Statement on behalf
of
United Mine Workers
of America
Eugene M. Trisko
Attorney at Law
P.O. Box 596
Berkeley Springs, WV
25411
(304) 258-1977
(304) 258-3927 (fax)
emtrisko@intrepid.net
April 8, 2003
Mr. Chairman and members of the
Committee: I am Eugene M. Trisko, an attorney in the District of Columbia. I am
pleased to be here today to testify on behalf of the United Mine Workers of
America (UMWA), the labor union representing the nation’s organized coal
miners. I have worked with the UMWA for some 20 years on issues related to the
Clean Air Act and global climate change, including the development and
implementation of the Clean Air Act Amendments of 1990, the Byrd-Hagel climate
resolution, and the proposed Clear Skies Act.
The UMWA supports additional
reductions in sulfur dioxide (SO2), nitrogen oxides (NOx)
and mercury from coal-fired power plants, provided that the reductions are
achieved in a way that preserves coal miners’ jobs. UMWA members mine, process
and transport coal in their daily jobs. Their economic interests are entwined
with energy and environmental issues in a very direct manner.
Since 1990, the UMWA has lost
thousands of coal mining jobs as a consequence of fuel-switching in response to
the acid rain provisions of Title IV. Coal production in major eastern coal producing states declined by
more than 113 million annual tons between 1990 and 2000, while more than 30,000
coal mining jobs were lost. Most of these reductions and job losses were the
result of switching from higher- to lower-sulfur coals to meet the emission
reductions required by Title IV. Dozens of mining communities have all but
ceased to exist across economically-depressed Appalachia and the rural Midwest.
The union is understandably sensitive to the risk of additional job losses
through new multi-emission legislation.
For these reasons, the UMWA
appreciates the concerns that the Administration has expressed toward its
members’ interests in the development of the proposed Clear Skies Act, and is
gratified that the proposal reflects UMWA’s suggestions about the need for
incentives to encourage the early installation of control technologies. Our statement today is intended to point out
some remaining concerns about the design of multi-emission legislation.
Background: The Role of Coal in America’s Energy Supply
Coal is an indispensable part of
America’s energy supply. 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 reserves.
Coal represents some 95% of all U.S.
fossil fuel energy reserves. About
one-quarter of global 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, an amount comparable to
the world=s known oil reserves.
More than one-half of our nation’s electricity is generated by coal. To back coal out of our energy supply mix
means that we would have to find another fuel to replace it, most likely
natural gas. Such a fundamental shift
in U.S. energy policy would bring into question not only the cost but also the
availability of natural gas supplies. Substantial increases in demand for
natural gas inevitably would lead to higher costs and greater dependence on
foreign sources for supply. At the margin, our gas supplies are imported from
Canada and other sources in the form of LNG.
Natural gas futures prices now
exceed $4 per million BTU at the wellhead, and persist at that level for
contract purchases several years into the future. Gas prices exceeded $10 per
million BTU in many markets this winter. Environmental policies that drive
electric utilities away from coal – which costs about $1 per million BTU at the
mine - and toward natural gas conflict with our energy policy goals of
maintaining a reliable, low-cost mix of generating sources.
The UMWA also recognizes that
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 minimum emissions consistent
with the use of available technologies.
The United States must continue to develop highly advanced technologies
to convert coal to a cleaner and more efficient form of energy.
The UMWA supports in principle the
emission reduction tonnage targets contained in the proposed Clear Skies
Act. The UMWA has some suggested
changes intended to improve the environmental effectiveness of the proposal,
while reducing the risk of large-scale, disruptive fuel-switching.
The union consulted with the
Administration during the development of the Clear Skies Act. UMWA engaged this issue in August 2001 in
response to the release of EPA’s initial “strawman” proposal, calling for, inter
alia, a 2.0 million ton cap on sulfur dioxide emissions to be achieved by
2010. Through a process of inter-agency
negotiations, that proposal was modified to a two-phase program with a 3.0
million ton final cap. The UMWA supported the 3.0 million ton final cap, but
argued for a single-phase program.
The positions that UMWA has taken on
the Clear Skies Act can be summarized as follows:
1) A
single phase approach to reducing SO2 emissions can be developed in a manner
that reduces the risk of fuel-switching by encouraging extensive use of
available emission control technologies, thereby maximizing the “co-benefits”
of mercury reductions;
2) Two-phase
proposals for SO2 control may encourage fuel-switching and resulting job
losses, while reducing the use of control technologies that also achieve
mercury reductions;
3) A
2.0 million ton cap on SO2 emissions is excessively stringent and could lead to
the shut-down of smaller units forced to install emission controls;
4) Differentiating
NOx control requirements between eastern and western states makes sense in light
of OTAG modeling results showing the minor contribution of western NOx
emissions to ozone affecting eastern states; and
5) An
initial target for mercury reductions should be set based on expected
“co-benefit” reductions from a single-phase SO2/NOx control program, with a
subsequent target based on the results of these reductions, and advances in
available mercury control technologies.
In
November 2001, UMWA President Cecil E. Roberts testified before this Committee:
“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.”
