Category Archives: Economic development

New Film Documents Horrors of Coal Mining

blood on the moutain posterBy Peter Galuszka

Several years in the making, “Blood on the Mountain” has finally premiered in New York City. The documentary examines the cycle of exploitation of people and environment by West Virginia’s coal industry highlighting Massey Energy, a coal firm that was based in Richmond.

The final cut of the film was released publicly May 26 at Anthology Film Archives as part of the “Workers Unite! Film Festival” funded in part by the Fund for Creative Communities, the Manhattan Community Arts Fund and the New York State Council of the Arts.

Directed by Mari-Lynn Evans and Jordan Freeman, the film shows that how for more than a century, coal companies and politicians kept coal workers laboring in unsafe conditions that killed thousands while ravaging the state’s mountain environment.

As Bruce Stanley, a lawyer from Mingo County, W.Va. who is interviewed in the film and has fought Donald L. Blankenship, the notorious former head of Massey Energy, says, there isn’t a “War on Coal,” it is a “war waged by coal on West Virginia.”

When hundreds of striking workers protested onerous and deadly working conditions in the early 1920s, they were met with machine guns and combat aircraft in a war that West Virginia officials kept out of history books. They didn’t teach it when I was in grade school there in the 1960s. I learned about the war in the 1990s.

The cycle of coal mine deaths,environmental disaster and regional poverty continues to this day. In 2010, safety cutbacks at a Massey Energy mine led to the deaths of 29 miners in the worst such disaster in 40 years. Mountains in Central Appalachia, including southwest Virginia, continue to be ravaged by extreme strip mining.

As Jeff Biggers said in a review of the movie in the Huffington Post:

“Thanks to its historical perspective, Blood on the Mountains keeps hope alive in the coalfields — and in the more defining mountains, the mountain state vs. the “extraction state” — and reminds viewers of the inspiring continuum of the extraordinary Blair Mountain miners’ uprising in 1921, the victory of Miners for Democracy leader Arnold Miller as the UMWA president in the 1970s, and today’s fearless campaigns against mountaintop-removal mining.”

The movie (here is the trailer) is a personal mission for me. In 2013, after my book “Thunder on the Mountain, Death at Massey and the Dirty Secrets Behind Big Coal,” was published by St. Martin’s Press, Mari-Lynn Evans called me and said she liked the book and wanted me to work with her on the movie project. She is from a small town in West Virginia a little south of where I spent several years as a child and thought some of my observations in the book rang true.

I drove out to Beckley, W.Va. for several hours of on-camera interviews. Over the next two years, I watched early versions, gave my criticisms and ideas and acted as a kind of consultant. Mari-Lynn’s production company is in Akron and I visited other production facilities in New York near the Brooklyn Navy Yard.

Interesting work if you can get it. My only forays into film making before had been with my high school film club where he videographed a coffin being lowered into a grave (in West Virginia no less). I was greatly impressed when I saw the movie at its New York premiere.

Mari-Lynn and Jordan have been filming in the region for years. They collaborated on “The Appalachians,” an award-winning three-part documentary that was aired on PBS a few years ago and on “Coal Country” which dealt with mountaintop removal strip mining.

They and writer Phyllis Geller spent months detailing how coal companies bought up land on the cheap from unwitting residents, hired miners and other workers while intimidating them and abusing them, divided communities and plundered some very beautiful mountains.

Upper Big Branch is just a continuation of the mine disasters that have killed thousands. The worst was Monongah in 1907 with a death toll of at least 362; Eccles in 1914 with 183 dead; and Farmington in 1968 with 78 dead (just a county over from where I used to live).

By 2008 while Blankenship was CEO of Massey, some 52 miners were killed. Then came Upper Big Branch with 29 dead in 2010.

At least 700 were killed by silicosis in the 1930s after Union Carbine dug a tunnel at Hawks Nest. Many were buried in unmarked graves.

While state regulation has been lame, scores West Virginia politicians have been found guilty of taking bribes, including ex-Gov. Arch Moore.

