Testimony of Cecil E. Roberts, President
United Mine Workers of America
Before the
Committee on Environment and Public Works
United States Senate
November 15, 2001
Mr. Chairman and members of the committee:
As president of the nation=s first and foremost energy union, I
appreciate the opportunity to participate in the committee=s consideration of legislation to reduce
emissions from coal-fired powerplants.
The United Mine Workers of America (UMWA) supports additional reductions
in sulfur dioxide (SO2), nitrogen oxides (NOx) and
mercury from coal-fired power plants, provided that the reductions are designed
in a way that preserves coal miners jobs.
However, we do not support reduction schemes that force or encourage
electric utilities to switch away from coal, thereby causing economic harm to
coal miners and their communities.
UMWA members mine, process, transport and
consume coal in their daily jobs. That=s how most of them put food on the table, pay
their bills and build a future for their families. Their economic interests are entwined with energy and
environmental issues more than most other workers. The issues being discussed by the committee with regard to S. 556
not only raise the question for them of how much their utility bills may rise
as we seek to reduce emissions, but whether they can remain gainfully employed
and support their families.
The Role of Coal in America=s Energy Supply
Coal is an indispensable part of America=s energy supply, and the United States is
blessed with an abundance of coal. The
latest estimates indicate that the U.S. has a demonstrated coal reserve base of
over 500 billion tons, with an estimated 275 billion tons of recoverable
reserves. At current production rates, this represents about 275 years of
recoverable coal reserves. Coal
represents about 95% of all U.S. fossil fuel energy reserves. About one-quarter of all the world=s known coal reserves are found in the United
States. U.S. recoverable coal reserves
have the energy equivalent of about one trillion barrels of oil. That is comparable to all of the
world=s known oil reserves.
Coal is used to generate some 56% of our
nation=s electricity. To back coal out of our nation=s energy supply mix means that we would have to find some other fuel to
replace it, most likely natural gas.
Such a fundamental shift in U.S. energy policy brings into question not
only the cost, but also the availability of natural gas supplies. We know that we have enough identified,
economically recoverable coal reserves to last for hundreds of years. While sufficient domestic supplies of
natural gas may be currently available, future availability--and cost--is much
less certain than in the case of coal.
We believe that substantial increases in demand for natural gas
inevitably will lead to higher costs and greater dependence on foreign sources
for supply. And we should all be
mindful of the five-fold increase in natural gas prices that some of our citizens
faced last winter. Environmental
policies that drive electric utilities away from coal and toward more natural
gas use may well be in conflict with our energy policy goals of maintaining a
reliable, low-cost mix of generating sources that can temper the price increase
of one particular fuel.
While we are blessed with an abundant supply
of coal, we are challenged in its use because of the nation=s concern about the environment. Americans demand a cleaner environment at
the same time they demand low-cost, reliable and available energy. For coal to continue to play the vital role
that it can--and should--play in our energy mix, we must ensure that coal is
consumed with the minimum amount of emissions that technology will allow. This means that we must continue to develop
highly advanced technologies to convert coal to a usable form of energy more
efficiently and to capture any harmful emissions before they escape into the
atmosphere.
How Coal Miners Fared Under the 1990 Clean
Air Act Amendments
Before getting to specific comments on S.
556, let me say at the outset that coal miners did not fare well under the
Clean Air Act Amendments of 1990.
Electric utilities engaged in substantial fuel switching in response to
Title IV acid rain controls and UMWA members in the high sulfur coal producing
regions in northern Appalachia and the Midwest were displaced by the
thousands. Nearly 60% of the SO2
reductions achieved in Phase I were accomplished through fuel switching and
only about 28% were accomplished through installation of scrubbers. This coal switching proved to be devastating
to high sulfur coal mining communities.
Let me cite just a few examples.
In 1990, coal mines in northern West Virginia produced 56.6 million tons
and employed 10,053 coal miners. In
2000, production had fallen to 37.6 million tons and employment had declined to
3,712 coal miners, a 33.6% drop in production and a 63.1% drop in employment. In Ohio, coal production was 35.3 million
tons in 1990 and the state=s coal mines employed 5,866 mine workers. By 2000, output had declined to 22.3 million tons and employment
had dropped to 2,688 mine workers, a 36.8% drop in coal production and 54.2%
decline in coal mining jobs. In
Illinois, coal production was 60.4 million tons in 1990 and 10,018 coal miners
were working. By 2000, production had
fallen to 33.4 million tons (a 44.6% reduction) and only 3,454 coal miners were
working (a decline of 65.5%). In
western Kentucky, 5,586 coal miners produced 44.9 million tons in 1990; by
2000, only 2,510 coal miners were employed (a drop of 55.1%) and production had
declined to 25.8 million tons (a drop of 42.6%).
That=s a 78 million ton loss of coal production
and over 19,000 lost jobs in those four states alone. Overall, the major eastern coal producing states lost over 113
million tons of coal production from 1990 to 2000 and employment is down by
over 30,000 jobs.
