National Mining Association (NMA) President and CEO Hal Quinn has responded to press reports that the Obama administration is considering market enticements to switch coal for natural gas in US electricity generation as part of the administration’s efforts to secure sufficient votes for climate legislation. He says “Creation of an artificial electricity generation market for natural gas in place of affordable, abundant and reliable coal is bad public policy and undermines the administration’s economic and energy objectives and the nation’s needs on a number of fronts. NMA hopes these press reports are incorrect and the administration is not considering such ill-founded public policy for the following reasons:

• “Increased energy prices will cost jobs and harm the economy. Coal-based generation is the nation’s most affordable electricity. Switching out coal for gas will lead to higher energy prices for businesses, manufacturers and households when nearly 15 million Americans are still looking for work and our economy is weak. Rising natural gas prices have consistently outpaced the cost of electricity. In 2008, natural gas generated 22% of US electricity while accounting for 54% of annual fuel expenses of the electric industry. Over the last ten years, when manufacturers paid on average 48% more for electricity, they paid 268% more for natural gas and lost more than 3 million jobs because of high natural gas prices, according to Industrial Energy Consumers of America

• “Vital carbon capture and storage (CCS) technology will be thwarted and technology exports foregone. The world is looking to the development and deployment of CCS technology along with other advanced clean coal technologies as the most affordable and effective ways to control carbon emissions. According to the International Energy Agency, CCS deployment can reduce the costs of achieving carbon reduction goals by 70%. If the US – with the world’s largest coal reserves – creates a false market for gas and does not aggressively pursue CCS technology, not only will we lose important export markets, we likely will doom worldwide deployment of this vital technology

• “Energy security will be compromised. While natural gas is currently used to generate approximately 20% of US electricity and makes a valuable contribution to our energy mix, the ability of domestic reserves to meet a significantly greater portion of US electricity demand is constrained by a number of factors, including transmission and system dispatch factors; natural gas supply and price; and transportation and storage issues, as recently detailed by the Congressional Research Service. If an artificial market is created for natural gas and domestic sources cannot meet demand, imported gas will take up the slack, as it has in the past.”

He concluded: “Artificial energy markets are leading to higher energy costs for American businesses and consumers and have not demonstrated an ability to generate good-paying, long-term jobs for US workers. As recent analyses have shown, per billion dollars of investment, coal-based generation outperforms gas, solar and wind in the creation of construction and operating jobs. Adding another layer of distortions to our energy markets is not in the nation’s interests and is bad public policy that we hope the administration has no interest in pursuing.”