The movie is strong stuff. I’ll let you know where it will be available. A new and expanded paperback version of my book is available from West Virginia University Press.

Blankenship is scheduled to go on trial on federal charges related to Upper Big Branch on July 13.

The Agribusiness Opportunity

Source: New Geography

Source: New Geography

by James A. Bacon

If prostitution is the “oldest profession,” farming is likely the second oldest. Humans have been farming for thousands of years and, if they want to continue to eat, they’ll be farming for thousands of years more. Young people don’t see much future in farming (unless it’s locally grown organic food), and small towns and rural areas in the United States continue to bleed population. But there’s an argument to be made that farming has a great future.

Agriculture is already one of the United States’ biggest export sectors, and overseas markets are likely to continue to grow as developing the world population increases and rising incomes increase food consumption. Those mega-trends portend a favorable environment for large-scale agribusiness capable of moving large volumes of food commodities. Meanwhile, the rise of the locally grown food movement will create opportunities for community gardens and artisinal producers serving local markets.

That future of agriculture may not look like today’s massively mechanized, resource-intensive farming industry. It will be more knowledge-intensive, utilizing insights from biology and ecology to grow crops with fewer herbicides, pesticides and fertilizers. It will be less labor intensive, as leaf and berry pickers replace unskilled migrant workers. As the nature of the business changes, farming could well rebound as a career path for the young. As Joel Kotkin and Mark Schill write in New Geography, “The farms of the future are increasingly high-tech and run by highly skilled professionals and technicians.”

As we think about how to revitalize the economy of rural/small town Virginia, we don’t give much thought to stimulating agricultural production. Perhaps we should.

On the surface, the data compiled by Kotkin and Schill seems none too encouraging for Virginia. They honed in on metropolitan regions with at least 5,000 total jobs falling into one of 68 ag- and food production-related industries, including crop and animal production. Only four Virginia metros made it onto the list (as seen above), and they ranked in the bottom half of the 124 regions listed.  But that’s OK. I see farming and agribusiness as relatively untapped opportunity — fields of opportunities ripe for entrepreneurial innovation.

The Parental Backlash Against SOL Tests

SOL LogoBy Peter Galuszka

Although their numbers are small, more Virginia parents are refusing to have their children take the state’s Standards of Learning tests, saying that test preparation takes away from true education.

In the 2013 -14 school year, 681 SOL tests were coded as parent refusals out of the nearly three million given, with Northern Virginia, Prince William County in particular, having the highest number.

Some parents are annoyed that teachers in public schools spend so much time teaching how to take the SOLs, which are used to measure a child’s educational standing and also rate how well school districts are performing.

“Students can spend up to one-third of their time of the school year preparing for the tests and that is wrong,” says Gabriel Reich, an associate professor of teaching and learning at Virginia Commonwealth University. Last year, he refused to allow his fifth-grade daughter to take the tests.

It isn’t really clear if parents and their children have the legal right to take the tests or not. If parents refuse, the child gets a “zero.” That might go against the school’s overall rating.

How it affects the student isn’t clear. Continual refusals could keep children out of special programs, such as ones for gifted students. But students from private schools, where SOLs are not usually taken, regularly transfer to public schools with little problem.

In different parts of the state, parents have formed grass roots groups to educate and support parents who have concerns that the mania for standardized testing is hurting true education.

Throughout the state, ad hoc groups are forming where parents can meet and plan refusals. In Richmond, RVA Opt Out meets every third Monday evening of the month and has tripled its attendance in the past several years.

Confronting standardized testing is in part a reaction of politicians who insist that standardized testing is a primary – if not the only – way to make sure that students are being educated properly. Such tests have been around for years but got a strong boost in former President George W. Bush’s “No Child Left Behind” program of 2002.

Standardized testing has also been used as a weapon against teachers’ unions. Some politicians have suggested that data from SOLs and other tests be collated and configured to give individual teachers ratings that could be made public – something teachers associations bitterly oppose.

What’s more, SOL and other similar data have been used for purposes that have little to do with education. Realtors often collect schools’ performance data to push home sales in certain neighborhoods to give for sale prospects snob appeal.

