Coal is one of the dirtiest sources of energy. In 2021, coal accounted for 59% of the carbon emissions in the electric power industry. As the effects of climate change become more apparent amid extreme heat waves and freezes, the United States has resolved to reduce its reliance on fossil fuels and cut its carbon emissions.
Unsurprisingly, coal was the first energy source to receive the ax, with the U.S. reducing the number of operational coal-fired power plants from 589 to 500 over the past decade.
In late July, notorious holdout Senator Joe Manchin announced that he would support the Inflation Reduction Act. The bill contains climate change provisions that would put the U.S. on track to cut pollution by a whopping 40% by 2030 and take it a step closer to cutting its carbon emissions by 50% by 2050.
However, the coal industry is far from happy about the new climate deal.
In a scathing statement from the West Virginia Coal Association and other state-level coal industry groups, the coal industry indicated that the legislation severely threatens America’s coal industry and puts nearly 400,000 jobs in jeopardy. The groups called the Inflation Reduction Act “egregious,” stating that the industry was shocked and disheartened by Manchin’s decision to support the bill.
West Virginia Coal Association’s president Chris Hamilton plus the leaders of the Illinois, Kentucky, Ohio, Wyoming, Texas, Indiana and Pennsylvania mining associations signed this statement. They accused Manchin of going back and forth on the energy and climate change debate, arguing that the West Virginia senator’s actions made them question the motivation and sincerity behind his past opposition to climate change measures.
According to the coal industry groups, the Inflation Reduction Act will not do anything for coal generation and won’t lower household energy costs or reduce inflation.
The bill will invest a whopping $369 billion in climate change and green energy initiatives, providing tax breaks to boost EV adoption and incentives to develop carbon-capture facilities, increase green-hydrogen production, and ramp up the development of wind turbines, solar panels, and next-gen batteries for stationary power storage.
But the coal industry groups warn that ramping up investment in renewable energy will devalue America’s coal electric generation assets and cause the sector to decline rapidly.
Speaking to reporters last week, Manchin said that he didn’t believe the predictions that the bill would force coal-fired plants in his state to shut down, arguing that the country would still need coal to generate enough electricity for its minimum domestic power needs.
Before the Inflation Reduction Act is signed and takes effect, coal extraction companies such as Peabody Energy Corporation (NYSE: BTU) will continue to enjoy the demand for their product that prices brought about by the energy crunch that is facing the world.
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