By Tom Borelli, National Center for Public Policy Research
The coal industry is enduring an unprecedented assault, one that has been led by President Obama and aided by powerful ideological and business allies. The accumulating political and regulatory pounding is threatening to push the coal industry over the tipping point, jeopardizing thousands of jobs, and denying consumers a cheap, domestic and reliable source of electricity.
Obama’s attack on the coal industry is, however, not a surprise. In fact, the president’s revulsion for coal has been consistent, unrelenting and crystal clear. Before he was elected president, then-candidate Obama openly expressed his feelings about coal in a 2008 interview with the San Francisco Examiner. In that interview, Obama said, “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.…”
At that time cap-and-trade legislation was Obama’s favored policy and during the same interview he said, “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”
Looking back, it’s important to note Obama was completely comfortable with advancing policies that – even by his own analysis – would force energy prices higher and potentially bankrupt companies. Unfortunately, years later with unemployment rates over nine percent, and as we struggle to recover from the worst economic crisis since the Great Depression, Obama remains fully committed to his anti-coal agenda and its deleterious consequences.
Following the 2008 election, cap-and-trade was on the legislative fast track. With a significant political advantage because of commanding majorities in both chambers of Congress, cap-and-trade almost became law.
In May of 2009, the Waxman-Markey bill passed in the House of Representatives by a narrow margin. However, cap-and-trade eventually died in the Senate when Senator Lindsey Graham (R-SC) stopped flirting with Democrats and broke off negotiations over legislation to limit carbon emissions. In February 2010 it was reported he said in a meeting “cap-and-trade is dead.”
Obama’s cap-and-trade plan came dangerously close to becoming law because a number of large corporations joined with environmental advocacy groups to lobby for the law. Companies such as General Electric, Dow Chemical, Duke Energy, and Exelon among others joined with advocacy organizations including the Natural Resources Defense Council (NRDC) and the Environmental Defense Fund to push for cap-and-trade as part of a lobbying coalition – the United States Climate Action Partnership (USCAP).
General Electric had a clear profit motive for wanting cap-and-trade. The company wanted to price carbon – that is make fossil fuels more expensive by law – in order to make its renewable energy products such as wind turbines and solar panels more cost competitive with fossil fuel energy sources for electricity. Their actions effectively encouraged the use of government force to legislate a tax on coal, allowing some to cash in on Obama’s anti-fossil fuel agenda
A 2007 Supreme Court decision compounded the situation by opening the door for the Environmental Protection Agency (EPA) to regulate the emission of greenhouse gas emissions under the Clean Air Act. Recognizing the threat of impending EPA regulations some companies jumped on the cap-and-trade legislative bandwagon. They hoped legislative action to control carbon emissions would preempt the need for EPA’s action.
ConocoPhillips, for example, preferred to take their chances by trying to influence legislation that would minimize regulatory impacts on their business through USCAP, rather than having little influence on the EPA’s plan to regulate greenhouse gases.
ConocoPhillips’ gamble failed because the Waxman-Markey cap-and-trade bill was found to be unfavorable to its business – the company abandoned support for the legislation and ended its membership with USCAP.
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