Critics say that multiple-choice testing doesn’t always reflect a student’s ability to think or show what he or she really understands. It also doesn’t reflect creativity to draw, paint or perform or write music.

The anti-testing movement is growing nationally. In one case in New York state, about 1.1 million children in grades three through eight typically take reading and math tests. Last year, about 67,000 children skipped the tests.

The push-back is growing.

Chill Out, Wintergreen!

Wintergreen Resort -- residents in fear of gas pipeline

Wintergreen residents fearful of gas pipeline

by Stephen Haner

To My Fellow Landowners in Wintergreen:

Chill out, will you?

My inbox is filling these days with Wintergreen-related propaganda opposing a natural gas pipeline that is proposed to pass through Nelson County.

Here’s a recent example, emphasis added:

“The great majority of Wintergreen owners will permanently see it as they enter Wintergreen and from all of the major vantage points here – Black Rock Circle, Devils Knob Loop all the way to Blue Ridge Overlook and down Cedar Drive, the Plunge, the Wintergreen/Founders Vision Overlook and for several miles as it winds its way down to Rockfish Valley.  Property values on the Mountain and in Stoney Creek will be adversely affected.”

Oh, please.  Once the pipeline is built and then re-buried – beside but not through Wintergreen — people from a few vantages might see a wide swath of grass, a straight long meadow, snaking down the mountainside.  Just like now they see a winding road.

Here’s a little tidbit you all know but the rest of Virginia might not.  Property values in Wintergreen are already depressed, still far below the peak in 2007 or so.  That particular micro real estate market was in recession long before there was any discussion of a pipeline.

Why? Energy prices and the general malaise in the U.S. economy are to blame.  A second home and resort membership out in the mountains is a luxury item, requiring a very nice income and a willingness to fill up the family buggy with lots and lots of fuel, especially if your second house is on top of a mountain.  If you care about your property values, you want fuel prices to continue at these current low levels and you want Virginia’s economy to start booming again.  You want Virginia back on top of the “Best for Business” rankings.

And that’s what the pipeline, as one element of the cheap-natural-gas fueled rebirth of our economy, is all about. Wintergreen is the perfect example of how the wealth of the Richmond, Hampton Roads and Washington areas finds its way to the Blue Ridge.

As the pipeline routes are debated, as the “No Pipeline” signs sprout in the county, I understand the anger of those landowners who have a family farm or business that is directly impacted.  But the wealthy of Wintergreen whining about their view have me scratching my head, because some of you have to understand enough economics to see the benefits of this pipeline and enough engineering to know it will be safe and barely visible.

Me, I’m hoping sometime in the distant future somebody else has the inclination and income to buy our house, and that wealth is not going to be created without energy.  The BANANA (build absolutely nothing anywhere near anything) philosophy coming to dominate this country is the real threat to property values.

Portsmouth Takes a Hit from Tunnel Construction

tunnel_traffic

Vehicle traffic through Downtown and Midtown tunnels. Image credit: James V. Koch. Click for larger image.

by James A. Bacon

The City of Portsmouth has been clobbered by the imposition of tolls on the Midtown Tunnel and Downtown Tunnel connecting the city to Norfolk, and hammered again by construction-related disruptions to service on the tunnels. Combined, the impact of tolls and disruption have reduced quarterly taxable sales by $24 million annually, materially harming businesses and crimping tax revenue, finds James V. Koch, president emeritus of the economics department at Old Dominion University in a new study.

In the report, “The Impact of Tolls on the City of Portsmouth: The Evidence 15 Months Later,” Koch is especially critical of the Virginia Department of Transportation (VDOT) and its private-sector partner, the Elizabeth River Company (ERC), for providing motorists inadequate warning of the interruptions to traffic disruptions, thus creating widespread uncertainty among discretionary drivers “east of the river” who might otherwise travel to stores, recreation, churches or social gatherings in the city. “In many drivers’ minds, tunnel closures have become sufficiently unpredictable that they are not going to take chances,” he writes.

