gut millions of jobs from those in the black and Hispanic community; and punishes states that voted for Romney at a disproportionate rate. It would also nuke the house budgets of those living on fixed-incomes. This isn’t just inside the beltway jargon. Most Americans already know that Obama’s green energy policy will drive their electrical costs up. More financial burdens on families and job-creating companies fleeing the extra overhead–how is this good for America again?