Bloomberg News

Republicans Bring Charge of Obama ‘War on Coal’ to Virginia

July 16, 2012

Republicans took their complaints about President Barack Obama’s rules to curb pollution from coal power plants to rural Virginia, saying the regulations will harm the economy of the election battleground state.

Joining the lawmakers at a hearing in the coal-dependent southwest corner of the state were representatives from coal miner Alpha Natural Resources Inc. (ANR:US), power generator Dominion Resources Inc. (D:US), and a unit of energy holding company PPL Corp. (PPL:US) The executives said the Environmental Protection Agency’s proposed greenhouse-gas rules would effectively prohibit the construction of new coal-fired plants, leading to job losses and higher electricity costs.

“Under this proposal, I don’t see a way forward” for new coal plants, John Voyles, vice president of LG&E and KU Energy LLC, a unit of PPL, told a panel of the House Energy and Commerce Committee today in Abingdon, Virginia. The regulation would require that coal plants have carbon-capture technology, which is “currently undemonstrated” and “not cost-effective under current market conditions,” he said.

In March, Obama’s Environmental Protection Agency proposed the first limits on greenhouse-gas emissions from power plants, setting a standard that natural-gas facilities can meet. With natural gas near decade-low prices, no new coal plants are being built, with or without the EPA rules, according to the agency’s analysis.

Latest Rules

By establishing that standard, however, it will start prodding the nation away from relying on coal-fired electricity, the biggest source of the carbon dioxide that contributes to global warming, while encouraging economic growth, supporters say.

“The new standard reinforces what most power company executives and investors already understand -- that carbon pollution and climate change are serious concerns,” David Doniger, climate policy director for the Natural Resources Defense Council, said in a statement. “If and when new coal plants make a comeback, they will need to be designed with carbon-capture and storage technology.”

For critics, from mining companies and utilities to coal- country lawmakers, the rules are the latest in a string of EPA regulations they say are meant to put the fossil fuel out of business. And Republicans in crucial electoral states such as Pennsylvania, Ohio and Virginia are using that threat to take aim at Obama and his fellow Democrats.

‘Cure, Cause’

“Under President Obama, the Environmental Protection Agency has cranked out one costly anti-coal regulation after another,” Representative Ed Whitfield, a Kentucky Republican, said at the hearing. “The agency tells us we need these measures to protect us from global warming, but in my view the cure is considerably worse than the disease.”

Coal had provided as much as half the electricity in the U.S. in recent years and more than 86,000 mining jobs. The boom in natural gas extracted by hydraulic fracturing, or fracking, is already cutting into coal’s primacy, as the two fuels generated the same share of electricity production in April for the first time.

Main Complaints

The EPA rules may further reduce coal’s share.

The industry critics made two main complaints about the EPA’s proposal today. They said the EPA, for the first time, issued a standard for all power producers, regardless of fuel type. Instead, the agency should revise the rule, issuing one standard for coal plants, and another for natural-gas facilities. Gas emits about half the carbon dioxide as coal when burned for fuel at a plant.

“The adoption of EPA’s proposed standard will lead, in our view, to an undesirable national policy: abandoning coal, one of our most abundant natural resources,” said Thomas Farrell, chairman and chief executive of Dominion.

The agency also has issued this proposal for new power plants, and not for existing ones. The industry executives warned that rules for existing coal plants, if they are structured in a similar way, could be more damaging.

Obama, who captured 53 percent of the vote in Virginia in 2008, campaigned in the state for two days this past weekend, visiting suburban areas of Richmond and Washington, D.C. The president held a 3 percentage point lead over the presumptive Republican candidate, Mitt Romney, in an average of six polls taken since mid-May, as compiled by the website Real Clear Politics.

“If we win Virginia, then we will win the election,” Obama said in a weekend interview with WAVY-TV in Glen Allen.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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Companies Mentioned

  • ANR
    (Alpha Natural Resources Inc)
    • $2.28 USD
    • -0.20
    • -8.77%
  • D
    (Dominion Resources Inc/VA)
    • $69.26 USD
    • 0.17
    • 0.25%
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