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Double Trouble in Washington for King Coal

Having suffered one blow in Washington D.C. this week, King Coal faces another one next week.

Coal fired power station
Malcolm Fife | Photodisc | Getty Images
Coal fired power station

A resolution in the US Senate seeking to overturn federal regulations that limited toxic mercury and other dangerous emissions from coal-burning power plants failed to pass June 20, with 46 votes for and 53 against. Only five of the Senate’s Democratic majority supported the resolution.

Next week, the Environmental Protection Agency, EPA, unleashes its war on coal on June 25, which holds that any new coal plants built cannot emit more carbon dioxide than a natural- gas plant of comparable size and capacity.

According to the EPA, some 56 percent of coal-fired plants already in existence have the equipment necessary to meet the new requirements. For those that do not, there is a three-year deadline to meet cleaner requirements, with a possible two-year extension in certain cases.

The latest round in thewar on coalis environmentally sound, say analysts, but the lack of subtlety in getting rid of this dirty energy step child is destructive; what's more natural gas would eventually triumph over coal without hard-hitting regulations.

Natural gas creates half of the carbon dioxide emissions for the same amount of electricity produced by coal. The catch is that in order for a coal plant to meet this carbon dioxide emissions level it must actually burn more coal to allow for the process of diverting its carbon dioxide emissions. In other words, the regulations are meant to ensure that no new coal plants can be built.

Proponents of the Obama administration’s war on coal stress that this is a necessary move for reasons of public health and the environment. Certainly, they are correct. Coal is a nasty power source that has no place in today’s world.

In terms of public health, the EPA estimates that its proposed regulations will result in $90 billion in health care savings annually and, more specifically, prevent 11,000 premature deaths, 4,700 heart attacks and 130,000 cases of childhood asthma every year.

Opponents of the EPA’s proposed regulations argue that the war on coal will cost more jobs than America can afford to lose, and that it will result in an increase in energy prices. Job losses are inevitable, and there is a strong chance that the immediate result could be a temporary increase in energy prices.

The EPA’s plan is a massively expensive one; the agency estimates it will cost $9.6 billion in 2015 — costs that would be passed on to the consumer causing temporary increases in electricity prices.

Nevertheless, the coal-emissions regulations were a key point in President Obama’s state of the union address in January, and the passage of the Senate resolution to reverse the EPA’s proposed regulations would have been a slap in the face for the incumbent.

Interestingly, Senator Jay Rockefeller's (D-West Virginia) came out in support of the EPA’s regulation despite the general consensus against the “war on coal” in West Virginia.

He made a significant point: "I don't support this Resolution of Disapproval because it does nothing to embrace coal's potential," Rockefeller said. "It moves us backward, not forward. And unless this industry aggressively leans into the future, coal miners will lose the most. It's not too late for the coal industry to step up and lead by embracing the realities of today and creating a sustainable future. We need a bold partner, innovation and major public and private investments."

It is unfair to blame the closure of coal plants on emissions regulations alone — coal’s biggest enemy right now is natural gas. But herein we can find another point about the Obama administration’s effort; it needs to be approached with much more subtlety, which is rare in an election year, allowing more room for the market to take its natural course, which is increasingly anti-coal.

—This story originally appeared on Oilprice.com.

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