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Obama "bankrupting" coal companies
The online site The Daily Caller (a combination of rightwing propaganda and half nude celebrities) argues Obama has bankrupted coal companies, with regulation to prevent pollution and climate change.

They also argue that the pollution isn't a serious problem:

Quote:According to a recent report by the Energy Information Administration (EIA), more than 80 percent of the nearly 18 gigawatts of electric generating capacity retired in 2015 was conventional steam coal. The EPA cites the Mercury Air & Toxics regulation, which has enormous compliance costs and minimal direct environmental benefits, with 30 percent of coal retirement in 2015.

Then they argue that alternative energy gets preferential treatment, and of course they have to come up with Solyndra again as a symbol of failed government intervention.

Now some facts.

Perhaps The Daily caller should study the health effects of fine partical pollution:

Quote:Outdoor air pollution causes more than 3 million premature deaths a year, according to a study published today in Nature. The researchers, led by Jos Lelieveld of the Max Planck Institute for Chemistry in Mainz, Germany, estimated that in 2010, 3.15 million people worldwide died from exposure to airborne fine particles, with another 150,000 dying from ozone air pollution.

Air Pollution Causes More Than 3 Million Premature Deaths A Year Worldwide | IFLScience

Or the mercury pollution they so readily dismiss:

Quote:Mercury is one of the most harmful pollutants faced by fish and wildlife. Toxic mercury is released from coal burning power plants across the country and accumulates in rivers, lakes, and forests.   Why is Mercury a Problem? Mercury is a highly potent neurotoxin that impacts the function and development of the central nervous system in both people and wildlife. Exposure to mercury is particularly dangerous for pregnant and breastfeeding women, as well as children, since mercury is most harmful in the early stages of development. Scientists have found alarming levels of mercury accumulation in a wide range of wildlife species, causing dangerous reproductive and neurological problems. Fish have difficulty schooling and decreased spawning success. Birds lay fewer eggs and have trouble caring for their chicks. Mammals have impaired motor skills that affect their ability to hunt and find food. In addition, some evidence indicates that elevated mercury levels can adversely affect species' immune systems. All these effects combine to create a severe threat to wildlife survival.

Mercury Pollution - National Wildlife Federation

Don't get us started about climate change (which you can see elsewhere in this forum). So there is little doubt that burning coal creates additional cost in the form of pollution and related health risks, and climate change.

These are so called negative externalities, cost that aren't incurred on the producers or consumers, but on the rest of society. If left to the market, it doesn't take these externalities into consideration (this is a market failure, anathema to the market fundamentalists at The Daily Caller) and therefore overproduces the good (in this case, coal).

It is perfectly normal for governments to try to internalize these externalities, let the polluter pay, that is, and bring social cost and benefit in balance.

This can be done through a variety of ways, by regulation, tax, some market scheme, whatever. But this is also anathema to the market fundamentalists, you see, government is always the problem, never the solution. By definition.

Let's also get some facts straight about fossil fuel subsidies:

Quote:In the United States, credible estimates of annual fossil fuel subsidies range from $10 billion to $52 billion annually yet these don’t even include costs borne by taxpayers related to the climate, local environmental, and health impacts of the fossil fuel industry.

If we include these cost (that is, basically the externalities we've just described), the figure is much larger, although this is a figure for the world as a whole:

Quote:[Global post-tax energy subsidies are now estimated at a whopping US$4.9 trillion (6.5 percent of global GDP) in 2013, and projected to remain high in 2015, at US$5.3 trillion (6.5 percent of global GDP)—despite the recent drop in international energy prices

Global Energy Subsidies Are Big—About US$5 Trillion Big | iMFdirect - The IMF Blog

Now that we got that out of the way, the inevitable Solyndra. Yes, it received big loan guarantees from the DOE, yes it went bankrupt, but this was mainly because the price of polysilicon, the raw material for a competing solar technology, plunged, putting Solyndra at a severe disadvantage.

Also, the DOE program is exactly to stimulate these novel technologies, and not all of these are expected to become viable. Do we say the whole market system failed when a company goes broke? Of course not. But market fundamentalist argue this about the whole DOE program on the basis of a couple of failed companies with Solyndra as the poster boy.

The funny thing is, that DOE program as a whole turned out to be profitable for the tax payer:

Quote:The U.S. expects to earn $5 billion to $6 billion from the federal program that funded flops including Solyndra LLC, bolstering President Barack Obama’s decision to back low-carbon technologies. It’s the first time the Energy Department has released an estimate of the potential gains for the loan guarantee program, designed to back clean-energy projects when venture capital or financing from banks and other investors is unavailable. The department expects a loss rate of about 2 percent on $32.4 billion set aside for loans to spur energy innovation, according to a report today.

One might also say that clean energy have positive externalities, that is, their social benefits exceed the private benefits (exactly the opposite of negative externalities) so they tend to be under-produced and subsidies is one way to remedy this.
Here is what's bankrupting coal companies:

New Record Set for World's Cheapest Solar, Now Undercutting Coal

Anna Hirtenstein

May 3, 2016 — 1:20 PM ART
  • 2.99 U.S. cents per kilowatt-hour is 15% lower than old record
  • Cheaper than new coal-fired electricity in the Gulf emirate
Solar power set another record-low price as renewable energy developers working in the United Arab Emirates shrugged off financial turmoil in the industry to promise projects costs that undercut even coal-fired generators.

Developers bid as little as 2.99 cents a kilowatt-hour to develop 800 megawatts of solar-power projects for the Dubai Electricity & Water Authority, the utility for the Persian Gulf emirate, announced on Sunday. That’s 15 percent lower than the previous record set in Mexico last month, according to Bloomberg New Energy Finance.

The lowest priced solar power has plunged almost 50 percent in the past year. Saudi Arabia’s Acwa Power International set a record in January 2015 by offering to build a portion of the same Dubai solar park for power priced at 5.85 cents per kilowatt-hour. Records were subsequently set in Peru and Mexico before Dubai reclaimed its mantel as purveyor of the world’s cheapest solar power.

“This bid tells us that some bidders are willing to risk a lot for the prestige of being the cheapest solar developer,” said Jenny Chase, head of solar analysis at BNEF. “Nobody knows how it’s meant to work.”
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Plunging costs along with the bankruptcy for the biggest developer, SunEdison Inc., has spurred questions about whether the cheapest projects will ever be profitable. The collapse of the world’s largest renewable energy company made some banks wary of financing projects. The winners of recent auctions in Mexico, Peru and Chile were diversified power companies like Enel SpA, which perhaps prioritized market share over profit maximization.

Dubai’s utility didn’t identify the developers behind the record-low bid it received. MEED reported that it’s a group including Masdar Abu Dhabi Future Energy Co., Spain’s Fotowatio Renewable Ventures BV and Saudi Arabia’s Abdul Latif Jameel. Among those companies, only Masdar could be reached for comment, and it didn’t confirm that it was the low bidder.

“A consortium led by Masdar, Abu Dhabi’s renewable energy company, was one of a number of bidders to have submitted a proposal for the third phase of the Mohammed bin Rashid Al Maktoum Solar Park,” a spokesperson for the consortium said in an e-mailed statement. “This is an active bid, with the technical and commercial proposals being evaluated by Dubai Electricity and Water Authority.”

Tender Process

The shift to tenders from feed-in tariffs for clean energy globally has helped governments rein in support for renewables while prodding companies to deliver lower costs. That’s shifted pressure away from government budgets and toward developers, which must strike a balance between a winning new contracts and maintaining profits.

Enel Green Power’s Chief Executive Officer Francesco Venturini, whose company bid 3.5 cents a kilowatt hour in Mexico last month, said in an interview that his projects will still make decent money even with record-low prices for electricity.

Enel’s Strategy

There is no value in winning without margin attached,” Venturini said in an interview in Brussels last month. “I have two investment committees and two boards of directors I need to present my projects to and they want to see the money attached to it. So trust me, there is margin.”

Dubai’s state utility said it received five bids for the 800-megawatt project, which will be the third phase of the Mohammed bin Rashid Al-Maktoum solar park. It has not awarded the building permits yet. The facility is planned to have a capacity of 5 gigawatts by 2030.

“This price is borderline in terms of viability, but it’s an outlier project,” said Josefin Berg, solar analyst at IHS Inc., an industry researcher. “The size of the installation makes it easier to get good conditions on their procurement. It shouldn’t be used as a benchmark.”

The 2.99 cents bid for the solar project is a third lower than the electricity that will be generated by a coal plant commissioned by Dubai in October. That facility, set to begin generating in 2020, is expected to feed power onto the grid at 4.501 cents per kilowatt-hour under a 25-year power purchase agreement.
Coal Isn't Dying Because There's a War on It

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JUNE 17, 2016 11:54 AM EST

By Barry Ritholtz

I never cease to be amazed how people with an agenda massage facts, or omit them, in order to support their cause.

It comes up in the investing world, where these agendas often lead to money-losing decisions. Being able to detect this sort of nonsense is good over the long run for your investment portfolio.

I was reminded of this recently when I read a report from the American Action Forum. The report says that just five year ago the market value of the four biggest coal companies was more than $35 billion. Since then, that has plunged 99 percent and some of the biggest producers have filed for bankruptcy.

What is to blame for this stunning loss? The report sums it up in word: Regulation. The "War on Coal," the report says, has imposed “$312 billion in costs and more than 30 million paperwork burden hours” on the industry.

Such a nice, neat explanation. But there's more to it than regulation designed mainly to limit how much pollution the industry spews into the air. Let’s take a closer look at what factors might be behind the demise of the coal companies:

1) Cheap natural gas: Coal-fired plants have been the workhorses of U.S. electrical generation for the better part of a century. But many utilities are switching from coal to natural gas as an energy source. It isn't only greener, it's cheaper, partly because it costs less to move gas through a pipeline than it costs to transport coal by ship, rail or truck. Also helping to lower prices is the boom in fracking, which opened up vast new sources of natural gas.

It now appears that natural gas overtook coal as the top U.S. power source last year. That trend is likely to accelerate: as of 2015, about 20 percent of the country’s coal-fired power plants were facing retirement. Expect those to be replaced or retrofitted to burn natural gas. This matters because the electric-power generation used92.8 percent of the total U.S. coal supply as of 2014. Coal accounts for 29 percent of electrical generation.

It obviously isn't good for your business when your largest customers are abandoning your product for something cheaper.

2) Debt: Peabody Coal, the nation's largest coal producer with 19 percent of the market, filed for Chapter 11 bankruptcy reorganization earlier this year. The bankruptcy affects about $8.4 billion in loan and bond debt. It didn't help that Peabody spent $5.1 billion for Australia’s MacArthur Coal in 2012 as coal prices plunged.

Arch Coal, the No. 2 U.S. coal producer with 13.6 percent of the market, also filed for Chapter 11The company had $4.5 billion in debt, most of which it ran up amid a series of ill-timed acquisitions in 2011, just before the price of coal collapsed.

Other top coal producers that filed for bankruptcy include Patriot Coal, Alpha Coal, Walter Energy and James River Coal.

 3) Clean Energy: Coal is a dirty energy source. It fouls the air and leaves behind abandoned mines that double as hazardous waste sites that need to be cleaned up, often at taxpayer expense. These are what economists call externalities, meaning someone other than the coal companies bears the cost of the pollution they cause.

So while much of the political rhetoric is aimed at White House plans for renewable energy, you may have missed where the action is: at the state level, where regulators are requiring the utilities they oversee to cut coal use.

As Slate's Dan Gross notes, 29 states have so-called renewable portfolio standards. These mandate a rising percentage of clean-energy use, and that usually means something other than coal. New state air-quality standards also rule out coal as an energy source for new or refurbished electrical-generation plants. Furthermore, nine states on the East Coast have started a regional greenhouse gas initiative to limit emissions. That means more natural gas and green energy, less coal.

