Environment
5:22 pm
Thu July 24, 2014

Report Quantifies EPA Rule's Effect on Coal-Producing Regions

Credit Erica Peterson/WFPL

A preliminary analysis of the effects of the EPA’s new greenhouse gas rules on regions of the country suggest some states fighting the regulations—like Texas and Oklahoma—may see economic benefits under the rule.

That was the takeaway from stories that ran today in the New York Times and Wall Street Journal.

From the New York Times:

The study took into account the economic costs imposed by the regulation and concluded that it would raise electricity rates by up to 10 percent in some parts of the country and eventually freeze coal production. But even taking those costs into account, Arkansas, Louisiana, Oklahoma and Texas together would experience an annual net economic benefit of up to about $16 billion, according to the study.

“The irony is that some of the states that have been the loudest in opposing E.P.A. climate regulations have the most to gain in terms of actual economic interest,” said Trevor Houser, an analyst at the Rhodium Group and a co-author of the study.

Unfortunately, it’s not the same case for Kentucky where Senate Minority Leader Mitch McConnell has been a vocal critic of this—and almost every other—EPA regulation. Many other Kentucky elected officials have also criticized the regulations.

The analysis found that coal-producing states without significant natural gas reserves get the short end of the stick.

The analysis predicts the East South Central Region—which includes Kentucky, Tennessee, Alabama and Mississippi—stands to lose anywhere from $1.7 billion to $2.5 billion in lost coal production revenue, while only gaining a possible $300,000 in natural gas production.

The EPA’s Clean Power Plan sets out a path to decrease the nation’s carbon dioxide emissions, which are contributing to climate change and causing health problems. The government argues that nationwide, the plan’s benefits far outweigh the costs.

It’s not really a surprise that Kentucky loses under a purely production revenue standpoint, but the numbers are startling. And still, there are a lot of unknowns. The rule hasn’t been finalized, and it leaves a lot of agency up to individual states to craft an emissions-reducing plan.