Search This Blog

Tuesday, May 05, 2009

Kansas Coal Plant and Energy Uncertainty

With former Governor Kathleen Sebelius off to serve in the Obama administration, the new governor of Kansas, Mark Parkinson, a Democrat, changed the energy game in the state.

Sebelius had blocked two 700-mega-watt coal plants from being built in Kansas. Parkinson, however, moved quickly to reach a deal with Sunflower Energy to build one new 895-mega-watt coal plant, with Sunflower pledging more investment in wind turbines, pollution controls and energy efficiency, according to a May 5 report from the Kansas City Star.

That’s a positive step forward compared to the two-year political battle Sebelius waged against expanded energy production.

However, there is no reason why the building of a coal-fired power plant must become a political card as part of a play to get legislation passed that will mandate increased use of renewables.

The most economically sound, common sense energy agenda is to remove unnecessary government costs and obstacles, eliminate subsidies or mandates favoring one kind of energy source over another, and let the market work.

Unfortunately, that too often is not the case – in the states and at the federal level.

Indeed, the threat of increased regulation regarding emissions – i.e., cap-and-trade regulation/taxation – from the nation’s capital makes energy investments uncertain. As the Star report noted: “Also, new carbon regulations from Congress could steeply increase the cost of coal plants.” That is the clearest effect of the Obama energy agenda as it is being advanced.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

No comments: