Senate Minority Leader Mitch McConnell is hopping mad at Obama. Why? Well, McConnell is from Kentucky, one of the coal-producing states that’s about to take it in the chops from new Environmental Protection Agency (EPA) regulations.
McConnell explained the reason for his anger, saying, “The Obama administration has been waging a war on coal and Kentucky jobs ever since the president was elected. If these reports are accurate, his latest proposal is not only an open war on coal jobs, but on all the residents, jobs, and businesses across the commonwealth that rely on this vital industry.”
And guess what? McConnell is right. These regulations will sock it to Kentucky. The mines and coal-producing companies will likely have to lay off more employees. But what McConnell and the rest of the D.C. insiders have failed to mention is that everyone with a light switch, TV, or any other use for electricity will also be a victim of these new regulations.
You see, coal is a cheap way of generating electricity, both in the United States and around the world. And coal plants have been the price leader because the resource is so plentiful. It’s not an exaggeration to call the United States the Saudi Arabia of coal. We have vast stores of it in the Appalachian and Rocky Mountains regions. In fact, it’s the fuel that made America an industrial power house.
But environmentalists don’t like coal because of its carbon footprint. You see, power generation creates almost 40% of the greenhouse gases emitted in the United States, and coal is a prime offender. But natural gas, on the other hand, emits about half as much carbon dioxide as coal. By moving toward natural gas, Obama will please the environmentalist lobby, a core constituency of his.
Natural Gas Takes the Lead
As a result of the hydraulic fracking boom, America has been swimming in cheap natural gas. Prices dropped from about $12 per million BTU in 2008 to about $2 in 2012…but the trend in 2013 is in the other direction. As gas prices rise past $4 per million BTU, it’ll once again become less expensive for utilities to burn coal.
But with these new regulations, coal’s share of the market will shrink rapidly, from 51% in 2003 to 42% in 2011 to a projected 35% in 2040, says the Energy Information Agency (EIA).
According to the EIA projections, the U.S. will build only gas-fired plants from here forward. Coal technology just can’t achieve the carbon reduction Obama’s EPA is demanding. And the bottom line for you, the consumer or businessman, is higher electricity bills. America traditionally has paid some of the lowest electricity bills in the world. The cost for electricity ranges normally from $0.08 to $0.20 per kilowatt hour in the United States… and coal and hydroelectric power are the reasons why our prices remain so low.
Now, though, we need to get ready for this to change. The states that were leading the regulatory charge against coal, California and New York, already pay the highest power bills in the country. And D.C. is plotting to make the rest of our power bills higher too. Obama wants us all to pay more, and his EPA is poised to pass these coal regulations to make it happen.
A Hidden Silver Lining
The permanent class is lining up in D.C. to make money off this energy trend. They know how to follow the policies straight to the profits.
Luckily, we do too. We recently added a firm to the National Treasure Portfolio, part of Constitutional Wealth, that’s poised to make a bundle on higher electricity prices. In any community that has power bills above 15 kWh, this firm will mint money.
If you haven’t checked out Constitutional Wealth yet, your potential returns from this single stock will more than pay the risk-free subscription.
This article originally appeared at CapitolHillDaily.com and is reprinted here with permission.