The decline of the American coal industry has been driven by many forces. Yes, the regulatory burden has increased, but it is hardly the main factor -- and it's well justified, based on the harm coal does to the environment and human health. The reality is that coal is the victim of competition from cheaper natural gas, from green-energy sources like solar and wind, and too much debt taken on to pay for costly and ill-timed acquisitions.

Having an agenda only gets in the way of understanding this.
Could it be that there is not much of a "war on coal' to speak off? Scientists against the Federal Coal Program:

Quote:Enough, already. That’s what 67 prominent scientists are telling Secretary of the Interior Sally Jewell, whose department is conducting a review of the U.S. program to lease federal lands for coal mining. “The science is clear: to satisfy our commitment under the Paris Agreement to hold global temperature increase well below 2°C, the United States must keep the vast majority of its coal in the ground,” the scientists, including Ken Caldeira, a climate scientist at the Carnegie Institution for Science, and James Hansen from Columbia University’s The Earth Institute, wrote in a letter delivered to Jewell on Tuesday. “We urge you to end federal coal leasing, extraction and burning in order to advance U.S. climate objectives and protect public health, welfare and biodiversity.” More than 40 percent of coal produced in the United States comes from federal lands, under a leasing program that has not been reviewed in more than 30 years.
Scientists Are Fed Up With The Federal Coal Program | ThinkProgress
From the WSJ, no less..

Quote:Washington didn’t kill coal, but disaffected voters are being sold a story of victimhood. If there is a “war on coal,” as Donald Trump and Sen. Mitch McConnell allege, it has been under way for a very long time. In Mr. McConnell’s home state of Kentucky, coal mine employment peaked at 75,633 in 1948. It fell by two-thirds to about 25,000 in the late 1960s, before doubling to more than 50,000 in the late 1970s. It has since fallen virtually without interruption and now stands at 6,465. Much the same is true for West Virginia, the epicenter of Appalachian angst. 
Hard Truths for Trump’s America - WSJ
Surprise surprise. They now have to slowly walk back all their lies they made all these years..

Quote:In 2013, then-Minority Leader Mitch McConnell (R-KY) took to the Senate floor to excoriate the Obama administration’s environmental policy and its impact of coal jobs in eastern Kentucky.

Noting a recent listening session in Pikeville, Kentucky, McConnell sought “to put a human face on the suffering that is being felt in Appalachia due in large part to this administration’s war on coal.” He displayed a photo depicting two of “over 5,000 Kentuckians who have lost their jobs in the war on coal, two of the casualties from the president’s war on coal.” The longtime EPA critic drew a direct line between the agency’s emissions standards and the loss of jobs for his constituents. 

The claim — which was a major focus for McConnell throughout President Barack Obama’s second term and a frequent club for his attacks on Democrats — was always unfounded. In September, the director of Harvard’s environmental economics program told the New York Times that, the real “primary cause of the tremendous fall in coal employment is low natural gas prices, due to increased supplies of natural gas from hydraulic fracturing.” But McConnell kept repeating it anyway.

President-elect Donald Trump vowed throughout the campaign that he would repeal climate restrictions and to “end the war on coal and the war on miners.” “If I win we’re going to bring those miners back,” Trump said at at a May rally in West Virginia. “All of it’s getting safe and as it gets safe they’re taking it away from you in a different way. “These ridiculous rules and regulations that make it impossible for you to compete, so we’re going to take that all off the table folks.”

Now that his endorsed presidential candidate is poised to deregulate energy, McConnell has already changed his tune. In a Friday appearance at the University of Louisville, he tamped down any expectations that coal jobs would come back. “We are going to be presenting to the new president a variety of options that could end this assault,” McConnell told attendees. Then he added “Whether that immediately brings business back is hard to tell because it’s a private sector activity.”

McConnell also noted that he did not intend to spend any government dollars to help those who have lost coal jobs and may not regain them. “A government spending program is not likely to solve the fundamental problem of growth,” McConnell argued. “I support the effort to help these coal counties wherever we can but that isn’t going to replace whatever was there when we had a vibrant coal industry.”
Quote:Few doubt the Trump administration will move swiftly to unravel environmental rules that are wildly unpopular across the fossil fuel industry, allowing a dangerous rise in greenhouse gas emissions. But observers say no amount of regulatory rollbacks can bring the coal sector roaring back at this point.

