Report: Obama’s Climate Plan Will Shrink Coal Industry By 48 Percent

Regulations to cost 125,800 jobs

Jeffrey Energy Center coal power plant in Kansas
Jeffrey Energy Center coal power plant in Kansas / AP
August 4, 2015

President Barack Obama’s plan targeting coal-burning power plants will cost a quarter of a million jobs and shrink the coal industry by nearly half, according to a new report by the American Action Forum (AAF).

The president released final regulations from the Environmental Protection Agency (EPA) on Monday, which require every state to meet strict emission standards for coal-burning power plants in the next 15 years.

The so-called "Clean Power Plan" will cost the industry $8.4 billion, nearly 10 times more expensive than the most burdensome regulation released this year, according to AAF, a center-right think tank led by Douglas Holtz-Eakin, former director of the Congressional Budget Office.

"This week, the Environmental Protection Agency (EPA) released its final greenhouse gas (GHG) standards for existing power plants," according to the report, authored by AAF’s director of regulatory policy Sam Batkins. "The final plan will shutter 66 power plants and eliminate 125,800 jobs in the coal industry."

"Perhaps more alarming, using the 2012 baseline for coal generation and projections for 2030 output, the industry could shrink by 48 percent," the report said.

AAF based its report on EPA data, which estimated that the rules would lead to 34,000 "net decrease in job-years," or jobs. However, the AAF argues nearly four workers depend on a single energy job.

"In AAF’s last measurement of the economic loss of the rule, we used a PricewaterhouseCoopers study that found one energy job supports 3.7 additional jobs," the report said. "If we take that multiplier and apply it to EPA’s figure of 34,000 jobs, it nets a total employment impact of 125,800 fewer workers."

AAF also predicts at least 66 coal-fired power plants will close due to the plan. Those plants currently produce emissions more than 2.5 times the rate that the EPA has mandated all must meet by 2030.

"These figures shouldn’t be too surprising," the report said. "The hit that local communities in the south and Midwest have taken, in part due to EPA regulations, is staggering."

Since President Obama took office the country has lost thousands of coal mining jobs, hitting West Virginia (1,318), Kentucky (705), Pennsylvania (1,096), and Ohio (1,395).

"Combine coal extraction losses with coal generation declines nationwide and the coal industry has lost more than 47,500 jobs already, with the promise of more to come by 2030," the report added.

The EPA rules require all states to reduce carbon emissions from coal-burning power plants, depending on the state’s production. Overall, average emissions must be reduced by 35 percent, from 1,665 pounds of carbon dioxide per megawatt hour to 1,077.

As a result of the rules, AAF predicts the coal industry will shrink by 48 percent due to a loss of 162 megawatts (GW) of coal-fired power. The EPA expects energy production from coal-fired power plants to decline to 174 GW, far below the 336 GW the industry generated in 2012.