"The traveler comes to the Appalachians in the lovely season. He sees the hills, the streams, the foliage—but not the poor,” Michael Harrington wrote in "The Other America," his 1962 book that was an inspiration for Lyndon Johnson's launching of the Great Society programs.
Paul Tice, managing director of the Energy Capital Group at USCA Asset Management LLC, quotes Harrington this morning in an article in the Wall Street Journal about the devastation President Obama's policies have caused in Appalachia. Tice writes:
The latest touchstone of liberal policy, the regulation of greenhouse-gas emissions, is causing economic destruction and pushing poverty higher in the Appalachians. But those backing the climate-change agenda are doing their best to keep this reality hidden from the public.
But the economic devastation is severe. Tice notes that 27 coal mining companies with significant operations in Central Appalachia have filed for bankruptcy since 2012. Coal production declined by 45 percent between early 2011 and the first half of this year. Three hundred and thirty two coal mines in West Virginia have folded, leading to the loss of 9,733 jobs. West Virginia has the highest unemployment rate (6.9) in the U.S.
Some of these problems are structural, Tice concedes, but many are the direct results of environmental policies of the Obama administration. Environment radicals, of course, try to claim that the economy of Appalachia is succumbing to economic forces and not their policies. Tice disagrees:
The West Virginia coal industry is no longer dealing with cyclical pressures or the invisible hand of the market; rather, it is facing an existential regulatory threat. In its 2009 “endangerment” finding, the Environmental Protection Agency ruled that greenhouse gases pose a public-health threat. Since then the EPA has put limits on carbon-dioxide emissions from new and existing power plants. Add that to tightened restrictions on mercury and other air pollutants, plus the coercive Renewable Portfolio Standard mandates at the state level.
The result is that electric utilities have opted to shut down coal-fired power plants rather than invest the capital needed to upgrade them and extend their useful life. The Energy Information Administration projects that over the next five to seven years roughly a third of America’s coal-fired generation capacity will be retired. Utility companies are not switching to natural gas to save on fuel; coal is still a cheaper feedstock. But these highly regulated firms see the regulatory writing on the wall.
Instead of focusing on a hypothetical “social cost of carbon,” the Obama administration should consider the real economic effect of its regulation on West Virginia. The rest of the country should speak up, since the loss of coal-fired generation will destabilize the power grid and increase the price of electricity. Oil and gas companies should pay attention, too: For the fossil-fuel industry, Central Appalachia is the canary in the coal mine.
The destruction of Appalachia is particularly outrageous when we see this morning how the high-living officials from all over the world gathered this week in Paris to live high off the hog, while planning to impose poverty-producing regulations on lesser folk. The out-of-work coal miners would settle for considerably less than the meal President Obama enjoyed at a three-star restaurant before jetting back to the U.S.