The Register-Herald, Beckley, West Virginia

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June 10, 2014

U.S. chamber official criticizes EPA carbon plan

Carbon reduction regulations will hamper the market for coal in the U.S. and cause electricity rates to skyrocket, according to the U.S. Chamber of Commerce’s Senior Director for Communications and Media.

Matt Letourneau, who was speaking at the West Virginia Manufacturers Association Leadership Conference at Glade Springs, said the new regulations paint a darker picture for coal’s future.

“There’s probably not any good news out of the carbon emissions regulations,” Letourneau said. “There’s very little chance that it’s going to be a positive for West Virginia. No chance.”

The bad news for West Virginia will get worse for consumers, who could see a spike in electricity bills because of compliance costs for power providers.

Letourneau predicted that if base business costs like electricity go up, then the cost of products will rise and consumers will have less disposable income.

The bright spot for the Mountain State, the largest coal producer east of the Mississippi River and the second largest in the country, lies deep underground in the form of natural gas found in the Marcellus and Utica shales. The shales are prominent in the north central and northwestern parts of the state, and were formerly thought to be too deep to tap.

Letourneau said that the trade-off for jobs is not one-to-one, however. For one thing, the current location of drilling is not in southern West Virginia, where most of the state’s coal is mined. And if coal-fired power plants close, new plants fueled with natural gas are not likely to be in the same locations.

He won’t count coal out of the energy production picture altogether, though. Even the Environmental Protection Agency standards maintain coal as 30 percent of the energy production equation by 2030, when carbon emissions are supposed to be decreased by 30 percent.

The nation’s demand for energy is going to continue to be on the rise, Letourneau said, up about 9 percent. Globally, it will go up a lot more than that, he said.

Developing countries like China and India have a growing demand for electricity. In 2012, 45 percent of the state’s coal was shipped to other countries, according to the U.S. Energy Information Administration.

With about 250 years of coal supply left in the ground, Letourneau said, demand for coal to meet the demand for electricity could go up, “absent regulation.”

The EPA’s carbon emissions reduction plan, announced last week, is actually 49 different regulations for 49 states, Letourneau said. Vermont is not included because it has no coal-fired power plants. West Virginia’s target is a 20 percent reduction, at least for now, he said.

“After a year they can come back and change it all,” he said. “It’s very much a moving target.”

Even if the U.S. hits all the standards in the appointed time, the global effect is minimal compared to the countries, like China and India, that are firing up power plants and burning coal with no emission standards, Letourneau said. The U.S. has already reduced emissions more than any other country, he said.

The cumulative effect of the U.S. regulations on a world-wide scale is a mere 1.4 percent, he said.

“It doesn’t make sense to do that for our own economy, absent commitments elsewhere,” Letourneau said.

And Letourneau fears that once natural gas production is booming in the state, more regulations for that industry will develop, as well. He said the U.S. Chamber is currently fighting local ordinances in Colorado, where the regulations are a ballot initiative.

The “boom” is threatened by local and state actions in other places, he said, “not so much here.”

Opportunities associated with drilling in deep shale are “huge,” Letourneau said. But he warned that those “could be squandered if we’re not careful, if we’re not vigilant about it, if we don’t make decisions that make sense.

“The EPA is lurking out there,” he said. “The federal government is lurking out there.”

State regulators have been doing a good job of keeping up with shale drilling, he said.

“We’ve seen a lot of progress in Pennsylvania and Ohio,” Letourneau said. “We don’t need a one-size- fits-all standard because the geology is very different from place to place.”

Letourneau said local community concerns about the effects of hydraulic fracturing, or “fracking,” combined with horizontal drilling are unfounded, although he said he would not be dismissive of those concerns.

He said there has been no evidence that fracking and horizontal drilling cause earthquakes, although those events have happened near drilling sites, nor has water been contaminated with fracking fluids ejected into the ground at drill sites.

“Obviously, we understand why folks are concerned,” he said. “The incentive is there (for the industry) to make it as safe as possible.”

Letourneau said states where deep drilling is occurring have been eager to hire inspectors with the revenue increases from the drilling operations.

“Common sense regulation will help drive activity where it makes the most sense across the board,” he said.

— E-mail: ppritt@register-herald.com

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