Source: http://www.ibdeditorials.com/IBDArticles.aspx?id=310607652178666
By INVESTOR'S BUSINESS DAILY | Posted Monday, November 03, 2008 4:20 PM PT
Election '08: Barack Obama's plan to bankrupt anyone building a new coal plant prioritizes global warming myths over U.S. energy independence. It also wields government power punitively and will hurt the economy.
Read More: Election 2008 | Global Warming
Speaking to the San Francisco Chronicle on Jan. 17, Barack Obama singled out new coal plant construction for big taxes. The scheme, part of the cap-and-trade energy policy he wants to implement as president, is meant to tax coal producers straight out of business.
"So if somebody wants to build a coal-powered plant, they can," Obama said. "It's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted."
Isolated gaffe? No. On his own Web site, Obama declares:
"Once we make dirty energy expensive, the second step in my plan is to invest $150 billion over the next decade to ensure the development and deployment of clean, affordable energy."
In other words, Obama's plan is confiscatory taxes to first destroy America's domestic energy producers, and once that bridge is burned, force the U.S. to rely on alternative energies that haven't been developed. The big-government plan might make ideologues happy, but in the real world, it won't work. History shows that centrally planned industries fail, and when there's an energy shortage, the private sector works best when it's left alone.
We aren't just talking Cuba, where the agricultural base was destroyed after Fidel Castro decreed that it would produce only sugar, or Russia, where farms were devastated in the 1930s after collectivization.
In the 1970s, Jimmy Carter splashed out billions to develop shale oil and created a vast boondoggle with no new energy produced. In Brazil, the military-financed ethanol project also was a money-pit until the 1990s when the government ended all involvement.
Obama's $150 billion plan would be no different. But it's worse than just burning money because its punitive element destroys one of America's best competitive advantages: its treasure trove of coal and the companies that produce it.
America is the Saudi Arabia of coal, with the world's largest demonstrated reserve base of 489 billion short tons, the Energy Department says. About 93% of it is used to produce electricity, and it provides about half of U.S. electricity needs. As the nation's economy expands, that need for coal is projected to grow about 20% by 2030.
If that need can't be met, consumers will be hit with high prices brought on by shortages. Meanwhile, America's 80,000 miners and 1.6 million workers in coal-related and coal-dependent industries would suffer from Obama's taxes on new plants.
"Under my plan of a cap and trade system," Obama said in another interview, "electricity rates would necessarily skyrocket." He added that because "I'm capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to the consumers."
The biggest problem with Obama's plan is that it taxes productive companies, and offers nothing but "hope" to replace the missing energy. He does not propose using our current resources as a bridge to cleaner energy. He'd rather stop their use cold. No nuclear power, no offshore drilling, no new coal plants, and if consumers have to pay more, too bad. Obama's attack on coal use surely will leave us poorer.
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