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Commentary: Coal Power in the Black: A Boon for the Economy and Human Health

By Sterling Burnett, KERA 90.1 Commentator

Dallas, TX –

Texas will need more electric power in the coming years - lots more - and coal will be critical to meeting those power needs.

While coal, like every other energy source, has negative environmental impacts - environmentalists bemoan coal-fired power plants as a major source of air pollution and greenhouse gas emissions - it is the lowest-cost source of reliable power. It is also a secure energy source. The US contains more than a quarter of the world's reserves, equaling a 250-year supply. As a result, coal-fired power plants generate 52 percent of the electricity in the United States.

However, 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 potential impact of replacing coal with energy sources such as natural gas and a 10 percent mix of renewables. By 2015, they estimated, cutting coal-fired electric power generation by 33 percent would reduce GDP by $166 billion, household income by $64 billion and would cut employment by 1.2 million jobs. Larger cuts in coal use would result in greater economic losses.

Surprisingly, eliminating coal would also, although 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 Federal government estimates that proposed climate change policies could displace 78% of U.S. coal power. Applying his model to these 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 Environmental Protection Agency has estimated will be saved by new air quality standards. For example, the EPA estimates its new ozone standard would reduce premature deaths by 1,000 to 3,000 lives annually, while the new standard for fine particulates would result in 15,000 fewer premature deaths.

It is common for legislation to fail to provide the benefits that its sponsors promise, while having harmful unintended consequences. This is particularly true for legislation forcing a shift from coal-fired electric power generation to other forms of energy.

I don't know the details of TXU's plans to build 11 new coal-fired power plants, 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.

Sterling Burnett is a Senior Fellow with the National Center for Policy Analysis in Dallas.

If you have opinions or rebuttals about this commentary, call (214) 740-9338 or email us.