By Richard Zuber
June 1, 2018 - No matter how much the left has come to believe in its own delusions, for any reasonable observer, it's shockingly clear that the Obama years have left a lasting toll on America. If more proof were needed, look no farther than America's energy system. After an eight-year environmental crusade, the Trump administration was recently forced to step in and underwrite the country's ailing coal and nuclear plants in a last-minute bid to avoid imperiling the reliability of the nation's power grid.
Despite renewed political will to shore up America's energy dominance, hard-line liberal and environmentalist lobbies are not letting go of the renewable dream. Worse still, not only is the determination of the left in sidelining American coal jeopardizing American jobs, but its militant shortsightedness comes at a time when the world's appetite for coal is rising.
The U.S. Department of Energy didn't mince words last year when it released a report recommending that power markets revise how they value coal and nuclear power. After years of inadequate review, it was finally revealed that Obama-era federal tax credits for wind and solar, as well as state renewable portfolio standards (RPS), were eating away at "baseload profits." Under Obama-era regulations, this forced federal agencies to expedite ever more permits for renewables in an attempt to obscure the symptoms without tackling the underlying structural problems. Energy secretary Rick Perry said it the clearest: the nation's power grid simply cannot afford more coal-fired power plants closing down – unless, of course, a grid collapse is an acceptable option for the world's leading economy.
Steps have been taken since to reinvigorate the domestic coal industry, especially thanks to Trump's light-touch regulations. In his first year, Trump declared the American departure from the Paris Agreement, repealed the Clean Power Plan for better support of American power plants, reversed a ban on new coal leasing on federal lands, wrangled runaway renewable research funding and held firm his stance as a public advocate of resource exports. National coal production has increased by six percent and coal exports by a whopping 60 percent.
Indeed, despite what some may say, growing global demand for coal shows that anti-coal activists are in the wrong. Thanks to foreign demand – especially demand for thermal coal used in power plants and metallurgical coal – the country's energy backbone is looking at a strong future as the formerly ailing industry is turning itself around. Coal firms that were bankrupted by a toxic regulatory environment, such as Missouri-based firm Peabody Energy or Tennessee's Alpha Natural Resources, have returned or will return to the stock market, having shed their debt load.
However, the story goes beyond the mere domestic domain. The overseas coal boom has opened an extraordinary window of strategic opportunity for those willing to strengthen U.S. global leadership – it only needs to be seized. That's exactly what happened at the U.N. climate talks in Bonn, Germany last year, where Trump proposed the creation of an international clean coal alliance to promote the continual use of coal in developing countries. The proposal found allies in countries highly dependent on the fuel, with India, Nigeria, and Bangladesh, among others, quickly signing on.
Since any action has an equal and opposite reaction, professional naysayers like Canada, Denmark, and France formed an anti-coal coalition in response with the aim to phase out coal power generation before 2030. Their barking, however, diminished to no more than a whimper. After all, they conveniently have little to no coal production of their own, meaning their weight in determining the direction of global energy policy in this regard is rather irrelevant.
Meanwhile, the clean coal alliance has made headway and is taking shape as a global institution. The Trump administration is currently considering formalizing the alliance around "a new, central institution" advocating natural gas and coal technology exports. According to administration documents, the renamed "Clean and Advanced Fossil Fuel Alliance" seeks the participation of scientists, industries, and policy-makers to "explore the vast potential of clean and advanced fossil fuels, specifically clean coal and natural gas." This will include sharing carbon capture and storage (CCS) and high efficiency, low emission (HELE) know-how with developing economies, all of them desperate for the chance to bridge energy poverty gaps.
The new institution will also add further weight to last year's updated Treasury Guidance for U.S. representatives on the executive boards of Multilateral Development Banks. Washington has pushed for ending the World Bank's limit to financing of coal plants and is now aiming to provide backing for coal-based energy projects where they are needed most. With the U.S., and soon a major U.S.-led international organization behind it, MDBs may be facing a game-changer that forces them to reassess their attitude and approach to coal power.
What these developments unequivocally show is that the clamoring of the disconnected left can be rightfully discarded. Coal is far from dead, as is the political will to use it to the benefit of American families and those beyond American borders. Fast-tracking HELE and negative emissions technology is a surefire means to catapult the U.S. to energy dominance and strengthen it as a global energy leader. Unlike those decrying the clean coal alliance as a pipe dream, the Trump administration isn't wasting any time turning the lights back on.
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