Obama's War on Coal Raises Energy Prices Despite Falling Natural Gas Costs

Obama's War on Coal Raises Energy Prices Despite Falling Natural Gas Costs

President Obama’s “War on Coal” has made it so difficult for electricity producers to use that the percentage of our nation’s electricity coming from coal has plunged from 44% last year to 36% this year

This forced reduction in a critical source of electrical power has more than cancelled out the dramatic reduction in the price of natural gas, another major source of our electrical power. As a result, for the first time in over two decades, electricity rates around the country are rising this summer.

Back in January, 2008, when coal accounted for 49% of our electrical power generation, candidate Barack Obama was caught on audio tape making this statement:

What I’ve said is that we would put a cap and trade system in place that is as aggressive, if not more aggressive, than anybody else’s out there.

I was the first to call for a 100% auction on the cap and trade system, which means that every unit of carbon or greenhouse gases emitted would be charged to the polluter. That will create a market in which whatever technologies are out there that are being presented, whatever power plants that are being built, that they would have to meet the rigors of that market and the ratcheted down caps that are being placed, imposed every year.

So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.

So if somebody wants to build a coal-powered plant, they can.

It’s just that it will bankrupt them. [emphasis added]

The Associated Press’s recent description of the “unexpected” rise in electricity rates accurately notes both the rise in retail electricity prices and the drop in natural gas prices.

This may reverse what has been a gradual decline in retail electricity prices. Adjusted for inflation, the average retail electricity price has been drifting mostly lower since 1984, when it was 16.7 cents per kilowatt-hour…

Natural gas has plummeted in price because of a dramatic increase in U.S. gas production over the past few years and a warm winter that allowed supplies to build up.

But reading the rest of the Associated Press article, you would be hard pressed to identify Obama’s destructive coal policy as the real culprit:

The recent heat wave that gripped much of the country increased demand for power as families cranked up their air conditioners. And that may boost some June utility bills. But the nationwide rise in electricity prices is attributable to other factors, analysts say:

In many states, retail electricity rates are set by regulators every few years. As a result, lower power costs haven’t yet made their way to customers.

Utilities often lock in their costs for natural gas and other fuels years in advance. That helps protect customers when fuel prices spike, but it prevents customers from reaping the benefits of a price drop.

The cost of actually delivering electricity, which accounts for 40 percent of a customer’s bill on average, has been rising fast. That has eaten up any potential savings from the production of electricity.

Phil Kerpen, President of American Commitment, a conservative activist group designed to “fill the gap” between conservative think tanks and grassroots organizations, has been tracking President Obama’s “War on Coal.” Here’s his much more lucid explanation for the current rise in retail electricity prices:

The lynchpin of the Obama’s War on Coal is the so-called Utility Maximum Achievable Control Technology (Utility MACT) rule, also known as “Mercury and Air Toxics Standards” or “MATS.”  The rule requires expensive retrofits at coal-fired power plants, raising electricity prices nearly 20 percent with no environmental benefit.

The cost, according to EPA’s own estimate, is $10 billion per year.  A more realistic analysis from the National Economic Research Associates found compliance costs of $21 billion per year, with 183,000 lost jobs per year.

Worse, if the rule stands it will combine with Obama’s new greenhouse gas rules to shut down all coal-fired power plants in America, a genuine economic catastrophe that will make prices “necessarily skyrocket” and undermine the reliability of our electric grid.

In 2008, coal supplied 49% of our electrical power. Today, three and a half years into Obama’s presidency, President Obama has succeeded in cutting coal’s share of our electrical power production to 36%. With the assistance of a Democrat-controlled Senate and a few RINO Senators, he’s well on his way to fulfilling one of his campaign promises–bankrupting the coal industry and skyrocketing the retail price of electricity.

We’ll see in November if the voters want to continue these policies.

Michael Patrick Leahy is a Breitbart News contributor, Editor of Broadside Books’ Voices of the Tea Party e-book series, and author of  Covenant of Liberty: The Ideological Origins of the Tea Party Movement.


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