Peabody's Improbable History
Posted August 10, 2014
Amidst hundreds of supporters of the Obama administration’s Clean Power Plan at the Environmental Protection Agency’s hearings last month, a few highly-paid company men and their friends in Congress ventured to sing the praises of the nation’s dirtiest fuel for making electricity. Indeed, one actually sang his praises, giving a moving rendition of “Coal Keeps the Lights On.”
But I was most struck by the comments of Fred Palmer, Senior VP for Government Relations at the St. Louis-based coal giant Peabody Energy. To hear him and his company tell it, coal is better than harmless: It is good for our health, helps plants grow, and lifts millions out of poverty.
Peabody Energy’s version of our history and its vision of our future reminded me of another Mr. Peabody, the highly educated beagle who, with his boy Sherman, travels through time in the Way-Back Machine to keep hapless historical figures from screwing up the timeline.
What would Mr. Peabody think if he’d come back from the future to hear Fred Palmer? And what would Mr. Peabody do to keep Peabody Energy from screwing up our timeline?
Let’s help Mr. Peabody and Sherman debunk Fred Palmer’s claims point by point.
1) Coal Improves The Nation’s Health and Lowers Our Electric Costs: “Using coal for electricity enables people to live longer and better and drives the lowest U.S. electricity costs for any major fuel,” Palmer told the EPA panel in Washington. EPA’s proposed power plant standards, he said, “would endanger human health and welfare by making electricity—one of life’s necessities—scarce and expensive.”
I am sure that Mr. Peabody and Sherman would help Fred Palmer see that Americans will both breathe easier and save money if EPA’s Clean Power Plan is allowed to go forward.
While it’s true that access to electricity leads to longer and healthier lives, EPA’s carbon pollution standards won’t cut anyone’s access to electrons. In fact, because money-saving energy efficiency is a central strategy under EPA’s emissions reduction plan, EPA projects that the average American household’s electric bill will go down, not up. In fact, NRDC’s analysis of an even stronger emission reduction plan that we put together shows that some families could save more than $150 a year — even in states with lots of coal-burning power plants.
Palmer talks about electricity “prices,” not electricity “bills.” But people pay bills, not prices. If you need less electricity because your refrigerator, your air conditioners, your lights, and your other appliances work more efficiently and use less power, your monthly electric bill will go down, even if rates – the price per kilowatt-hour – go up.
And while electricity improves our lives, getting electricity from coal cuts thousands of lives short every year. Here in the U.S., even with the pollution reductions we’ve made over the last four decades under the Clean Air Act, the remaining pollution from coal-burning plants is still killing and sickening tens of thousands of Americans each year. Pollution from coal-fired power plants is still responsible for more than 13,000 premature deaths, 20,000 heart attacks, and hundreds of thousands of asthma attacks each year. Those asthma attacks alone cost the nation’s wage earners a walloping $8 billion in lost income—about $3,300 per person with asthma. If you have an asthma attack, how productive can you be at work? And if you’ve been up all night monitoring your child’s breathing, or taking her to the emergency room, how productive will you be at work, or your child at school, the next day? Cost estimates of coal’s health impacts range from $100 billion a year to more than half a trillion dollars annually.
By helping us transition to a cleaner and more efficient electricity system, EPA’s carbon pollution standards will produce huge additional health benefits beyond reducing the health consequences of climate change itself. Additional reductions in soot and smog-causing pollutants from coal-fired power plants will prevent 15,000 asthma attacks annually and between 900 and 2,300 premature deaths each year, according to public health experts at Syracuse and Harvard Universities.
2) California Proves Cleaner Power Will Torpedo Our Economy: “[P]erhaps the most extreme and disturbing example” of what might happen to the country, Palmer’s testimony continued, “is California, a state the EPA lauds as its energy model.” “California has exacerbated energy inequality and turned away business based on high renewable [energy] mandates and energy taxes,” Palmer claimed. “California power prices are 40 percent higher than the U.S. average. Businesses are exiting at a 3:1 ratio, and 700,000 manufacturing jobs have been lost since 2000. Is this really our model?” Palmer asked.
Palmer’s got his California facts quite mixed up, and Mr. Peabody would surely set Palmer straight.
In fact, California’s record on energy efficiency and renewable energy is a good model for the rest of the country. The Golden State has used these tools to significantly cut both emissions and energy bills over the last 35 years. As described above, California’s electricity costs slightly more per kilowatt hour than the national average. But residential and industrial electricity bills — what customers actually pay each month —are well below the national average. In 2012, for instance, the average Californian paid $90.54 a month for his or her electric bill, while the average American paid $108.90.
