NEW ENERGY BLOCKED BY OLD COAL

The legislators who read this story in the Post are largely committed to "clean coal" as the way out of the greenhouse gas emissions problem. So what do they do about this? Fight their constituents or the future?

Federal Loans for Coal Plants Clash With Carbon Cuts
Steven Mufson, May 13, 2007 (Washington Post)

WHO
The Office of Management and Budget (OMB), National Rural Electric Cooperative Association (NRECA), Agriculture Department's Rural Utilities Service (RUS, from FDR’s 1935 Rural Electrification Administration), James R. Newby, assistant administrator; Environmental groups
This is "clean coal" -- will old coal get out of its way? (click to enlarge)
WHAT
The RUS plans to use billions of dollars in low-interest loans (available to it via depression-era programs) to build old-fashioned, high-pollution, high-greenhouse gas emission coal-burning power plants. OMB and environmental groups want to stop this. NRECA is protecting RUS.

WHEN
The rural electric cooperatives plan to spend $365 Billion over 10 years.

WHERE
RUS serve rural and suburban areas. Where the area is rural and fading, the low cost energy may be the difference between whether a community survives or not. Where it is suburban, the loans are a disservice to the spirit of the original legislation and often is not even used for energy purposes.

WHY
- The proposed coal plants would negatively offset all planned emissions-control efforts for the 10-year period.
- The rural co-ops get 80% of their electricity from coal while the rest of the country gets 50%.
- The RUS is 70 years old and its purpose, getting electricity to rural areas, is long since accomplished.
800 co-ops operating 50+ coal plants are nonprofits and so look for lowest cost operations, regardless of economic externalities. Their low-interest loans help beat the market on power generation by 15%.
- Special interest groups (The Seminole Electric Cooperative, Tampa, The East Kentucky Power Cooperative) may take advantage of the loans and may pressure local representatives to sustain the program. Often, congressmen find themselves torn between fighting the program and keeping their seats.
Just because we loved FDR doesn't mean we want to bring back the Depression.
QUOTES
- Heritage Foundation: "Rather than declare the [1935] mission accomplished [long ago] and disband the expensive subsidy program, Congress continued it and allowed it to become even more generous…"
- Ronald D. Utt, OMB: "Poverty is no longer a characteristic of the agricultural community as it was during the Depression . . . and as areas have grown, the basic clientele are well-to-do people who have nothing to do with agriculture…"
- Wash Post: “Although presidents over the years have tried to curtail the rural-electricity lending program, it has survived, proving one of the basic laws of legislative thermodynamics: Creating a government program is easier than killing one.”