Someone Really Should Explain to Mitt Romney How Markets Affect Coal

Categories: Biz, Politics

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If your debate-watching drinking game included a shot for each use of the word "coal," you either peed on your roommate's couch or had your stomach pumped. Or both. The primitive fuel was invoked some 22 times, apparently, mostly by Republican presidential candidate and former Massachusetts Governor Mitt Romney. Our energy future is an all-of-the-above, leave-no-fossil-unburned strategy, unless you're Romney, in which case wind energy jobs don't actually exist, and solar is an unending money pit (someone should tell the Chinese).

You're probably familiar with this by now. And I do realize that Willard and his running mate have turned these debates into dazzling displays of bald-face mendacity. But there was one claim last night that I simply couldn't let stand:

"I was in coal country," Romney intoned. "People grabbed my arms and said, 'Please save my job.' The head of the EPA said, 'You can't build a coal plant ... it's virtually impossible given our regulations.'"

What EPA Administrator Lisa Jackson actually said was that the hardships facing coal are "entirely economic." Odds are, Romney knows what he said is absolute malarkey. The point is, Jackson was right. Coal's getting its ass kicked, for sure, but it's not EPA regs doing the kicking. It's natural gas. The stuff is cheap as hell these days thanks to the shale gas boom that has transformed the American energy ledger over the last four or five years.

The future of coal cannot be extricated from its role as a fuel source for power plants. In a lot of places, including Texas, natural gas sets the price of electricity. Coal-fired power plants make their money on the margin. When the margin between the price of gas and cheap coal is wide, like it was in 2008, they rake it in. When the price of natural gas falls and the margin gets thinner than Romney's tax plan, coal-fired plants sometimes don't make enough profit to even bother generating electricity. If you'll recall, Dallas-based Luminant recently announced it was going to idle two coal-fired units at its Monticello plant (the very same units it threatened to shut down summer before last over EPA regs).

Say the wonks over at the Brattle Group (who study this kind of thing) the war on coal is being waged by the market, not Obama. What's weird is that they predict coal-fired plants in Texas will actually do better in the coming years, not because they think Obama is going to get his ass kicked in November, but because the price of natural gas is predicted to rise.

Somebody really ought to explain this to the private equity guy representing the GOP. Of all people, he should know.


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25 comments
turko102
turko102

Sorry Brantly....but the GOA (you know...that third party independent Government Accountability Office) itself said that it found that as many as 12 percent of coal-fired power plants may be closed because the EPA regulations make it too expensive for power companies to operate them, despite coal being one of world’s cheapest fuels.  So in essence Romeny was correct.... it's an economic factor that is based on EPA standards.  And that's from the nonpartisan agency working for Congress.  Lisa Jakson was appointed by Obama...so you got some bias here.

gmit
gmit

The fucked up thing about not only BOTH candidates but the majority of the general public is the failure to realize the inter connectivity of our world and the sheer volumes of trade and world markets, people really like to feel like what they do matters and really the cumulative forces of this world and namely people not living in the great United States of America have way more effect than some pin head in Washington DC

gmit
gmit

What everyone is missing is the decline in Coal the good expensive coal is more related to the demand or drop in demand in expanding countries like China not expanding as they were previously.

 

It takes lots of really good high grade coal to make steel, you only need lots and lots of steel if you building lots of new tall buildings and highways

fedup
fedup

AHHHHHHHH Liberalism, the philosophy of STUPID people!!!!!!!!!!!!!!!!!! 

Myrna.Minkoff-Katz
Myrna.Minkoff-Katz topcommenter

Someone should really explain to Mitt that he's running for President of the United States, not Boss of the United States.

scottindallas
scottindallas topcommenter

It's really sad.  Romney might well be far and away the better candidate for the job, but his candidacy is a nightmare.  What does he stand for, what's he gonna do?  it's a total pig in a poke.  I'm sure he understands what you're arguing, though he may never let on.  This whole political process is awful.  His lower tax scheme will destroy capital production even more--I seriously wonder if he understands this at all.  But, on most things he's likely quite reasonable, though, we're left to simply guess.

ChrisYu
ChrisYu

'solar is an unending money pit someone should tell the Chinese'

yeah i bet the chinese solar workers are getting great wages and benefits. and paying union dues.

sidewalkastro
sidewalkastro

I think Romney know perfectly well why coal is in trouble. He is going after the low information voter who doesn't know shit from shinola.

Montemalone
Montemalone topcommenter

Exxon wants to export gas, so that means price go up.

