Skip to content

Killing Coal

July 14, 2010

Coal fired power plants generate half our electricity.

During his campaign the president said, “If somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them.”

Well, cap & trade will probably bankrupt every coal fired power plant in the United States — or every married couple will pay between $7,000 and $15,000 more for their electricity.

How can this be when politicians tell us that cap & trade legislation will help America?

A good example is the cap & trade bill cosponsored by Senator Collins (r) from Maine.

The bill establishes a minimum price for carbon of $7.00, which sounds innocuous to the casual reader.

However, the bill then establishes a formula for increasing the minimum price every year beginning in 2013. Assuming inflation is 3% annually, the formula is $7 multiplied by (6% capital cost + 3% inflation + 0.5% arbitrary kicker) compounded over the next 38 years until the year 2050.

The result?  A carbon price of $220 per ton.

Coal fired power plants emitted 1,894,000,000 tons of CO2 in 2004. Without eliminating coal fired power plants they will continue to emit this much CO2, and possibly more.

Multiply the 1,844 million tons by $220 per ton in 2050 and coal fired power plants will have to pay the government over $414 billion every year for carbon permits, and increase their price of electricity to recover the same amount – or go bankrupt.

The $220 is the minimum price for carbon. The maximum price, using a similar formula established in the bill, is $466 per ton.

Imagine the outcome if 1,884 million tons was multiplied by $466 per ton.

The president was right, cap & trade legislation will bankrupt coal fired power plants.

At present there is no way to eliminate CO2 from the exhaust of coal fired power plants which means they will have to shut down.

Wind and solar can’t produce anywhere near the amount of electricity produced by coal.

Natural gas power plants also emit CO2 so they will be paying the same $220 per ton of CO2 as will coal fired power plants. Or $466 per ton if the maximum price is used.

If carbon capture and sequestration is ever developed it will create other problems that will still result in a shortage of electricity. See

Unfortunately, Senators try to slip innocuous prices for carbon into their bills to begin with, but always increase the price every year with a formula similar to the one in the bill cosponsored by Senator Collins (r) Maine.

They say, “Look, it’s not much by 2020,” and ignore the cost as we get older, and the cost to our children and grandchildren when they get married.

This is a shell game that is unworthy of our Senators.

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s