It’s true that California lost 700,000 manufacturing jobs, but that’s in line with the 6 million manufacturing jobs the whole country lost between 2000 and 2009, according to the federal Bureau of Labor Statistics – since one out of eight Americans lives in California, the manufacturing job trend there pretty much mirrors the national trend. Looking across all sectors, however, California’s job growth is better, not worse, than the national average — with a 2.6 percent increase in 2013, compared to 1.7 percent for the nation as a whole. The clean tech sector is leading the way. It’s the fastest growing sector of the Golden State economy. EPA’s standards will stimulate similar growth across the country.
3) Continuing to Burn Coal Helps Low-Income People Pay Their Bills: Palmer also stated Peabody Energy’s profound concern over the impact of EPA’s standards on the “record 115 million Americans [who] qualify for energy assistance and 48 million Americans [who] live in poverty.” Mr. Peabody and Sherman were curious about the depth of that concern. So they checked with experts on low-income energy assistance to see whether Peabody Energy had ever used its considerable lobbying power on behalf of the low-income energy assistance program called LIHEAP or the federal weatherization program.
“I don’t think they see LIHEAP or Weatherization as central to their mission,” said Mark Wolfe, executive director of the National Energy Assistance Directors’ Association, which pushes for energy assistance programs. “There’s no evidence of oil companies or coal companies trying to keep LIHEAP or Weatherization going,” said Wolfe, who called Palmer’s assertion about EPA’s standards and poor people’s energy prices “tortured.”
Then there’s the matter of taking care of Peabody Energy’s own employees and its retirees. In 2007, the company spun off its union mines in Appalachia into a separate company, Patriot Coal, and left it with responsibility for more than 10,000 union retirees and their dependents. Peabody remained highly profitable. But many say Patriot was designed to fail, especially because of it mile-high retiree-to-worker ratio and the more expensive, higher sulfur coal it mined. Patriot went bankrupt in 2012. A judge allowed Patriot to shirk its pension and healthcare responsibilities to retirees, many of whom have serious health problems after years of working in mines. After the United Mine Workers ran a high-profile campaign against Peabody, and an investment firm helped bail Patriot out of bankruptcy, Peabody contributed more than $400 million to a Voluntary Employee Benefit Association fund. According to the UMW, the fund leaves a significant shortfall.
4) Burning More Coal Is Great for Agriculture: Though he didn’t mention it at the EPA hearing, Fred Palmer is well known for claiming that burning more coal will be good for the world’s farmers. During his former job as head of the Western Fuels Association, Palmer also ran the “Greening Earth Society,” which in the 1990s promoted the view that crops would grow better if we bulked up the atmosphere with more CO2 – a view championed by other contrarians like the Cato Institute’s Pat Michaels. (Though still showing a contrarian streak, the current website of the Greening Earth Society seems a bit weedy, like an untended garden.) Never mind that crops need water, and climate models predict more drought in the world’s breadbaskets. Higher atmospheric CO2 seems to be better for allergy-causing weeds than useful crops.
5) Coal Is The Answer To Developing Countries’ Energy Needs: Though Mr. Palmer didn’t address it at the EPA hearings, he and his company aggressively argue that coal-fired power is essential to lifting millions out of poverty in the developing world.
The truth is that Peabody Energy is chasing economic growth, not driving it. Palmer and Peabody see fast-growing markets around the world, and they want a piece of the action by shipping Peabody’s coal to those markets.
It’s true that more than 1.4 billion people still live without electricity, a fact that undoubtedly impedes their rise out of poverty. But just as in the United States, coal isn’t the only option for bringing them light and power. Perhaps Mr. Peabody and Sherman could use the Way-Back Machine to help Fred Palmer see the future: That building coal plants everywhere is a recipe for endlessly worsening the devastating consequences of climate change that developing countries, even more than developed ones, are already experiencing —parching droughts, killing heat waves, deadly rainstorms and floods, and stronger hurricanes and typhoons.
And it’s a recipe for the choking, blinding air pollution that afflicts mega-cities like Beijing and Delhi, cutting years off millions of people’s lives. The World Health Organization blames 7,000,000 deaths each year – one in eight deaths worldwide – on air pollution. “This finding more than doubles previous estimates and confirms that air pollution is now the world’s largest single environmental health risk,” WHO said. “Reducing air pollution could save millions of lives.” Building more coal-fired power plants works in the opposite direction.
Just as many developing countries have leapfrogged over land-lines to cell phones, so can many countries bypass centralized, coal-fired power plants and go to cleaner power sources and more appropriate technology, such as off-the-grid renewable energy.
So when you hear from coal execs like Fred Palmer or see Peabody Energy’s flashy web ads telling you how great coal is for our health and our economy, and telling you coal can “brighten the many faces of global energy poverty,” remember who’s talking and what they really care about. This really is “Peabody’s Improbable History.” Let’s work together, starting with EPA’s Clean Power Plan, to make sure that we choose a different path.
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