Kentucky’s Coal Industry Crushed by an Agency in Need of a Purpose


By Luke Popovich



For decades, Kentucky has proudly mined the coal that fuels America. Coal still generates more than a third of U.S. electricity – more than any other single power source last year – and provides thousands of good jobs for states like Kentucky.

Unfortunately, Kentucky’s coal industry is now facing an all-out assault from an unlikely antagonist — the federal government. With its so-called Stream Protection Rule (SPR), the Obama Administration is determined to keep coal in the ground and low-cost electricity away from American households and industries.

If there was a poster child for needless, costly regulation, the SPR would certainly qualify. This 2,300-page regulatory behemoth could not only spell the end the U.S. coal industry, but could also mean higher costs for basic industries and households that expect and need affordable electricity.

You wouldn’t know this from the rule’s name, however. After all, who doesn’t want to protect streams? But like other federal rules with poll-tested names designed to win public backing, the SPR will do more to pad a bureaucratic agency’s budget than protect streams. The federal government’s own reports show that virtually all U.S. mining operations carry no offsite environmental impacts. Because of this, a skeptical Congress is asking why the U.S. Office of Surface Mining (OSM) needs more funding when poor market conditions have already left it with fewer coal mines to regulate.

Then there’s the sleight-of-hand by which OSM foisted this regulation on the states. The agency spent six years dodging both its promise and legal obligation to consult with state mining agencies before proposing this massive rule. States were left in the dark as OSM, hoping to expand its role, muscled in on the states’ current authority to set mining standards. That’s why Kentucky is one of 17 coal producing states that have formally protested the SPR.

The coal industry and state governments aren’t the only casualties of this power grab. Because the SPR is certain to drive up the cost of mining, it will also drive up the number of unemployed miners. An independent analysis of the rule projects the loss of at least 40,000 high-wage coal mining jobs nationwide, adding to the 67,000 jobs already lost since 2011. Total job losses throughout the U.S. coal supply chain – from railroads and power plants to ports and heavy equipment – could reach 281,000 jobs.

Keeping coal in the ground will be expensive. The annual value of lost coal production from the SPR could reach $29 billion, with federal and state tax revenue falling by as much as $6.4 billion annually. That’s why America’s biggest losers may not be coal communities. Displacing affordable coal power with higher-cost alternatives will mean heavier price burdens on everyone, including low-income households that can least afford it.

The SPR is a rule in search of a purpose – one that is more about politics than environmental protection – and from a federal agency that has clearly lost its way.

Luke Popovich is vice president of the National Mining Association (NMA.)

By Luke Popovich

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