Koch does not criticize the decision of VDOT under the McDonnell administration to impose tolls on the formerly toll-free tunnels in order to finance construction of new tunnel lanes and related land-side transportation improvements to alleviate some of the worst traffic congestion in Hampton Roads. Benefits will be felt throughout the region. But he does note that Portsmouth is suffering disproportionately.

Says Koch: “My rough estimate is that Portsmouth is impacted 31 percent more than Suffolk by the tolls and closures, 459 percent more than Norfolk, and 616 percent more than Virginia Beach.”

Bacon’s bottom line:  It’s no surprise that imposing tolls where there were none imposes economic pain. What I find most interesting is Koch’s conclusion that the impact of construction-related disruptions was almost as severe — $10 million of the $24 million — but could be partially mitigated if ERC and VDOT did a better job of alerting drivers, either through advertising or signage, of those disruptions. That is a management issue, not an inevitable consequence of the construction project.

Koch thinks the hit to taxable sales could get worse this year and next. However, the region should start feeling the benefits when the project is complete. As Koch writes:

When all of the construction is completed (and setting tolls aside), the cost of driving in and out of Portsmouth will decline. Vehicles will be able to travel at higher speeds, fewer traffic jams will confer time savings, travel will become much more predictable, vehicle wear and tear will decline, and there will be diminished pollution.  To the extent these reductions in costs exceed the size of the tolls being paid, they will make Portsmouth a more attractive place to live and/or to locate a business.

From a macro-economic perspective, Portsmouth may wind up better off in the long run. But that won’t be much consolation to the businesses that Koch thinks very well could go out of business in the meantime. VDOT and ERC need to act quickly to mitigate what harm they can.

Finally, Tobacco Commission Gets Reforms

Feinman

Feinman

By Peter Galuszka

Virginia’s infamous tobacco commission appears to be finally getting needed reforms 15 years after it went into existence.

Gov. Terry McAuliffe announced today that he was appointing a new executive director, Lynchburg native Evan Feinman, ordering a slimmed down board of directors and requiring a dollar-for-dollar match on grants the commission doles out to support community development in Virginia’s old tobacco belt.

In another break with the past, McAuliffe is renaming the old Virginia Tobacco Indemnification and Community Revitalization Commission as the Virginia Tobacco Region Revitalization Commission.

That might sound cosmetic, but any change is welcome given the commission’s history.

Since its formation after the 1998 Master Settlement Agreement between 46 states and four large cigarette makers, the commission has been spending millions of dollars won from the tobacco firms supposedly to help tobacco growers in a region roughly following the North Carolina border wean themselves off of the golden leaf toward economic projects that are far healthier.

Instead, the commission has been racked by scandal after scandal, including the conviction of a former director, John W. Forbes II, for embezzling $4 million in public money. He is now serving a 10-year jail sentence.

The commission also figured in the corruption trial of former Gov. Robert F. McDonnell since it was suggested my McDonnell as a possible source of funding for businessman Jonnie R. Williams Sr. during McDonnell’s trial for corruption. Williams, who was the star prosecution witness against McDonnell, got help from McDonnell in promoting one of his vitamin supplement products. McDonnell was convicted of 11 felonies and is now appealing.

The old commission also has been criticized by a major state audit for funding dubious projects and not keeping track of whether the money it has doled out has done much good. It had been criticized for acting as a slush fund for projects favored by Southside and southwestern Virginia politicians.

McAuliffe’s reforms include reducing the commission’s board from 31 to 28 members and requiring that 13 of them have experience in business, finance or education.

Feinman has been deputy secretary of natural resources and worked with McAuliffe’s post-election team.

It’s too soon, of course, to know if these changes will bring results, but anything that moves the commission away from its past and the grasp of mossback Tobacco Road politicians is welcome.

Blankenship’s Incriminating Tapes

don-blankenship By Peter Galuszka

It may sound like something out of the Nixon White House, but embattled coal baron Donald L. Blankenship regularly taped conversations in his office, giving federal prosecutors powerful new ammunition as he approaches criminal trial in July.

