EPA “War on Coal” May Prove Administration Swing State Loser

 Author: Morris Beschloss | Filed under: Economics

Ever since the Environmental Protection Agency’s top lieutenant called for “bankrupting the coal industry,” earlier this year, the EPA has tightened regulations on coal usage.

Whereas previously such strictures were aimed at “outlawing” coal usage in firing up the nation’s electrical grid, new restrictions are being aimed at mining of coal, drastically cutting exports to China, India, and other developing nations. Even before undue pressure was exerted against major coal companies, who benefitted by America’s utilities using coal for 50% of its energy input, U.S. coal producers retained the patronage of steel manufacturers, overwhelmingly dependent on coal reserves for conversion from iron ore into basic steel.

But now, the all-powerful EPA, whose chairman, Lisa Jackson, has voiced lack of concern with economic consequences, is forcing the power-producing U.S. utilities to convert to natural gas post-haste. Currently, 65 utilities have been given a temporary extension, due to Administration election year pressure. But the nation’s coal-using power producers are facing conversion credit problems, as major banks are concerned with the bankruptcy specter hanging over these utilities’ heads.

As predicted in these columns late last year, the shutting down of coal mines is eliminating the export alternative, which had presented Peabody Energy, Arch Coal, and Patriot Coal with fall-back positions for enough export usage to keep coal mining viable.

With the announcement that such option is being foreclosed, Patriot Coal has declared bankruptcy, while those publicly-held major coal producers left standing are seeing their stock market prices diminish.

Unwittingly, the Administration has opened a Pandora’s Box of vehement antagonism by a number of “swing states” that harbor significant coal mining facilities. Although West Virginia is well-known for its dominant coal-mining sector, along with “hard coal” anthracite Eastern Pennsylvania production sites, as well as Montana, Ohio, and even Northwest Virginia have maintained coal mining production for well over 100 years.

An outcry of “indiscriminate” shutting down of the total coal sector by the Administration is being heard louder ever day, as valuable jobs are being lost in areas where coal mining was the one well-paid employee-retaining sector.

Since which Party controls the electoral votes of the aforementioned swing states is favored to win the presidency on November 6, the EPA could well cost President Obama the re-election.

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