Listen to the debate about President Barack Obama's supposed “war on coal,” and you'll hear arguments like these: “Electric rates are going to double between now and 2017,” coal executive Bob Murray told Fox host Neil Cavuto in late June. “[Obama] is driving this country from a reliable, low-cost power grid to enormous electric power costs for absolutely no environmental benefit whatsoever.” When the rule came out, the Environmental Policy Alliance, a conservative group, ran a full-page ad accusing the Environmental Protection Agency of wanting “to shut down 25% of our electric grid.” And the U.S. Chamber of Commerce has charged the EPA rule would cost the economy more than $51 billion a year.
The fossil fuel industry has been promising this kind of catastrophe for decades, with a slight variation now and then. If the sky indeed fell because of the EPA’s proposed climate rule like promised, it would be the first time the industry guessed it right. And you can expect these allegations to pick up again this week and last through the midterms, as the EPA kicks off a series of public hearings on its first-ever proposal to restrict carbon emissions from existing power plants, the largest source of greenhouse gas pollution in the U.S.
Back then, the fossil fuel industry was trying to fend off a different set of regulations designed to cut toxic pollutants, like nitrogen and sulfur emissions, from coal. Today, the industry and allies are fighting a different initiative: an effort by the Obama administration to reduce coal emissions from existing power plants, enough to reduce the power sector’s pollution 30 percent by 2030.
But if the circumstances have changed, the rhetoric hasn’t.
Like all such warnings, these contain at least a little truth. Some coal plants really will close. Some people may pay higher bills. But is not the whole story, and it helps to look at how the dire predictions of the past four decades panned out:
Your electric bill will go way up.
When the Clean Air Act passed Congress in 1970 and was amended in 1990 to tackle pollutants from major sources—coal plants and cars— the coal industry, and occasionally the automakers, claimed cleaner standards would force plants to close en masse, thereby raising prices. Though the intent was to cut smog, acid rain, and health problems, lawmakers took industry opposition seriously: The original Clean Air Act grandfathered in existing coal plants so they would not have to invest in most cleaner technologies.
After all, the American Electric Power Company claimed in a New York Times ad in 1976 that “the problems generally associated with the mining and burning of coal have already been solved" and railed against "the destructive, regressive actions of a small minority… the fanatical environmentalists." The ad—unearthed by Greenpeace back in the 2012 presidential election—predicted factories would start closing for lack of power “in parts of our country in less than ten years.” Before that, Carl G. Beard II, director of the West Virginia Air Pollution Control Commission in 1972, claimed, “Consumers of power will pay for these costly errors for the next 25 to 30 years.”
Predictions of huge rate hikes also preceded proposals to crack down on acid rain in 1990. The amended Clean Air Act set up a cap-and-trade program for sulfur dioxide and cleaner equipment to cut nitrogen oxides. In 1989, the utility lobbying arm Edison Electric Institute claimed regulating the roots of the problem—sulfur dioxide and nitrogen oxide—would lead to unacceptable electricity rates. The CEO of Southern Power testified to Congress that acid rain regulations “could cost electric utility rate payers $5.5 billion annually between enactment and the year 2000.” This turned out to be overstated. When the Center for American Progress calculated the actual impact, the utilities’ estimates of rate increases were off by 16 percent. In fact, 32 states had lower electricity rates (in 2009 dollars) than during the course of the debate.
The lights will go out.
In 1974, an American Electric Power Company ad warned, "Just about this time next year lots of people may be asking, 'What time is the electricity on today?'" The ad ran as an objection to cracking down on how much pollution plants could spew from their tall smokestacks, arguing that the Clean Air Act set an "unrealistic requirement that emissions be measured at the top of the stack, instead of at the ground level where people live and breathe."
Needless to say, many of coal's frequent warnings of widespread electricity shortages never came to pass. Almost 40 years later, the lights are still on, meeting higher demand than ever, with the help of efficiency measures and renewable energy.
Coal plants will close.
When the EPA in 2011 issued a rule to cut cross-state sulfur dioxide pollution by 73 percent, the industry predicted widespread closing of plants. The owners of one plant in particular—in Homer City, Pennsylvania—said there would be painful electricity hikes and other “immediate and devastating” consequences.
Three years later, the Associated Press hailed the plant as a kind of success story, because it didn’t close and it finally installed equipment that slashes pollution further than the rule even required. In the past, that the plant emitted more sulfur dioxide than all other plants combined, Environmental regulations do play some role in deciding whether to update or close a plant. However, the part they play is relatively small. Ultimately, the economic considerations also include how cheap natural gas impacts the attractiveness of coal is and the age of a plant determine whether the mine shuts down, research from economists at the Brattle Group pointed to both reasons as cause for plan closures.
An entire industry will die.
Coal isn’t the only industry guilty of overreaction. Rachel Maddow explained on her show a few weeks ago how auto executives in the 1970s thought the Clean Air Act’s standards to cut vehicle emissions would mean the death of car production in America. Their facilities “would be forced to close,” the car manufacturers trade group warned. The domestic auto industry did struggle, culminating in its near-collapse during the 2008 financial crisis. But that was a function of mismanagement and other problems, not overly onerous environmental rules. Foreign carmakers did just fine and the U.S.-based carmakers are now thriving, too.
By the way, the EPA has its own projections for the climate rule. They estimate it will reduce premature deaths by about 6,600, lead to electricity bills that are 8 percent lower, and realize climate and public health benefits worth somewhere between $55 to $93 billion by the time it’s fully implemented in 2030. Meanwhile, the pollutants that the EPA has tackled would slowly improve (this map shows you an example by just how much.)
The EPA is guilty of overshooting some of its predictions. But it can also actually overestimate its own projected cost of installing cleaner technology. The Rhodium Group and Natural Resources Defense Council both argue that the cost-benefit analysis depends on a lot of factors, including how states draft their plans and whether the industry finds ways to go cleaner more efficiently. The EPA doesn’t isn’t accounting for technological innovation, either, when making its calculations.
While coal is indeed hurting, some red states’ natural gas industries is getting a big boon in the new rules. So while the rule will make the shift to natural gas and renewables that much faster, don’t believe that the sky is falling. Remember, the whole point is not a war on coal, but fighting the bigger battle—climate change.