According to Bloomberg News, the former head of Massey Energy taped up to 1,900 conversations that often go to the heart of the case against him. Blankenship was indicted last Nov. 13 on several felony charges that he violated safety standards and securities laws in the run up to the April 5, 2010 blast at the Upper Big Branch mine in West Virginia that killed 29 miners.

The revelation of the tapes came about in a circuitous way. The tapes were given to federal prosecutors in 2011 by officials of Alpha Natural Resources, which bought Richmond-based Massey Energy in 2011 for $7.1 billion.

After reaching a non-prosecution deal with federal prosecutors, Alpha hired a powerful New York law firm to investigate Massey for any possible violations.

Alpha, based in Bristol, was required as part of a non-prosecution order it signed to surrender all evidence, including the tapes.

Earlier this year, Alpha declined to continue paying Blankenship’s legal bills since he was under criminal indictment. Blankenship, claiming Alpha was required to indemnify, him, sued Alpha in a Delaware court. The existence of the tapes was revealed in that venue.

According to court documents filed in Delaware, Blankenship seemed to know that his disregard and hardball management practices could hurt him.

The tapes show Blankenship’s disdain for the U.S. Mine Safety and Health Administration (MSHA), which regulates mines but also reveal Blankenship knew Massey’s practices were risky.

According to testimony, a tape has Blankenship stating, “Sometimes, I’m torn up with what I see about the craziness we do. Maybe if it weren’t for MSHA, we’d blow ourselves up. I don’t know.”

“I know MSHA is bad, but I tell you what, we do some dumb things. I don’t know what we’d do if we didn’t have them,” Blankenship said on tape in the Delaware case.

So far, little has been revealed about what evidence the U.S. Attorney’s Office in Charleston, W.Va. has against Blankenship. Irene Berger, a U.S. District Judge in Beckley, W.Va., issued a massive gag order forbidding lawyers and even family members of the 29 mine victims from discussing the case, now scheduled for July 13 in Beckely.

The gag rules were order modified after the Charleston Gazette and the Wall Street Journal among other news outlets challenged them before the U.S. Fourth Circuit Court of Appeals in Richmond.

In some cases, apparently, the tapes cut both ways. In Delaware, Blankenship’s lawyers played a tape from 2009 which has Blankenship urging executives to tighten up on safety. “I don’t want to go to 100 funerals,” he is quoted as saying. He allegedly told Baxter Phillips Jr., then Massey’s president, that if there were a fatal disaster, “You may be the one who goes to jail.”

According to Bloomberg, Alpha initiated the internal probe after reaching a non-prosecution deal with federal prosecutors. It hired Cleary Gottleib Steen & Hamilton of New York to handle it.

Since Alpha refused to continue paying Blankenship’s legal bills, Blankenship reportedly has paid his lawyers $1 million himself.

The writer is the author of “Thunder on the Mountain, Death at Massey and the Dirty Secrets Behind Big Coal,” 2012, St. Martin’s Press. Paperback , West Virginia University Press, 2014.

Private Immigrant Jail May Face Woes

Farmville jail protest

Farmville jail protest

By Peter Galuszka

Privatization in Virginia has been a buzzword for years among both parties. In this tax-averse state, contracting off public functions is seen as a wise and worthy approach.

But then you get debacles such as the U.S. 460 highway project. And now, you might have one brewing down in Farmville.

The small college town is in Prince Edward County, which gained international notoriety from 1959 to 1964 when it decided to shut down its entire school system rather than integrate. Many white kids ended up in all-white private schools and many African-American children were cheated out of an education entirely.

About six years ago, another creepy project started there – a private, for-profit prison designed exclusively to imprison undocumented aliens. It’s a cozy little deal, as I outline in a piece in Sunday’s Washington Post.

Farmville gets a $1 per head, per day (sounds like slavery) from the U.S. Immigration and Customs Enforcement agency. Immigration Centers of America, the private firm run by Richmond executives Ken Newsome and Russell Harper, gets profits. Then, in turn, also pay taxes to Farmville and the county.