So much for drill baby drill our way to free a/c.

pak152
pak152

"Coal's getting its ass kicked, for sure, but it's not EPA regs doing the kicking. It's natural gas." yes NG is cheap, but EPA regulations are definitely affecting the coal and power generating industries.Obama and his EPA minions have done everything possible during the last four years to eliminate coal. Thank goodness Shale gas came along

"According to Moody’s, coal power plant demand will decline by 100 million tons by 2020 because of EPA’s regulations. According to Moody’s vice president and senior analyst Anna Zubets-Anderson, “A regulatory environment that puts coal at a disadvantage along with low natural gas prices have led many utilities to increase or accelerate their scheduled coal-plant retirements. In addition, newly proposed U.S. carbon dioxide regulations would effectively prohibit new coal plants by requiring new projects to adopt technology that is not yet economically feasible.”[ii]"

http://www.instituteforenergyresearch.org/2012/07/16/obama-energy-policies-are-working-patriot-coal-goes-bankrupt/

MTBCclogs
MTBCclogs

@Dallas_Observer It wasn't what EPA , it was what BO said. You can build a coal plant but it will go bankrupt trying to meet our regs #moron

scottindallas
scottindallas topcommenter

 @turko102 I'm no fan of Lisa Jackson.  But, coal, while cheap is more expensive than natural gas, and more polluting.  The EPA is clamping down on particulates and CO2, coal is bad on both fronts.  Again, we don't use firewood anymore either, nor did we stay in the stone age cause rocks were cheap. 

EdD.
EdD.

 @fedup Damn that liberal "free market" and "supply and demand"!

carthur27
carthur27

 @scottindallas When you voted for Obama in '08, did you bemoan all those things you didn't know about him? 

scottindallas
scottindallas topcommenter

 @Montemalone Exporting gas is very expensive if it's not piped.  That should mitigate the volume of gas that leaves.  Though fracking wells have been petering out more quickly than these firms have been projecting, so this whole thing is undetermined

scottindallas
scottindallas topcommenter

 @pak152 the same could be said of using firewood for heaters (boilers and the like)

znobmore
znobmore

 @pak152

 Curious whether the regulations to which you refer are specifically aimed at coal, or have a disproportionate impact on coal because it contributes considerably more air pollutants.  My guess would be the latter rather than the former, but I am open to be convinced otherwise.  If coal is put at a disadvantage because of neutral environmnetal regulations which are protective of human health, but apply indiscriminately to all fuel sources, I see no reason to complain.  That's the government doing its job -- protecting its citizens and ensuring their health and welfare.  If the regulations re specifically aimed at certain industries, I see reason to cry foul.

scottindallas
scottindallas topcommenter

 @carthur27 But Obama didn't flip flop as Romney has in the last month or so.  Further, Obama did campaign in a very dynamic environment, with the economic collapse.  It is fair to date some of his campaign promises, as such a changing world would affect his promises.  I'm no fan of the president, but Romney will destroy this economy.  By the way, how do revenue neutral tax cuts stimulate the economy?  If they don't put more money in the hands of consumers then they're of little affect, according to the theory. 

scottindallas
scottindallas topcommenter

 @carthur27 I didn't vote for Obama.  I predicted then that he wouldn't change much.  He used vague rhetoric and had become a Rhorshach test for most voters.  He never articulate a clear agenda, and put no meat on the bone.  I voted libertarian.

carthur27
carthur27

 @scottindallas  Firewood isn't a major component of our energy.  The EPA regulations specifically target the coal industry.

scottindallas
scottindallas topcommenter

 @marshall67  @carthur27 I know his plans, but the question is how that will stimulate the economy.  In every permutation the rich will get more tax breaks than the middle and lower classes, and in every case the deficit will be far larger, lest he raise more new taxes, or kick the burden on to the states.  But, the claim is that he's doing this to stimulate the economy.  It won't and can't if it takes money from the middle class.

marshall67
marshall67

 @scottindallas  @carthur27 Romney's revenue neutral tax policy reduces taxes for everyone and reduces deductions by the same amount. The majority of folks to be hit by this will be the rich who claim far more in deductions than us middle class.

Double-O-Joe
Double-O-Joe

 @carthur27  @scottindallas 

No.  EPA regulations specifically target generators of pollution.  Coal power generates vastly more pollution than other sources.  Therefore, coal power generators are more likely to run afoul of the rules.  "Clean coal" is a lie thought up as part of a PR effort.  Coal power is dirty, inefficient, and expensive, and the sooner it's phased out, the better off we'll all be. 

scottindallas
scottindallas topcommenter

 @carthur27 That's not so certain, and firewood WAS a major component of home heating and cooking for many years.  Coal was an improvement.  Now, other technologies are better. 

 

Your critique is like rebutting someone using the buggy whip analogy, saying, but buggy whips aren't a big part of our transport any more.  No Shit.  that's my point

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