Texas will need more electric power in the coming years-lots more-and coal will be critical to meeting those power needs.
Coal is a secure energy source, since the United States contains more than a quarter of the world’s recoverable reserves, equaling a 250-year supply at current rates of consumption. As a result, coal-fired power plants generate 52 percent of the electricity in the United States.
And while coal, like every other energy source, has negative environmental impacts, it is the lowest-cost source of reliable power. In addition, today’s coal-fired power plants emit 90 percent less air pollution than previous generations and emit less carbon dioxide (CO2) into the atmosphere per kilowatt produced.
Despite these improvements, proposed air quality standards and proposals to reduce greenhouse gas emissions would force utilities to shift electricity production from coal to other sources of generation. Two recent studies estimated the consequences of such a shift.
Researchers at Pennsylvania State University estimated the economic benefits of coal. They estimated that by 2015 coal-fired electric power generation would produce more than $1 trillion annually in gross domestic product (GDP), $360 billion in additional household income and nearly 7 million jobs. By comparison, replacing 33 percent of coal capacity with natural gas and renewables would reduce GDP by $166 billion and household income by $64 billion, while cutting employment by 1.2 million jobs.
Surprisingly, eliminating coal would also indirectly harm peoples’ health. Research for Congress’ Joint Economic Committee in 1979 and 1984 by Dr. Harvey Brenner of Johns Hopkins University showed the impacts of unemployment on public health. In his 1984 study, Brenner found that a one percent increase in the unemployment rate was associated with a two percent increase in premature deaths.
In 2004, Brenner used his models to estimate the public health results from reducing coal-generated electricity. The U.S. Energy Information Agency has estimated that proposed climate change policies could potentially displace 78 percent of U.S. coal generation. Applying his model to the EIA estimates, Brenner found reducing coal power would lead to a decline in income and increased unemployment. The results for public health would be devastating-more than 150,000 premature deaths annually.
If true, this means the human cost to reducing coal generation would be far greater than the number of lives the U.S. Environmental Protection Agency has estimated will be saved by new air quality standards. For example, the EPA has estimated its new 8-hour ozone standard would reduce premature mortality by 1,000 to 3,000 lives annually, while the new PM2.5 standard for fine particulates would result in 15,000 fewer premature deaths annually.
It is commonplace for regulations to fail to provide the benefits that its sponsors promise, while having harmful unintended consequences. This is particularly true for regulations forcing a shift from coal-fired electric power generation to other forms of energy. It would have almost no impact on future climate change, but it would impose costs on the economy and harm the health of Americans.
I don’t know the details of TXU’s plans to build 11 new coal-fired power plants (six of which received preliminary approval in mid-October), and have no idea whether TXU can reduce overall air pollution from their plants statewide, while increasing the amount of electricity they produce. But whether some of all of their proposed coal-fired power plants are eventually built should be made on the basis of a sound analysis of the present and future need for additional energy when weighed against the pros and cons presented by other possible energy sources.
Together, the Penn State and Brenner studies show that this decision should take into account both the substantial economic impacts and consider the potential indirect public health consequences from reducing coal use.
When the incremental benefits from reduced air pollution and CO2 emissions are weighed against the considerable benefits of low-cost coal generated electricity and the substantial costs from eliminating coal as a power source, coal remains in the black.
Dr. Burnett is a Senior Fellow with the Texas Public Policy Foundation and the National Center for Policy Analysis.