Bluegrass Beacon: Regulatory chickens now roosting in coal country

BluegrassBeaconLogo“Did you ever wonder why people order diet sodas with cheeseburgers and large fries? Or, why we leave cars worth thousands of dollars in our driveways and useless junk in our garages? Or, why Noah didn’t just swat those two mosquitoes?” one of those useless chain emails queried from my inbox.

Not really.

But I have wondered why union bosses representing coal miners would enthusiastically endorse presidential candidates who overtly promise to “bankrupt” their industries and then feign shock and anger when the chickens carrying the consequences of such an approach arrive home to roost.

Such anger was on full display when more than 3,000 current and former coal miners led by the United Mine Workers of America (UMWA) rallied recently at the Lexington Convention Center to demand that Congress bail out their pension and health-insurance plans.

But it wasn’t Congress, unpopular though it is, that turned loose the full regulatory powers of the Environmental Protection Agency – which has implemented $10 billion in new fossil-fuel regulations and has planned an additional $10 billion worth of new rules.

It wasn’t Congress which designed unattainable air-and-water standards behind a façade of addressing climate change.

It wasn’t Congress that passed laws forcing mining companies into bankruptcy court, where fights over dwindling resources and declining pension and health-insurance benefit funds are predictably occurring.

These are the results of a president whose administration’s primary legacy will be that of unconstitutionally bypassing the representative branch of government in order to implement suffocating regulations on the path to achieving its extremist environmental agenda.

It’s the same politician who UMWA president Cecil Roberts gushed over as a candidate, claiming in May 2008 that then-Sen. Barack Obama “shares the values of UMWA members and our families” and “will implement the clear change in direction UMWA members – and indeed all American working people – must have if they are once again to move forward and have a true opportunity to realize the American dream.”

Regulations causing the bankruptcy of coal companies, loss of mining jobs and billions in wages are the stuff nightmares – not dreams – are made of.

Was it really the UMWA’s dream for Kentucky, the third-largest coal producing state, to no longer have a single union mine in production, which became the reality when Patriot Coal’s Highland Mine in Western Kentucky shut down on December 31, 2014, resulting in the last few remaining labor-union miners being laid off?

Talk about a bad dream. Are those Kentucky’s values?

EPA regulations certainly aren’t the only pressures facing our coal industry.

Still, what sector of America’s economy can withstand such a regulatory assault, considering a recent American Action Forum report showing that industries shed, on average, 8,100 jobs for every $1 billion in regulatory costs?

Other factors alone, like artificially low natural gas prices, cannot account for the loss nationwide of 180,000 mining jobs and $9.7 billion in wages in the coal industry just since Obama took office.

A slowdown in China’s demand for coal doesn’t begin to explain why at least 6,000 Kentucky coal miners have lost their livelihoods since 2008 or why another 18,000 positions indirectly tied to those jobs also were wiped out.

Reasonable regulatory policies would allow the coal industry to do what every other private-sector operation does: figure out how to adapt and compete in an ever-changing marketplace.

If it can’t, then allow it to fail as should have happened with every large financial institution and automotive company bailed out by Washington.

But coal companies should not be forced by crushing short tons of regulation to compete with one shovel behind their bent-over backs, hampering their ability to keep mines open and promises to retirees.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Is Kentucky’s coal industry being destroyed for no good reason?

Climate experts complain about research to Congress

The Heartlander is reporting that 300 climate experts are protesting climate data from the National Oceanic Atmospheric Administration (NOAA) that they claim inflates the amount of global warming which is actually occurring. The experts also take issue with the idea that carbon dioxide is involved with any small warming that might be occurring.

Highlander talks about the expert’s letter to U.S. House Science Committee Chairman Rep. Lamar Smith (R-TX), saying:

“The letter said NOAA’s research failed to comply with Data Quality Act (DQA) guidelines established by the U.S. Office of Management and Budget requiring agencies to ‘ensure and maximize the quality, objectivity, utility, and integrity of information, including statistical information.’ DQA notes it is especially important for data to be accurate and of the best quality when it involves ‘highly influential scientific assessments’ used to inform the public and shape public policy.”

For our more technical readers, the Heartlander article is worth your time.

Bluegrass Beacon: EPA rules threaten aluminum’s revival

BluegrassBeaconLogoAluminum may not cost as much as it did when special guests at banquets hosted by Napoleon III were offered a prized set of cutlery made from the metal while less-favored guests used knives and forks laden only with gold.

However, its value to Kentucky’s economy – and threats looming against it on the horizon – must be understood.

I reported in July 2012 that the Environmental Protection Agency’s regulatory jolts cast a net much wider than just over the coal mines the Obama administration promised to bankrupt.

