Sound Bites From The 2014 NEI Coal Conference

Effectively managing the energy resources of the United States is arguably one of the most significant challenges faced by today’s public and private sector leaders.  Reliable, low-cost energy is a mission critical driver of the American Dream.  Without it, the United States will undoubtedly face increasing economic pressure. And, as a result, both the freedom and quality of life of our citizens will be negatively impacted.

Each year the Nemacolin Energy Institute hosts executives from the Coal industry to discuss the challenges to and opportunities of America becoming energy independent.  The following are paraphrased sound bites from this years conference.

Forbes Perspective

The Environmental Protection Agency didn’t let a Clean Air Act requirement that mandated technologies be “adequately demonstrated” hinder their new performance standards ruling that puts a 1,100-pound limit per megawatt hour on carbon emissions from new coal power plants. Not only is there no scientifically-supportable climate benefit for limiting such emissions, there is no viable commercial-scale technology to achieve that ideological pipedream. Even if it mattered, the most modern coal-fired plants can only reduce CO2 emissions to 1,800 pounds. What’s more, they already knew that.  Read the Complete Forbes Article

Communities Digital News Perspective

The bad news is that leaves nearly one forth (24 percent) of all coal-fired power plants left to satisfy MATS regulations within the next two years, or close. EIA says 8 percent have already opted for retirement. More are sure to come.

It’s a big deal because potential plant losses generate about 9 percent of all the electricity used in the United States today. Those plants supply about 360 gigawatt hours per year of electric consumption. In 2012, coal supplied 37 percent of U.S. electricity.

If we take out nearly one quarter of the coal plants, it will have a big impact on electric power generation in the United States over the next several years.

If most of the undecided chose to retire without replacement, then peak-usage stress put on the power grid will increase the chances of brownouts or blackouts during hot summer days or bitter cold winters in the years to come.  Read the Complete Communities Digital News Article

In my opinion, this is scary stuff.  In essence, our nation has no national policy to guide the creation and distribution of energy needed to drive sustainable economic prosperity for Americans. 

Coal Industry Overview

• Use of energy is often disassociated source of energy.
• 81% of energy comes from under the ground.
• Access to energy is fundamental to sovereign nations.
• Subsidy model to encourage alternate energy use has proven to be highly costly and ineffective over time.
• Both Spain and the UK are examples of failed subsidy experiments.
• US is going down a similar path in pushing a subsidized model.
• The energy picture in the US is changing. Natural gas is a competitor, but it is good for the country. But, there are practical limits to the contribution natural gas can make. Coal remains a mandatory resource to handle demand.
• Coal keeps the lights on in the worst weather.
• EPA rules are going to result in a meaningful deactivation of coal plants even though this last year they operated at capacity to handle the cold winter.
• Perspective is that DC wants the coal industry to be gone.
• New climate rules are estimated to cost the nation $2.2 trillion.
• Coal is the only viable way to help developing countries to improve their economy. In the developing world, coal is seen as a key to prosperity and they will use it even if they do not purchase it from the US.
• Coal is essential to human progress.
• If there is no change in the Administration, the challenges for coal as an energy source will only increase. If we have another significant cold winter you can expect rolling black outs.

Coal Industry Politics

• The President is only one branch of government even though he tends to operate as though he is the only branch. The President operates on a don’t ask for permission, ask for forgiveness basis. Until politicians are held accountable, there is no check and balance.
• The President has a right to establish an energy policy, but should not establish one that favors urban versus rural locations. For the last 20 years executive regulatory policy has punished rural based industry. The balance of power between the different branches needs to be restored (judiciary, legislative, executive).
• Industry can use local government to try and establish the required balance.
• Education of residents is important. A lot of people think electricity comes from a light socket. They don’t think about the source and the impact of legislation on availability/reliability or on security.
• Department of Justice is a tool. There is a significant amount of inertia in the Department. There is an opportunity to use DOJ as an enforcer of the law and insist on coordination of economic policies with local government.
• If you eliminate coal as a source, rural industry either cannot function or would slow down their commercial growth dramatically.
• State level regulation tends to be more responsive and practical. State government should lead to better outcomes.
• The industry should shift the debate from coal versus natural gas to talk about fossil fuels. Coal and natural gas will share a common future and the industries can help each other. Over regulation of the natural gas industry will ultimately have a negative impact on coal. Rural industries are in it together. Every place rural industry is hit hurts the chances of success for companies in those locations.
• There is no limit to what can be accomplished if you are not worried about who gets credit.
• We need to educate the public that electricity is not created in the socket.
• We are so dependent upon electricity that we take it for granted.
• Coal energy has made our country great. Coal is critical to supporting our nation’s energy needs. It is the single most important resource for transforming economies.
• Department of Energy was supposed to come up with a national plan and we are still waiting.
• Coal continues to be critical to progress.
• We can come up with a solution to environmental problems with a phased in approach. Research will show how. We need a responsible program to accomplish this. Elimination of coal as an energy source is not a viable option. Industry, science and government need to collaborate to develop the energy safely.
• Freezing in the dark is not an environmental victory.
• In PA coal delivers $7.5B to the economy.
• We need a true all of the above and below ground energy plan.
• Regulating coal out of existence doesn’t solve anything.
• Getting out of the coal business is short sighted. Doing so will increase the cost of electricity. The ripple effect is broad and needs to be better understood.
• DC is not producing an all of the above and below policy.
• You need to get your voices organized and heard. We have to go through an education process.

Coal Industry Opportunities

• In the coal industry politics plays an important role.
• The coal industry needs to get people to play well in the sandbox together.
• The ripple impact of utility plant closings is wide reaching.
• You can either have big government or a booming economy.
• Energy will be a key issue for the 2014 and 2016 elections.
• The industry needs to get on top of its messaging. It is unprepared to deal with complaints from brown outs or electricity costs.
• It is always important to put a face on the problems.
• The industry needs to begin showing the cost of decisions. People need to communicate with elected officials and share their problems.
• Nobody really understands the implications of the EPA regulation impacts.
• It is important to keep this as a human issue.
• We have created a massive dependence class by destroying jobs because of over regulation. We need a government that let’s people work.
• Energy industry messaging isn’t working and needs to be revised. Employers have a role in educating employees how over regulation is destroying jobs.
• The opposition has owned the message. The industry must create its own message.
• You can’t get an honest assessment of the industry message from the media.
• If our nation really want to address the Russian challenge, use energy export as the strategy rather than troops.
• The industry needs to collaborate with unions to get the facts out.
• The industry needs to help people to connect the dots.

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