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It is Time to Engage, Again, on the Social Benefits of Carbon






By Fred Palmer, Senior Fellow - CO2 Policy, Center for the Study of Carbon Dioxide and Global Change and Leader Saving US Coal


Fred Palmer

February 2, 2020 - Last Friday, a Time Magazine article captured the latest challenge to Coal, and now oil and natural gas, too. The headline from Time Magazine’s story on the flurry of climate change executive orders by President Biden last week puts it this way:

“Biden’s Biggest Climate Move: Signaling That Fossil Fuels are not the Future”

The title is an accurate view of the intended message of the President’s executive orders on climate and fossil fuels from the January 29, 2021 Time Magazine story covering last week’s “Climate Day”. The article details the many directives from President Biden to nine US agencies on the importance of the climate issue and substantive directions on how to go about the business of reducing CO2 emissions through Government fiat.  

The clear directive from the President is that all agency actions dealing with fossil energy issues should be made through the prism of CO2 emissions in an effort to minimize such emissions. The clear implication to the executive branch leaders from their Leader is that CO2 should be treated as if a toxic pollutant and all decisions made accordingly, as opposed to CO2 being the essential element of human life on earth, that it is.

There are many aspects of the directives and to truly understand the importance of the orders by the President they need to be read in their entirety. In this article I want to focus on one of the most important, and that is with respect to the so called “social costs of carbon (SCC)” of CO2 emissions from fossil fuel use.

How important is this subject? Bloomberg Law has a January 21 article saying the SCC is key to the Biden climate agenda, noting the sweep of the orders and the role they will play in federal agencies and in the states that take their lead from the federal government. Per Bloomberg, the combustion of fossil fuels for whatever reason needs to be limited wherever possible given the President’s revealed antipathy to the American people living their lives depending on fossil fuels with resulting CO2 emissions.

The SCC is addressed in Section 5 of President Biden’s January 20, 2021 Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis. In the words of the Order, “It is essential that agencies capture the full cost of greenhouse gas emissions as accurately as possible including by taking Global damages into account.”

The President’s directive to the agencies is for a task force within 30 days developing a negative cost of carbon to apply in decision making on the future use of fossil fuels. Expect a number in excess of $52 per ton, the last value established in the Obama/Biden Administration. At that rate all fossil fuels become uncompetitive with US Government subsidies for everything else, and the rate will just be a starter.

It was in the 1990s that the environmental community introduced the SCC, calling it then “Environmental Externalities”. The strategy employed was aimed at coal use for electricity generation and the fora was state regulatory agencies where coal power was established at the direction of the United States.

The coal plants at issue are located throughout the Midwest and Plain States, put in service in the late 70s and early 80s at the urging of President Jimmy Carter and the first Secretary of Energy, Jim Schlesinger. They were installed by investor owned utilities, rural electric co-ops and municipal electric utilities in patriotic response to Project Energy Independence following the Middle East oil embargoes. Incredibly in the late 1970s, we were importing oil to meet 17% of national energy demand and US electricity consumption was rapidly growing, meaning our literal health and wealth was in the hands of the oligarchs running middle east oil states.

At the time I was CEO of Western Fuels Association (WFA), the coal co-operative established in the late 1970s by co-ops and municipals to create demand at scale for their coal supply needs, primarily to deal with the oil companies that installed, owned and operated the coal mines in Wyoming’s Powder River Basin.  It was clear to the WFA Board representing the not for profit utilities that owned it that the 1990s new effort by the environmental community was aimed at coal plant closures through assigning phantom costs added to best in class coal plant dispatch rates otherwise achieved.   

As both CEO and a lawyer, I was given by the Board the task of engaging against the regulatory efforts by the environmentalists to assign computer model generated costs to the coal plants. The environmental theory deployed then was an early version of the SCC, virtually the same as today’s SCC, using similar flawed, flux adjusted computer models as the case in chief. The environmental term then for today’s SCC was “negative environmental externalities”.

In the early days, WFA was the only entity in the country to engage and we did with vigor deploying expert testimony on “positive environmental externalities” from coal use and resulting CO2 emissions. By doing so and remembering that WFA was 100% owned by not for profit electric utilities protecting their consumers, we earned the denigrating insult from Vice President Gore that we were all “greedy polluters”. Charming, no?

We were successful in states such as Colorado, Kansas, Iowa and Minnesota. In Minnesota, there was a $0.50/ton initially assigned which we nonetheless regarded as a victory. And it was in Minnesota where we established that “cost” as an accounting term can be positive as well as negative.  As a result, we, and over objections from environmentalists, were allowed to put on testimony establishing the clear positive benefits of CO2 emissions and electricity from coal plants as presented by the Dream Team of Sherwood Idso, Pat Michaels, Bob Balling and Mark Mills.

We did have valuable help in Minnesota from the State of North Dakota protecting coal-generated electricity exports to Minnesota. It was former Senator Heidi Heitkamp, then serving as ND Attorney General, that represented the State. Heidi, as AG, fully embraced our case in chief and relied on it.  

Our success with ND in Minnesota and elsewhere is a template for today. Then it was the flawed, flux adjusted computer models that drove the Al Gore CO2 Vision of the Apocalypse. As I compose this, it is the modestly improved but still flawed and flux adjusted computer models today that drive the Al Gore Vision of the Apocalypse as embraced by President Biden in his executive orders on CO2 emissions and climate change.

And like the Obama Administration’s EPA Clean Power Plan that no longer in effect, the driver for President Biden remains a computer modeled vision wrapped up and delivered by the United Nations. The reality is the UN approach is openly advanced as a theory for governance under the rubric that CO2 is really an air toxic, as opposed to CO2 as a benign gas required for human life on earth. As of last week, that is now the US approach as well.
On the CO2 expert front today, it is my partner Craig Idso in “Saving US Coal” that takes his Dad, Sherwood’s place. It was both Sherwood and Craig that helped Western Fuels produce the 1990s Greening of Planet Earth and the Greening of Planet Earth Continues videos. Those videos have been confirmed by observations, unlike the computer models that will never be confirmed as they remain flawed and flux adjusted.

Pat Michaels, Bob Balling and Mark Mills are still at it and what we put on then can be put on now. Of course, the needed effort requires financial support through the Institute for the Human Environment, which I will explain more in my next article. The financial support needed to be successful in reaching each agency and educating through expert presentations and testimony is substantial. It is equally true that such costs are only a pittance of the potential costs to all of us if the United States becomes a society dependent on the permission of Washington and State Government on what energy we can use, when we can use it, the purpose of our use and the amount we pay for it.

If you think fossil fuels are an essential part of the continuing success of the human community, failure is not an option. Failure means a gradual imposition of the Green New Deal. Success continues us on the path we are on: Coal, oil and natural gas our dominant source of energy supply; technology development with government support leading to continued emission improvements and efficiencies as our society and economy goes forward in the 21st Century.

With 21st Century Coal leading to a Coal Renaissance allowing still more people live longer and live better.