The ICA facility, whose logo includes an American flag, pays taxes as well and provides about 250 jobs locally. The project even got a $400,000 grant from the scandal-ridden Virginia Tobacco Indemnification and Community Revitalization Commission for water and sewer works.

What might sound like a no-lose operation, except for the mostly Hispanic inmates who might have entered the country illegally, overstayed their visas, or had other bureaucratic problems, may face problems.

The census now at the jail is about 75 percent of what it could be. President Obama has issued an executive order that could free some five million undocumented aliens. It is being challenged by 26 states but Virginia Atty. Gen Mark Herring has filed an amicus brief in favor of Obama.

So what happens to Farmville if Obama wins? It could affect 96,000 aliens in Virginia. Could there someday be no prisoners? Wouldn’t that be too bad for Farmville?

Recent history is instructive. Back in the 1990s, Gov. George Allen, a conservative darling, was pushing private prisons in Virginia as he successfully got rid of parole in part of his crime crackdown. Slave labor was part of the deal.

Executive Intelligence Weekly wrote in 1994:

“Slave labor in American prisons is increasingly being carried out in what are called “private prisons.” In his campaign to “reform” Virginia’s penal laws, Gov. George Allen pointed to prison privatization as the wave of the future, a moneymaking enterprise for the investor, and a source of good, cheap labor for Virginia’s municipalities. Indeed, after taxes, pay-back to the prison, and victim restitution are removed, the inmate earns an average of $1 per hour in these facilities.”

Well guess what happened. Allen pushed for more public and private prisons. They were overbuilt. Demographics changed. Crime rates dropped. Prisons had to be shut down.

So, if immigration reform ever comes about what happens in Farmville? Don’t forget, the private jail came at a time when a construction boom, especially in Northern Virginia had drawn in many immigrants especially from Latin America. Their papers may not have been in order.

Neo-racists like Corey Stewart, chairman of the board of supervisors of Prince William County, ordered a crackdown on brown-skinned people who spoke Spanish. But when the real estate market crashed, fewer Latinos arrived. And, if they did, they avoided Stewart’s home county.

Wither Farmville?

Big Data: the New Wave of Wealth Creation

apt

by James A. Bacon

We’ve all been hearing more and more about “Big Data,” which arises from the ability of computers to collect and process unimaginably huge gobs of data and sophisticated mathematical equations to detect patterns and anomalies that can be used to drive business decision-making. Capital One used Big Data before it had a name to revolutionize the credit card business, and it’s one of the biggest, most profitable companies in Virginia. Now comes Arlington-based Applied Predictive Technologies, which just sold out to MasterCard for $600 million.

That’s a remarkable valuation for a 16-year-old company of 300 employees and revenues approaching $100 million. Humongous pay-offs like that are routine for Silicon Valley but they’re rare in Virginia.

“We will stay Ballston-based, but we will be growing faster,” APT chief executive Anthony Bruce told the Washington Post in an email. “Our opportunity to grow and expand will be accelerated by this partnership, in Arlington and elsewhere.”

Here’s how the company describes its product: “APT’s Test & Learn software is revolutionizing the way leading companies harness their Big Data to accurately measure the profit impact of pricing, marketing, merchandising, operations, and capital initiatives, tailoring investments in these areas to maximize ROI.”

An illustration can be seen in the graphic above. Drawing from data on retail and restaurant sales at more than 100,000 locations nationwide, APT charted the impact of the 2015 NCAA Final Four basketball tournament on restaurant sales in Indianapolis. The APT Index also integrates weather and demographic data to allow retail executives to ask an even broader range of questions. It doesn’t take much imagination to see how MasterCard could use its relationship with retailers globally to sell this as a value-added product.

Read “Data Crush” by Chris Surdak to get a feel for how Big Data will transform industry after industry in ways we mortals can barely comprehend. Big Data will blaze a path of creative destruction easily equal to that of the Internet.