The EPA’s proposed rules fired in the direction of Kentucky’s new and existing power plants also threaten the aluminum industry, which is attracted to regions where energy supplies are plentiful and cheap. Thus, the Bluegrass State – which has lots of coal and some of the lowest electric rates in the nation – has proven so attractive to the industry that nearly 40 percent of America’s aluminum is produced within our borders.

Just a few short years ago, not only were Century Aluminum and Rio Tinto-Alcan considering shutting down their two Kentucky smelters, but the commonwealth itself questioned whether the industry deserved help.

A 2012 report commissioned by the General Assembly concluded that in light of rising electric rates, competitive factors, the location of new smelters (China now has 120 smelters compared to the United States’ 15 such facilities, two of which are in Kentucky) and “the long-term decline of the smelter industry in the U.S., a reasonable person might wonder whether the U.S. smelter business is a good long-term bet.”

Yet the aluminum industry less than three years later is enjoying a renaissance unlike any other segment of Kentucky’s manufacturing landscape.

The industry not only kept its doors open, but it’s expanding  – not because of handouts from Frankfort, but due to some old-fashioned market magic reflecting the automotive industry’s desire for lighter-weight auto parts.

InsiderLouisville’s David Serchuk reports in an article entitled “Aluminum: Kentucky’s fast-growing stealth mega-industry” that we’re in the “beginning stages of sea changes that will result in far more cars and trucks being made of aluminum, not steel.”

Serchuk reports that the Kentucky Center for Economic Development projects the use of aluminum sheet for vehicle bodies will “increase from 200 million pounds in 2012 to 4 billion pounds by 2025.”

Contributing to such growth are plans by Ford to build the newest edition of its iconic F-150 pickup truck mostly from aluminum, resulting in a vehicle 700 pounds lighter with improved fuel economy.

Serchuk reports that aluminum production accounted for $2 billion in Kentucky’s 2013 gross domestic product, employed 20,000 Kentuckians, more than twice the bourbon industry, and paid an average – average – wage of $86,000.

Still, while talk of closing down smelters has faded, it hasn’t completely disappeared.

Lurking in the shadows are ongoing concerns about whether the EPA’s power-plant regulations, which remain “proposed” at this point, will be enacted and demonstrate that supply drives demand in reverse as well: less coal means higher electricity costs – at least 17 percent higher, according to the National Economic Research Associates.

Increased demand in the marketplace granted Kentucky’s aluminum industry a reprieve from concerns it would be forced to close its doors because of higher energy rates caused by mine closures. Still, the EPA’s stifling regulations have yet to move from the proposal stage to actual implementation.

What could happen to the commonwealth’s aluminum industry – because of what might happen to our coal industry because of what might happen to other manufacturers – when those rules actually are executed?

The very real possibility exists that an industry just beginning to flourish again might still be forced to close its smelters and move from rural Kentucky to the vast mainland of China.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Young freedom-loving citizen: Anti-coal groups need coal to get their enviro-radical message out!

Seth SchattnerYou hear so many news reports from environmental groups about how we need to stop the evil coal industry.   Coal is evil! It causes global warming! It drowns polar bears!  It will turn you into a mutant!

A lot of these activists need to stop and think about how they themselves rely on coal no matter how much they protest otherwise.

What powers the computer that these environmentalist bloggers use to slam coal?  Electricity.

What powers the lights of these studios that activists use to rail against coal’s carbon footprint?  Electricity.

What powers the machines that make the clothing for all these activists?  Electricity

Coal provides around 95 percent of our state’s electricity and 56 percent of the nation’s electricity.  It’s cheaper to harness than a lot of other forms of energy that these environmentalist groups suggest such as solar and wind.

Isn’t it kind of self-defeating for these groups to rail against coal when they wouldn’t be able to get their message out without it?

Lexington resident Seth Schattner received a bachelor’s degree in marketing from Northern Kentucky University in December 2012. 

Quote of the day: Why don’t this administration’s enviro-radicals tell us what they really think of fossil fuels?

“I suspect that cheap gas is just what we don’t want because it will make it very hard for renewables to compete and send the entirely wrong price signals to anyone thinking of investing in alternative energy technologies. I think that what we want is expensive gas and a ban on coal fired power unless carbon is captured and stored. That way gas can be a ‘bridge fuel’ while alternatives are developed, no?” –Samuel S. Myers, a doctor and research scientist at the Harvard School of Public Health and Harvard Medical School, in emails obtained by the Independence Institute through a Freedom of Information Act request seeking emails between Martin and others using a personal, non-official email address to conduct official EPA business.

Are we killing coal just for left-wing politics?

The Washington Times ran a remarkable story last week, “Greenpeace co-founder says ‘no scientific proof’ humans cause climate change.”

The Times reports:

“Patrick Moore, a Canadian ecologist who was a member of Greenpeace from 1971-86, told members of the Senate Environment and Public Works Committee environmental groups like Greenpeace use faulty computer models and scare tactics in further promoting a political agenda.”