With
this background, the UMWA respectfully requests the Committee to consider
constraining the eastern SO2 reductions called for by the Clear Skies Act to a
single phase control program with a reasonable final deadline, perhaps similar
to the 10-year deadline provided by the Title IV SO2 control program.
A
single-phase SO2 program would serve to maximize the use of emission control
technologies such as flue gas scrubbers that also reduce mercury. More
important, emission reductions would be achieved in time to assist states in
attaining the new PM2.5 standard. A
longer-term, two-phase program may not deliver sufficient reductions in time
for states to demonstrate attainment by the expected 2015 attainment
deadline.
Because
NOx controls tend to be added incrementally, from low-NOx burners to selective
catalytic reduction, there is less need for a single-phase NOx control program.
The targets and timetables for NOx reductions also may take into account the
longer-term attainment schedule for the 8-hour ozone standard that EPA is
developing, modeled on the 17-year schedule that Congress approved for the
1-hour ozone standard.
Eliminate Allowance Auctions
The
UMWA urges elimination of the emission auction provisions of the Clear Skies
Act. Requiring sources both to reduce emissions and to pay for auctioned
allowances is a form of double taxation whose rates rise in relation to the
sulfur content of coal. Auction “tax rates” would be highest in West Virginia,
Pennsylvania, Ohio, Kentucky, Indiana, Illinois and other states producing
higher-sulfur coals. Over time, this new energy tax would create a major
disincentive to the use of coal reserves in these states.
Avoid Entanglement with Climate Issues!
The UMWA does 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 is
particularly concerned that efforts to craft new multi-emission control
legislation should remain focused – as the Clear Skies Act is - on reducing the
air pollutants contributing to air quality problems such as nonattainment with
EPA’s new 8-hour ozone and PM2.5 standards.
The
union is strongly opposed to efforts to use the Clean Air Act as a vehicle for
regulating greenhouse gas emissions.
Regulating
greenhouse gases under the air quality framework of the Clean Air Act is not
feasible. It is not possible to set enforceable limits on domestic atmospheric
concentrations of greenhouse gases generated and transported globally. Carbon dioxide, the principal greenhouse
gas, is not harmful to human health and could not properly be classified as a
“criteria” air pollutant.
There
are no commercially available means to reduce carbon emissions from the
electric generation sector. Limits on
carbon emissions would require switching from coal to natural gas or other
higher-cost energy sources, with potentially devastating impacts on the
economies of coal-producing states.
The
Kyoto Protocol exempts rapidly-growing developing nations from limits on
greenhouse gas emissions, and unilateral actions by the United States to reduce
carbon emissions would have no measurable impact on future concentrations of greenhouse
gases. Global greenhouse gas
concentrations are projected to increase into the foreseeable future,
irrespective of ratification and implementation of the Kyoto Protocol. These increases will be driven predominately
by the economic growth of developing nations.
The
UN Framework Convention on Climate Change calls for the United States and other
parties to establish global atmospheric greenhouse concentration targets to
prevent “dangerous” anthropogenic interference with climate. To date, the UN FCCC
process has failed to engage this debate.
Indeed, the FCCC’s “second review of adequacy of commitments” has been
stalled since November 1998 when China and other developing nations refused to
discuss the adequacy of developing country commitments. In Kyoto, developing countries staged a
six-hour filibuster against the U.S. “evolution” proposal, calling for
subsequent negotiation of developing country commitments. These subsequent
negotiations were contingent upon full and complete performance of all Annex I
country obligations under the Kyoto Protocol.
The
deficiencies of the Kyoto Protocol and the UN FCCC process should be resolved
through multilateral negotiations involving developed and developing countries,
potentially leading to a new global agreement on greenhouse gases that
recognizes the “common but differentiated” responsibilities of parties to the
FCCC, with an equitable apportionment of emission limitation targets among all
parties.
The
UMWA’s concerns about including greenhouse gas emission restrictions within
domestic Clean Air legislation are shared by other labor unions. On October 24, 2001, the presidents of seven
labor unions conveyed their views on this issue to this Committee. A copy of their letter is attached to this
statement.
Need to Consider Financial Impacts
The
failure of many state utility restructuring efforts and other economic forces
have degraded the financial health of the electric utility industry. The industry is littered with companies in
or teetering on the edge of bankruptcy.
Credit downgrades are daily news.
The
multi-billion dollar annual cost associated with new emission control
legislation raises questions about the ability of the utility industry to raise
needed debt and equity capital. In many states, it is no longer possible to
simply pass through the costs of new emission controls to utility ratepayers.
Under
these circumstances, UMWA recommends that the Committee consult with the
Congressional Research Service or the General Accounting Office on the
financial implications of proposed emission control legislation. Both the tonnage reductions and the
timetables for compliance should reflect sound financial and economic
assumptions about the ability of the industry to comply.
UMWA
appreciates the opportunity to share its views on the proposed Clear Skies Act
with the Committee, and looks forward to the opportunity for further input to
the development of multi-emission legislation as your deliberations proceed.
Thank
you.