Bacon’s bottom line: Momma, don’t let your babies grow up to be lawyers. Engineers and computer programmers will make a decent living in the economy of the early-mid 21st century, but if you want your kid to have a shot at becoming the next Steve Jobs or Bill Gates, tell them to major in any branch of mathematics that lends itself to Big Data analytics.

If you want an argument in favor of STEM education (the “m” stands for mathematics), this is it. The Big Data revolution may have started in the United States, but the industry will move to wherever there are pools of mathematically gifted employees. We neglect mathematical instruction at our peril. (So says the guy who couldn’t tell you the difference between sines, cosines and tangents, much less between integral and differential calculus, much less actually compute anything requiring a retention of anything beyond 8th-grade algebra. I’m a dinosaur but at least I know it.)

Grid Pro Quo

Exhaust fumes blown into a sky.The EPA wants to restructure Virginia’s electric grid. Skeptics argue that slashing CO2 emissions will drive electric bills higher. Environmentalists disagree. Who’s right?

by James A. Bacon

President Barack Obama’s Clean Power Plan gives Virginia fifteen years to cut CO2 emissions by 38% from 2012 levels. Not only will the plan usher in a better world of cleaner air, bountiful “green” jobs and diminished global warming, supporters contend, Virginians will use less electricity and enjoy an 8% reduction in electric bills by 2030.

The State Corporation Commission (SCC) has nothing to say about global warming or green jobs, but the staff has commented upon the Clean Power Plan’s impact on electric bills:  Rates under the plan could be 20% to 22% higher for a typical Dominion Virginia Power customer than under a business-as-usual approach. That’s on top of the 14% that electric rates have increased since 2007, including rate adjustments for lower fuel prices that took effect this month, and it doesn’t include the impact on Appalachian Power or smaller utilities.

Who’s right? Will electric bills go up or down?

What we have here is a battle of dueling experts – Obama’s Environmental Protection Agency (EPA) and its allies in the environmentalist community on the one side, and the state regulatory commission and the electric power industry on the other. Whom do we believe?

It’s hard for citizens to know. The issues are anaesthetizingly complex, and few people have the patience to wade through both sides of the issues. For each assertion that one party makes, someone provides a counter. Peel away one layer of the debate, and there always seems to be another.

That’s why God created Bacon’s Rebellion. My goal in this article is to clearly delineate the main points of contention. You may not change your mind – who ever does? — but at least you will leave with a clearer idea of what the issues are.
Because this piece is so long, I have broken it into digestible chunks. Use these links to navigate the article.

The Clean Power Plan and how it works
McAuliffe administration asks EPA to modify Virginia targets
The SCC response
SELC sides with EPA
Nukes vs. Renewables
Wholesale electricity to the rescue
Energy efficiency to the rescue
How reliable is renewable power?

The Clean Power Plan and how it works

The purpose of the Clean Power Plan is straightforward: It is designed to radically curtail the CO2 emissions blamed for global warming by setting CO2 targets for each state. Nationally, the plan aims to cut CO2 emissions by 30%, but state targets vary widely. Under proposed regulations, Virginia would have to slash 2012-level emissions by 38% by 2030, with a majority of the cuts occurring by 2025.

While the EPA sets targets for each state, it theoretically allows states flexibility as to how they achieve those targets. The agency provides four broad strategies, which, it contends, should achieve the goals at a reasonable cost. States can mix and match as best fits their circumstances. The strategies include:

  • Make coal-fired power plants more efficient. By capturing more heat from coal combustion, coal-fired plants can generate the same amount of energy with fewer CO2 emissions. EPA says that an average “heat rate improvement” of 6% should be achievable.
  • Use more natural gas. Although it is a fossil fuel, natural gas releases less CO2 per unit of energy generated than coal. The EPA expects the biggest reductions to come from switching to this fuel.
  • Use more renewables and nuclear. Solar power, wind power and nuclear power release zero CO2. In the EPA’s estimation, this strategy is second only to natural gas in its potential to cut CO2 emissions.
  • Conserve energy. Investing in energy efficiency reduces the demand for electricity, which means less generating capacity is needed. The EPA says it should be possible to increase demand-side energy efficiency by 1.5% annually.

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