Economy, Regs, & Taxes

EPA Power Grab Has Huge Economic Consequences

Obama promised "electricity rates would necessarily skyrocket." They are.

Aug. 6, 2014

Barack Obama’s checkered history – his string of scandals, his divisive demeanor as chief executive, his unconstitutional executive fiats and his damaging foreign policy – causes many people to wonder whether he even cares about the U.S. or her people and wants to punish us simply for being America.

Case in point: The EPA rules for coal plants. In 2008, Barack Obama promised that “[u]nder my plan of a cap and trade system electricity rates would necessarily skyrocket. Coal-powered plants … [and] natural gas, they would have to retrofit their operations.”

Rep. John Dingle (D-MI) pointed out, “People don’t realize this is a tax, and a great big one.” This is one promise Obama intends to keep.

After having his pet project denied by Congress, Obama decided to create an alternative system for reducing carbon emissions. EPA Administrator Gina McCarthy recently introduced the Clean Power Plan proposal, a mess of regulations that would deal a huge blow to the power industry and the entire economy if enacted. Even though over 80% of the nation’s electricity is produced by power plants burning fossil fuels, the EPA would require them all to lower carbon emissions enormously.

“Even before we put pen to paper,” said McCarthy, “we … held 11 public listening sessions nationwide. We heard from thousands of people through phone calls, emails, meetings, and more.”

She added, “Starting June 2 … we officially entered the public comment period … We expect great feedback at these sessions. [W]e also expect a healthy dose of the same tired, false and worn out criticism that commonsense EPA action is bad for the economy.” So the EPA expects the debate to be over before it even begins.

McCarthy claimed that by 2030, the EPA would shrink electricity bills roughly eight percent. Right.

For a bit of perspective, average electricity prices more than doubled between 1984 and 2014. Prices reached a record high in June, but annual per capita production peaked in 2007. Meanwhile, the Census Bureau says that between 2007 and 2014 the population increased 6%. So while there’s an increasing demand for electricity, production is being cut to Obama’s target levels for carbon output. The Congressional Budget Office estimates Obama’s witch hunt against coal will cost the average family an additional $1,600 per year.

The EPA’s regulations treat old and new coal-burning plants differently. Those for the new plants are so harsh that any further construction would almost certainly be canceled.

Those for existing plants vary according to the state where they’re located, but the EPA’s formula would still result in plant closures. Those who manage to retrofit and stay profitable would have to raise prices astronomically. Many plants already operating wouldn’t make the cut. Sen. Roger Wicker (R-MS) predicts Mississippi’s entire coal industry would be shut down. Of course, any business that uses electricity would be seriously affected as well.

As usual, Obama hits people hardest who can least afford it. People who’ve lost jobs and families living paycheck to paycheck face the impossible – choosing between heating their homes in the winter and feeding their families. This is how the NeoComs add to their underclass. Obama’s senseless policy will devastate the American middle class.

Some activist groups are angry. One NAACP representative writes, “[T]he race to a cleaner energy future is … like a bad game of dodge ball with communities of color on the losing side.” Historic loyalty to the Democrat party among blacks is beginning to slip.

Obama acknowledged the biggest challenge is making voters understand the necessity of the changes. But his efforts at converting them are failing. In a recent Pew study, 55% of the public doesn’t believe in man-made global warming. Hence he simply acts against the people’s will.

Two rays of hope could foil Obama’s designs. First, states have been directed only to develop plans by 2016 for executing the changes, allowing Obama to dodge responsibility once the rules are implemented. A Republican president and congressional majority in 2016 could rescind the entire plan before it gets off the ground.

Second, a study conducted by the Center for Strategic and International Studies and the Rhodium Group concluded that while Obama’s plan would cut demand for coal, it would simultaneously stimulate the already rapidly growing demand for natural gas. Several states sit atop fields of enough natural gas that over time could make us energy independent, create thousands of good-paying jobs and powerfully stimulate the economy.

The short-term news isn’t good. But if enough of the American people refuse to go along such as Gov. Rick Perry, who has previously defied EPA regulations in Texas, the U.S. economy could yet survive Obama.

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