Market News

 October 15, 2014
Obama's war on coal

 Trying to destroy an industry is hard work --- just ask President Barack Obama. For nearly six years, he has struggled to eliminate coal from America's energy mix. Regulations proposed by the Environmental Protection Agency for existing plants are so stringent that a dozen states filed a lawsuit to overturn them. Rules for new plants are even tougher. There is no available technology that will allow a new plant to operate today within the law.

Fought through executive orders, new regulations and end runs around Congress, Mr. Obama's war has taken its toll politically. Across America's coal country, the industrial base is suffering as economics and geography combine to put control of Congress at stake: Three of the top coal-producing states have Senate races on November's ballot. In Montana, Kentucky and West Virginia, Democratic candidates are running away from Mr. Obama's policies as fast as they can.

West Virginia neatly captures the tough election map for Democrats. It's the only Southern state that voted for Michael Dukakis in 1988 and hasn't elected a Republican senator in 55 years. Even so, Rep. Shelley Capito appears poised for a comfortable victory in the Senate contest next month.

There's more at stake than a Senate seat. The state's coal exports fell 40 percent in 2013, and people know it. Republicans have a solid hold on one congressional seat and maintain an advantage in Ms. Capito's district, which includes Charleston, the state capital. In the coal belt, 20-year Democratic incumbent Nick Rahall is running neck-and-neck in a bruising battle over ... yes, coal.

Mr. Rahall may be critical of Mr. Obama's energy policies, but many voters see that opposition as too little, too late. The end result: a congressional delegation turning deep red after decades of domination by Democrats. The state's House of Delegates might even turn Republican for the first time since FDR's New Deal.

Kentucky has followed a similar path. Now seeking his sixth term, Republican Senate leader Mitch McConnell looked vulnerable from all sides 18 months ago. Democrats recruited a top-tier candidate, and Mr. McConnell faced a primary challenge from the right.

But Democrat Allison Grimes has repeatedly been on the defensive over energy policy and the EPA rules, while Mr. McConnell displays his mastery of the rhetorical counter-punch. When Bill Clinton came to town to capitalize on the "Bubba factor," Mr. McConnell was quick to note that the EPA building in Washington was named for the former president.

A recently released video further undermined Ms. Grimes. It captures her campaign staff reassuring supposed environmentalists who want to "wipe out that coal industry" that the candidate was sounding pro-coal only "because she wants to get elected."

As Mr. Obama recently asserted, his energy policies "are on the ballot." And so they are. In Louisiana, Arkansas, Alaska and Colorado, broader questions of energy policy have figured prominently in Senate races where Democrats now trail. Concerns about carbon taxes, obstacles to natural gas fracking, Mr. Obama's Keystone pipeline delays and his reluctance to issue offshore drilling leases have worked against incumbents across the board.

There's nothing wrong with fighting for what you believe in, but war without casualties is fantasy. Mr. Obama thinks the costs of wiping coal from our energy map --- in lost jobs, fewer exports and higher electricity costs --- are worth it. He's wrong. We'll all be paying the economic price for decades; his party will pay the political price much sooner.