Cap and Trade Legislation Would Kill Coal Industry, Congressman Says

Ryan Byrnes | April 1, 2009 | 6:06pm EDT
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Rep. John Shimkus (R-Ill.)

(CNSNews.com) - Rep. John Shimkus (R-Ill.) said cap and trade systems would be devastating to coal manufacturing states like Illinois and West Virginia and proposed cap and trade legislation could kill the entire coal mining industry.   
 
“This cap-and-trade scheme may not just reduce Illinois coal jobs further – it is my worry that this legislation aims to kill the entire coal industry,” Shimkus told CNSNews.com.
 
Shimkus and Rep. Shelly Moore Capito (R-W.Va.) held a press conference Wednesday to rally support opposing the cap and trade proposals, which they said would lead to both higher energy costs and severe job loss in the coal mining industry.
 
Given the already hostile national economic climate, Shimkus said such a change would be especially overwhelming.
 
“I think it’s a very scary time to say you want to raise costs on the individual consumer and to raise taxes,” Shimkus told CNSNews.com. “This is a monumental change.”
 
Coal mining, which provides more than half of the nation’s electricity, generates more than 550,000 jobs nationwide, contributing $8.2 billion in payroll, according to a study by the National Mining Association. Total economic output from coal approached $80 billion in 2007.
 
In West Virginia – where coal produces 98 percent of the state’s energy – coal generates more than $3.5 billion each year, nearly 13 percent of the gross state product. The average coal miner earns more than $62,000 annually, which is more than twice the statewide average for all workers, Capito said.
 
For every one coal mining job, Capito said five other jobs are created. But studies have suggested that cap and trade systems could eliminate 10,000 jobs during the next decade.
 
A cap and trade system would allow the government to auction off permits to emit greenhouse gases, including carbon dioxide. An estimated $650 billion would be raised by the auctions, leading to higher energy prices for consumers.
 
Environmentalists have pushed the measure as a means of reducing carbon emissions into the atmosphere, but it has also been met with hostility from many taxpayers because of the higher energy prices that would result.
 
Both lawmakers pointed to the effects past environmental legislation has had on the coal mining industry in their respective states. Illinois coal sales dropped 52 percent from 1990 to 2007 as utilities switched from Illinois coal to comply with the 1990 Clean Air Act Amendments, Shimkus said.
 
Mining industry employment in Illinois went from 10,129 in 1990 to 3,001 in 2007. States like Ohio lost many thousands more, he said.
 
Capito cited an analysis of the Lieberman-Warner Climate Security Act, which predicted that under the act, manufacturing output would fall by as much as 12 percent, resulting in the loss of at least 3 to 4 million American jobs. West Virginia would lose up to 10,000 jobs by 2020 or 25,000 jobs by 2030, according to the National Association of Manufacturers study.
 
Additionally, Capito said cap and trade systems would cause energy prices to skyrocket, further strapping a state where the average annual resident salary is only about $31,000.
 
“By 2020, we could find ourselves in a scenario where West Virginians are spending between 24 and 27 percent of their income on energy,” she said. An MIT assessment of U.S. cap and trade proposals suggested that the total energy bill for the average West Virginia household would increase by $3,128 per year.
 
During the conference, Shimkus held what he said were 243 letters which would be sent this week to his fellow lawmakers this week. The letters encouraged Congress members with coal mines or power plants in their districts to visit the energy sites during the upcoming break and to reconsider their stance on the cap and trade proposals.
 
“We want them to meet these workers and see firsthand the impact these places have on their districts,” Capito said.
 
Speaking with reporters after the conference, Shimkus said he would not be in favor of any form of greenhouse gas emissions and also called for greater transparency by Reps. Henry Waxman (D-Calif.), Edward Markey (D-Mass.) and others pushing for cap and trade.
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