Obama’s Devastating Coal Decree

President Obama’s desire to leave a strong climate legacy is destroying America’s coal towns and taking affordable energy offline for households here and abroad.

The president’s war on coal began with the promulgation of technologically unachievable air quality standards that led power companies to prematurely shut down many existing coal plants and cancel construction of planned next-generation plants that would have burned far cleaner coal — yet not clean enough to meet the unrealistic standards set by the EPA.

These regulations are already well on the way toward bankrupting the industry and destroying the hundreds of thousands of high-paying jobs it provides. But it’s not just the coal sector that loses. Coal produces nearly 40 percent of America’s electricity. As the industry is forced out of business, consumers lose, too. Denied access to cheap, abundant coal-powered electricity, everyone ends up paying unnecessarily high energy prices — indirectly as well as directly.

Now, the Obama administration is poised to inflict the coup de grace on coal — a new regulation that enshrines the environmental activist mantra: “keep it in the ground.”

The regulation places a moratorium on new coal leases of federal lands until the Department of Interior’s Bureau of Land Management conducts a more comprehensive environmental review that includes effects on climate. If that doesn’t seem like a big deal, think again. Coal production on federal lands provides nearly 40 percent of U.S. coal.

[lz_bulleted_list title=”Effects of Phasing Out Coal, 2015-2038″ source=”http://www.heritage.org/research/reports/2013/12/epa-power-plant-regulations-a-backdoor-energy-tax“]Nearly 600,000 jobs lost — more than 270,000 of them in manufacturing|Annual income drops more than $1,200 per year for a typical family of four|Aggregate Gross Domestic Product decreased by $2.23 trillion[/lz_bulleted_list]

On its face, a “comprehensive environmental review” may sound like a good thing. But in reality, it simply gives the administration another mechanism and more excuses to shut down energy production from sources they don’t like — even if the environmental or climate impact is negligible. We’ve seen this play before, with the administration’s decision to reject the Keystone XL pipeline.

That pipeline would have transported up to 830,000 barrels of crude oil per day from Canada and the U.S. to Gulf Coast refineries. The State Department’s final environmental impact statement concluded that the Canadian oil is coming out of the ground and going to market whether Keystone XL is built or not, so the effect on greenhouse gas emissions would be minuscule.

Moreover, multiple environmental reviews concluded that Keystone XL poses minimal environmental risk to soil, wetlands, water resources, vegetation, fish and wildlife. Yet the Obama administration still rejected the permit application.

With a new comprehensive environmental review, we could see the same, arbitrary decision-making. And arbitrary rejection of coal leases would keep a lot of potential energy in the ground.

For example, the BLM might decide to assess not just the effects of the actual mining itself but also the “downstream” effects, including things like:

• rail transportation from the fields to domestic energy plants or port cities;
• overseas shipping to nations such as China, the Netherlands and Brazil;
• the end use of the coal create energy.

The administration’s “Everything-including-the-kitchen-sink” regulatory reviews can always reach the desired conclusion—in this case, a trumped up justification for keeping coal in the ground. If BLM conducts its programmatic environmental reviews in this fashion, it could set a dangerous precedent for exports of other goods and services, such as road construction and manufacturing processes that environmental activists feel leave too large an environmental footprint.

[lz_third_party includes=”https://www.youtube.com/watch?v=5k7zn28RUwU”]

A big part of the problem is that the federal government owns too much land: 635 million acres, to be exact. The BLM is responsible for coal leasing 570 million acres. The federal footprint restricts economic activity and, in many instances, has even created environmental problems due to mismanagement. If Washington were to shift the regulatory authority to the states, we’d see far more efficient land use and far better environmental protection.

When speaking about energy in his State of the Union, Obama said, “Rather than subsidize the past, we should invest in the future.” Coal is the present and could be an important energy source for centuries more.

The president was right to say we shouldn’t subsidize coal. But we shouldn’t regulate it out of existence to cater to radical environmental agendas, either.

Nicolas Loris is the Herbert and Joyce Morgan Fellow in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.