Although nationwide coal production was
essentially unchanged over the decade, the high sulfur coal regions suffered
serious economic harm as a result of the 1990 Amendments. And the sad fact is that the coal producing
states that gained output from the utilities= fuel switching did not gain significant numbers of new jobs. Having gone through that experience with the
1990 Amendments, we view with a skeptical eye any legislative proposal that
sets emission reduction targets and timetables that surpass our technological
capabilities.
S. 556 Would Be Devastating to Coal Miners
and Their Communities
We believe that S. 556 falls into that
category. Indeed, it appears from
government analyses that S. 556 may threaten to disrupt coal mining communities
far more than Title IV. Emission
reductions called for in the bill would be achieved in large part by utilities switching
away from coal, not by installation of control technology. As we understand it, S. 556 would require
electric utilities to meet the following emission reduction targets by 2007:
$
Sulfur dioxideB75% reduction from Title IV Phase II levels,
a cap of about 2.2 million tons nationwide;
$
Nitrogen oxidesB75% reduction from 1997 levels, a cap of
about 1.5 million tons nationwide;
$
MercuryB90% reduction from 1999 levels, a cap of
about 5 tons nationwide; and,
$
Carbon dioxideBreduction to 1990 levels, a cap of about 500
million tons nationwide.
We have reviewed economic analyses of S. 556
conducted by the U.S. Energy Information Administration (EIA) and the U.S.
Environmental Protection Agency (EPA).
These studies find that implementation of the targets and timetables in
S. 556 would result in a one-third to one-half reduction of coal use in the
electric utility sector. Much of the
loss in coal production stems from the bill=s requirement for a 90% reduction in mercury and the 1990 carbon
dioxide cap. Technology to control
mercury is in various stages of research and development, and is unlikely to be
in widespread commercial application by 2007.
As a result, utilities faced with a 90% reduction requirement are likely
to switch from coal to natural gas. In
the case of carbon, there is no current technology to capture and sequester
carbon from electric utility emissions.
Indeed, the federal government has only recently begun research and
development of such technologies. Faced
with a requirement to return to 1990 carbon emission levels, utilities are
expected to engage in substantial fuel switching away from coal.
Because the mercury and carbon dioxide
reductions called for in S. 556 cannot be met with technology, the end result
of the bill is to require utilities to switch from coal to natural gas. The U.S. currently produces about 1.1
billion tons of coal annually. In its
analysis of S. 556, EIA found that implementation of the reductions would cause
the loss of 506 million tons of coal production nationwide from its reference
case in 2010, rising to a loss of 657 million tons in 2020. Even if we assume that there would be no
growth in coal production in the reference case, S. 556 would mean the loss of
319 million tons by 2010 and 423 million tons by 2020. Such coal market disruptions far exceed the
coal switching that resulted from Title IV.
In addition, these losses are likely to have a negative economic impact
all coal producing states, not just the high sulfur states in the eastern coal
fields. For example, EIA projects a
loss of 190 million tons in 2010 from eastern coal producing states (from a
base of 564 million tons) and a loss of 316 million tons from western states
(from a base of 725 million tons). We
have attached summary coal production impacts from two EIA studies at the end
of this statement.
What would be the economic cost of this loss
of coal production? Tens of thousands
of coal miners would lose their jobs in areas of the country that have little
or no comparable alternative employment.
These are the jobs, in fact, that support other jobs in the region. Coal mining jobs, along with the railroad
and electric utility jobs that depend on coal mining, tend to be the economic
engines of their communities. As these
jobs disappear, other jobs that directly or indirectly provide goods and
services to the these industries and their workers are affected. Using conservative economic multipliers from
the U.S. Commerce Department, we estimate that the loss of 190 million tons of
coal in eastern coal producing states in 2010 would mean the loss of $4.7
billion annually in direct coal mining revenue, $9.1 billion per year in lost
economic output in all industries, $2.5 billion per year in lost household
earnings, and the loss of more than 85,000 jobs in all industries. In the western states, the loss of 316
million tons of coal by 2010 would mean the loss of $2.9 billion annually in
direct coal mining revenue, $5.3 billion per year in lost economic output in
all industries, $1.4 billion per year in lost household earnings, and the loss
of nearly 50,000 jobs in all industries. In addition, over a hundred thousand
retired coal miners look to the coal industry for lifetime retiree health
benefits that were earned during their working lives. If we wipe out half the coal industry, where are the retirees
going to get their health care? Who
will finance those life-saving benefits when we have removed $7.6 billion of
revenue from the coal industry?
The UMWA believes the burdens that would be
placed on coal miners and their communities by S. 556 are unacceptable. They should not be asked to give up their
jobs, their health care and their economic futures because of arbitrary
deadlines and reduction targets that cannot be reasonably expected to be met
with available technological controls.
S. 556 would be punitive in the extreme for coal miners and their
communities. It should be rejected for
more cost-effective reductions that will allow coal to continue its vital role
in our energy mix and coal miners to continue their employment.
The UMWA Supports A Three-Pollutant Approach
That Preserves Coal Miners= Jobs
The UMWA supports appropriate additional
reductions in sulfur dioxide, nitrogen oxides and mercury from coal-fired powerplants,
provided that they are designed in a way that preserves coal miners= jobs.
We do not support inclusion of carbon dioxide in the committee=s emission reduction bill. By enacting a three-pollutant bill, we
believe that the U.S. can make considerable strides in environmental control
and public health while still pursuing a national energy strategy that includes
coal. Inclusion of carbon dioxide in
this bill, in our opinion, force utilities to switch away from coal and will
unnecessarily delay, and possibly prevent, its enactment.
A clear plan for reducing emissions of sulfur
and nitrogen oxides could provide the electric utility industry with greater
certainty for planning and investments, lead to the simplification of
regulatory programs, and create significant job opportunities for the
construction and operation of pollution control devices. At the same time, such a strategy would
allow coal miners and their communities to retain the high-paying jobs that
they so desperately need.
In reviewing S. 556, we are concerned that
the legislation has gone too far in specifying the magnitude of emission
reductions to be accomplished over the next decade. We believe that a more realistic--and more cost-effective--set of
reductions can be enacted that would not conflict with the nation's need to
continue using coal, while improving air quality and enhancing the use of
available air pollution control technologies.
For example, EIA=s analyses suggests that a 50%-65% reduction in SO2 and NOx
could be achieved in the electric utility sector without severe loss of coal
markets and coal mining jobs. We
believe that these reductions should occur in one phase, with appropriate
deadlines to ensure that utilities will have enough lead time for the orderly
installation of technology without potential disruptions of the nation=s power supply. In addition, the committee should consider the compliance
deadlines with an eye toward the financial condition of the nation=s electric utilities, particularly the
medium-sized utilities.
In terms of mercury, we are concerned that
technological controls for reducing mercury emissions from coal-fired
powerplants are in a very early stage of commercial development. Setting an overly ambitious target for
controlling mercury--where there is simply no evidence of an imminent threat to
public health--could be harmful to coal mining communities and be at odds with
the larger national energy policy debate.
Therefore, we recommend that mercury controls occur in two or more
phases.
The UMWA participates in an EPA workgroup on
mercury control. We are not confident
that technologies will be available by 2007 to ensure S.556's reductions are
achieved. It is likely that a more
modest reduction could be achieved at substantially lower costs through
available technologies, without imposing any risk to public health. In all events, it would be desirable to
postpone setting a final mercury target until the "co-benefits" of mercury
reductions through NOx and SO2 controls are demonstrated
through a first phase control program focused on reducing these emissions.
A target for annual NOx emissions
of about 2 million tons should be feasible with the use of selective catalytic
reduction (SCR) and other NOx control equipment. However, some utilities are encountering
difficulties with SCR equipment in boilers designed to burn high-sulfur
coals. Again, these difficulties
highlight the need to set reasonable deadlines to ensure that the technologies
used to meet the reductions work well in tandem.
Based on our experience with the Ozone
Transport Assessment Group process, and EPA's subsequent NOx SIP
Call, we would recommend a NOx emission rate of 0.20 lb. NOx/MMBTU
as the planning basis for new NOx control requirements outside of
the eastern 18-State SIP Call region, and for non-ozone season emission
controls within the SIP Call region itself.
We recognize that the 0.15 lb. ozone season limit on plants in the SIP
Call region would be difficult to change given recent court decisions.
In general, a NOx emission limit
of 0.20 can be achieved more readily than a limit of 0.15 because it provides
greater opportunities for the use of low-NOx burners, overfire air,
and other less capital-intensive equipment.
Unlike the densely-populated East, there are no ozone problems in
western states other than California justifying an extremely low NOx
limit below the levels otherwise required by the Clean Air Act.
S. 556's proposed 2.2 million ton cap on
annual SO2 emissions, compared to the 8.9 million ton cap that will
result once the 1990 acid rain program is fully implemented, would represent a
very significant further reduction of sulfur emissions that contribute to acid
deposition and to other environmental problems. The 8.9 million ton SO2 cap in the 1990 Clean Air Act
Amendments itself represents a 50% reduction of SO2 emissions from
1980 levels.
Based on a variety of studies that have been
done in the private sector and by government agencies, we see a somewhat more
modest SO2 reduction target--roughly in the range of 3.0 to 4.0
million tons--as representing both a technically achievable and cost-effective
control level that would not conflict with our goal of ensuring that coal
miners can continue to provide for their families.
An SO2 and NOx control
plan along these lines could be implemented as a first step in a longer-range
plan to reduce mercury emissions. The
experience in mercury "co-benefits" achieved by the first phase
controls for SO2 and NOx emissions would be vital in
assessing the feasibility of ultimate mercury reduction targets. In light of this, the committee may want to
consider early reduction allowances for SO2 controls that also
reduce mercury emissions on the theory that such reductions are more valuable
than those strategies that only reduce SO2 alone. There is precedent for such extra credit in
Title IV of the 1990 Amendments, which allocated 2:1 bonus allowances to
utilities that chose to install control technology.
In summary, Mr. Chairman, the UMWA is
prepared to work with the proponents of additional reductions in SO2,
NOx and mercury emissions in coal-fired power plants, provided that
the reduction provisions are designed in a way that preserves coal miners= jobs.
We look forward to working with you to achieve these goals.