Coal Plant Moratorium Another Economic Blow

(Editor's note: This Op-Ed originally appeared Feb. 17, 2009, in the Detroit Free Press.)

By means of an "executive directive" Gov. Jennifer Granholm made good on her State of the State promise to restrict new coal-fired power plants. The negative effects on Michigan's energy future were not long in coming — the very next day The Bay City Times reported that five pending power plant projects have been put on hold, including a $2 billion one in Bay County. Before more damage is done, the governor should rescind this directive, or the Legislature should prohibit such a moratorium.

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The governor's directive instructs the Department of Environmental Quality to halt the issuance of any environmental permits for new coal plants unless it determines that "a reasonable electricity generation need exists" and that there is no "feasible and prudent alternative." That is the same language used by the DEQ in adjudicating wetland permits — a program the governor said she now wants to return to the federal government.

Putting such discretionary power in the hands of any unelected bureaucracy is dangerous. This may be particularly true for the DEQ, which in recent years has contributed greatly to Michigan's economic slide by giving the state a well earned-reputation as a regulatory quagmire. I was director of the DEQ for nearly eight years, and can testify that the agency is ill-equipped to consider factors other than environmental ones. Requiring the DEQ to make critical decisions about Michigan's future energy mix is a recipe for stagnation or worse.

Those decisions should be left to the private sector, with environmental regulators limited to enforcing clean air and water standards on whatever type of plant is built. If there is any greater role for the state, it should be performed by the Public Service Commission, which does not have the narrow environmental agenda of the DEQ.

Beyond that, politicians should start being honest with the public about energy realities. According to the PSC, coal generated 68.9 percent of the electricity consumed in the state in 2007, followed by nuclear at 23.3 percent. Renewable fuels provided l.0 percent of our energy needs — with wind comprising just 0.05 percent.

The notion that alternative sources can provide more than a fraction of the energy required by a modern industrial economy is nonsense. Honest environmentalists admit that their real agenda is to radically scale back the size of our economy, lowering our standard of living.

Politicians enacting policies that bring this about either support that agenda, are ignorant of the realities, or are taking political benefits today while calculating they will be long gone before the bitter consequences hit home. That applies to the virtual moratorium on new coal plants and legislation passed last year mandating that 10 percent of Michigan's electricity come from renewable energy by 2015.

Meeting that mandate — especially while also making up for the loss of planned coal plants — is impossible without a major scaling back of our economy. Wind energy, for example, is unreliable and must be backed up with other sources, usually natural gas-fired power plants. These plants are expensive to operate, and energy from them will consume a larger share of the discretionary income of Michigan families and businesses, not to mention costing the state more jobs. And you don't have to be an expert to know that Michigan's solar energy potential is limited.

Last year Gov. Granholm boasted that Sweden had created hundreds of thousands of renewable energy jobs (although she hasn't been able to support these claims). It's ironic that Sweden just announced that it is lifting a moratorium on building new nuclear power plants, rather than gradually closing down existing ones as previously planned.

Sweden learned that it can't meet its people's power needs through wind and other renewable energy sources. We can only hope that policymakers here stop pretending that Michigan can do so, because without coal the last person leaving Michigan won't have lights to turn off.


Russ Harding is director of the Property Rights Network at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.

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