Missouri’s Stake in the Energy Debate
The American Energy Freedom Center recently released its State Power Rankings for 2010. Missouri ranked 5th with a retail electricity price of 6.22 cents/kwh. Missourians should understand that this low affordable price is not by accident. Coal produces 81 percent of the baseload electricity in Missouri’s energy portfolio. Nuclear power provides 11.6 percent, followed by natural gas at 3.8 percent and 2.2 percent of hydropower.
Nationally, coal produces approximately 48 percent of our electricity. The United States has an abundance of coal deposits across the country, yet the federal government, under pressure from environmental special interest groups has declared an all out assault on coal based energy. The Environmental Protection Agency has produced draconian greenhouse emission regulations designed to force power generation away from coal toward alternative sources of energy that are expensive and unreliable.
US Senators Kerry and Lieberman have introduced carbon cap and trade legislation that by all accounts will raise the cost of electricity for virtually all American families and businesses. States that have coal based electricity like Missouri will be the hardest hit as government regulations ratchet down the carbon dioxide emissions produced by power generators.
The most recent study of the Kerry-Lieberman bill produced by the American Council for Capital Formation (ACCF) indicates that residential electricity prices by 2030 would be between 29.3 to 42 percent higher. Gasoline prices would also be higher; up to 15.2 to 18 percent under the baseline forecast (or 60 to 71 cents per gallon cents in inflation adjusted dollars in 2030).
According to the ACCF study, employment is negatively impacted by Kerry-Lieberman, even when additional “green” jobs are factored in. Over the 2013 – 2030 period, total U.S. employment averages between 351,944 and 497,180 fewer jobs each year under the low and high cost scenarios than under the baseline forecast.
The American manufacturing sector is hit the hardest as more companies would move overseas to more affordable business environments to produce goods and services. In effect, this type of legislation and regulation results in American economic unilateral disarmament and reduces our ability to compete in the global market place. No other nation will impose these burdens on their citizens. For example, China has surpassed the United States in energy consumption, especially coal based energy, in their quest to be the dominant economic force in the world. That is why the carbon dioxide regulations are economic unilateral disarmament.
Some environmentalists argue that coal power plants increase air pollution. They fail to mention that with innovative clean coal technology, air quality has improved significantly over the past 40 years since the Clean Air Act was enacted. A relatively simple retrofit of our oldest power plants could improve the efficiency of the electricity generation and reduce emissions.
Since 1984, the Department of Energy has been studying various types of clean coal technology. Thirty-three demonstration programs have proven the effectiveness in providing reliable electricity and reducing the emissions of pollutants into the atmosphere. An aggressive, comprehensive clean coal efficiency improvement program could have substantial impact on US electricity supply. With little or no increase in CO2 emissions, it would be the equivalent of building about 90 new 500 MW coal plants, and it could be accomplished within ten years.
The major economic benefits of such a program would result from the large increase in inexpensive coal-fired electricity. This increment would have both supply-side and demand-side benefits and would result in the creation of 250,000 (or more) net new jobs annually – in addition to the power plant retrofit construction jobs created.
We, in America, have to produce more goods and export more goods to reverse the decades-long atrophy of its manufacturing sector. The U.S. can no longer afford to shift energy-intensive production abroad, and requires reliable, affordable electricity to regain its economic competitiveness. The bottom line is that clean coal technology based power generation is the most cost efficient means to produce the electricity that Americans demand and deserve for jobs, competitiveness, and a positive quality of life. As one of AEFC’s top ten states for affordable electricity, Missouri is in a good position to take the lead in developing clean coal technology and help American families get back to work.
George Allen is a former Governor and U.S. Senator of the Commonwealth of Virginia. He currently serves as Chairman of the American Energy Freedom Center