Moore points out:

“The fact that we had both higher temperatures and an ice age at a time when CO2 emissions were 10 times higher than they are today fundamentally contradicts the certainty that human-caused CO2 emissions are the main cause of global warming.”

Wow!

This from a Greenpeace guy who left because the organization took a sharp political, not scientific, turn to the left.

Coal is in those lefties’ sights. Science, per Mr. Moore, not so much.

BIPPS joins nationwide coalition in calling for an end to federal subsidies for ‘unproven and unproductive’ wind energy industry

Federal handouts for the wind energy industry are scheduled to once again expire at the end of this year.

The Bluegrass Institute has joined more than 100 other organizations, including the Beacon Center of Tennessee, Commonwealth Foundation, John Locke Foundation, Independence Institute, Maine Heritage Policy Center and Freedom Works, in calling on Congress to “break from the past and allow the wind production tax credit (PTC) to expire as scheduled, once and for all.”

“Americans deserve energy solutions that can make it on their own in the marketplace—not ones that need to be propped up by government indefinitely,” the letter states.

The federal government should not be giving away millions of taxpayer dollars to an unproven and unproductive energy source while at the same time unleashing its regulatory raiders on Kentucky’s coal industry.

“The wind industry has very little to show after 20 years of preferential tax treatment; it remains woefully dependent on this federal support,” the letter further states. “Yet despite this consistent under-performance, Congress has repeatedly voted to extend the PTC, usually in 1- or 2-year increments. This past year, Congress dramatically expanded the credit in addition to extending it.”

It’s time for such nonsense to end.

 

 

Why battle poverty when you can have a war on coal?

BluegrassBeaconLogoIt was only a few months before his tragic death when, in the winter of 1968, Sen. Robert F. Kennedy travelled to eastern Kentucky to investigate one of the most poverty-stricken areas of the nation.

At a time when the federal government was waging a “war on poverty,” 98 counties in Appalachian coal country were considered among the poorest in the nation. And in Perry County, near where Sen. Kennedy briefly stopped on his poverty tour to address the media, more than 60 percent of residents lived below the poverty line.

“There is no real hope for the future amongst many of these people who work hard in the coal mines,” Kennedy professed to residents. “And now that the coal mines shut down, they have no place to go.  There’s no hope for the future…” [Read more…]

Coal exports unleash worldwide economic power beneath Kentuckians’ feet

When Mark Twain read his (obviously) premature obituary in the New York Times, he famously quipped: “the reports of my death are greatly exaggerated.”BluegrassBeaconLogo

Now more than 100 years later, some of Kentucky’s most radical environmentalists have read the tea leaves concerning the recent loss of thousands of coal-mining jobs in Kentucky and are gleefully gearing up for a celebration of the industry’s demise.

But they might want to put away the party hats. Coal, including coal mined in Kentucky, isn’t going away. Instead, it’s going to other countries.

A new report compiled for the National Mining Association states that a record 107 million short tons of U.S. coal were exported in 2011.

So while Kentuckians continue to enjoy the direct benefits of Kentucky coal – like cheap energy rates and the jobs they provide in the energy-intensive aluminum and stainless steel industries, we also are reaping some mountain-sized indirect benefits as huge amounts of black rock are shipped to places without an EPA.  [Read more…]

Letter: Kentucky should take pride in governing itself

This letter was published in the Lexington Herald-Leader on June 15, 2013.

Sovereign pride

Kentuckians are proud to live in a commonwealth rich in tradition and resources. However, I find it disconcerting that while we take pride in basketball, horses and bourbon, we often fail to take pride in state sovereignty.

When it comes to Kentuckians governing themselves, why do we seem content to sit on the sidelines and take orders from unelected bureaucrats spewing unilateral regulations from hundreds of miles away?

Why, for instance, do Kentuckians allow federal Environmental Protect Agency officials to dictate terms and conditions for how Kentucky utilizes coal, our state’s primary natural gift?

The EPA employs two primary tactics to hinder producers from providing jobs and low-cost energy.

First, it has stalled the permitting process for mine openings and expansions, causing uncertainty among investors, owners and miners. Second, the agency now requires expensive retrofits for coal-fired power plants that don’t even come close to offering sufficient economic benefits compared to the costs incurred.

Given the fact that Kentucky is a poor state in a struggling global economy, why are Washington bureaucrats allowed to strangle an industry that provides 93 percent of the commonwealth’s electricity and attracts energy-intensive industries — and the multitude of jobs they create — to the Bluegrass state?

The virtues and pitfalls of coal will always be debated. But one thing is certain: decisions about Kentucky’s resources should be made by those most affected — Kentuckians.

Logan Morford

Bluegrass Institute for Public Policy Solutions

Lexington