That’s because regulations aren’t the industry’s real problem—market forces are. Coal’s true rival is cheap natural gas, which was freed in soaring volumes during the last decade through fracking. Coal’s economics meant it simply couldn’t compete. 

Meanwhile, mining jobs have been in decline since a boom in the 1970s, falling even while production climbed, largely due to shifts toward highly mechanized and less labor-intensive methods like mountaintop removal and strip mining. There were more than a quarter of a million U.S. coal mining jobs in 1979. As of October, there were fewer than 54,000, according to the Bureau of Labor Statistics.
Trump’s Empty Promise to Coal Country
Quote:Emboldened, the industry and its allies have been on a tear recently. Last month, House Republicans overturned a regulation to protect U.S. waterways from coal pollution. Republican legislators in Kentucky and West Virginia passed bills to scale back state safety inspections on coal mines. And as early as this week, Trump is expected to sign executive orders lifting a temporary moratorium on leasing federal lands to coal companies and shredding the Clean Power Plan, the long-stalled federal program to reduce carbon emissions from the utility sector. 

Still, that isn’t likely to resuscitate the industry. “The market conditions are not there,” Dan Bucks, a coal policy expert and former director of revenue for the coal-producing state of Montana, told The Huffington Post on Wednesday. “Federal policy is only one variable, and market conditions are the larger factor. The reality is energy markets are changing around the world.” 

Analysts have long blamed natural gas ― made cheap by new extraction techniques like hydraulic fracturing, or “fracking” ― for devouring the U.S. electricity market, on which coal once had a near monopoly. But the U.S. Energy Information Administration released data Tuesday that indicates a steep nosedive in coal exports since 2012. Exports fell for a fourth consecutive year to 60.3 million short tons, less than half the record volume shipped overseas fives years ago.
New Data Highlights The Problem With The ‘War On Coal’ Narrative | The Huffington Post

Interesting read. It results that China has cut back on the use of coal big time to fight pollution and US companies were betting on increased exports to China.
Quote:Last week, Xcel Energy announced a multi-state wind capacity project, anticipated to be the largest in the United States. Spanning seven states, the project covers eleven new wind farms and would generate 3280 MWs at a cost of $3.5-4.4 billion. In its announcement, Xcel emphasized the cost-savings attached to wind power, arguing that it would save Xcel customers in the Midwest $7.9 billion over thirty years. This, rather than the environmental benefits of renewable energy, drove the company’s mission statement: wind was cheap, not just clean.

Increasingly, this is a line of argument companies involved in renewable energy are deploying, finding that it gets better traction from skeptical consumers and fidgety investors. Existing tax credits, most notably the production tax credit (PTC) that keeps costs low, as well as a tax rebate per kilowatt hour. These help wind compete with natural gas as a cheap source of electricity and has driven the surge of utility interest in harnessing wind power, despite the much-touted promises of President Donald Trump to bring back American coal.

Moody’s Investor Services now estimates that the falling costs of wind power directly threatens 56 GW of coal power, out of 87 GW surveyed. Moody’s report estimates the MW-hour cost of wind in the Great Plains region at around $20, while coal comes in at $30.
Wind Energy Now Directly Competing With Coal On Cost |
Even China is moving away from coal (considering the air quality in their cities, that's hardly surprising). However..

Quote:Top staffers at the Environmental Protection Agency (EPA) are signaling they are on the side of the coal industry with remarks given by senior policy advisor Mandy Gunasekara at the coal industry's Eastern Fuel Buyers conference. "I'm here to talk to you to make sure what we're doing in D.C. is beneficial for you. If it's not working, I want to hear about it so that we can work it out,"

Gunasekara told the crowd of coal sector employees, according to the financial news and data-analysis website The new EPA administration signals a departure from President Barack Obama's EPA, which passed actions like the Clean Power Plan and the Waters of the United States Rule to limit power plant emissions and support water protection.
EPA senior policy adviser signals close relationship with coal industry - Business Insider

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