Obama and the Coal Industry

We would be remiss to not start this blog with sending our deepest sympathies to Obama's grandmother who passed away today. It is truly ashame she did not get to witness the most historic election in American History. May she rest in peace.

Today we learned that Mr. Obama stated that people could build coal plants if they want but they would be bankrupted in doing so. Interesting that the man who could potentially be our next President would want to destroy an industry and put thousands of people out of work. Does Mr. Obama really know what he is talking about on this issue? You may ask do I know what I am talking about on this issue? Well let me offer this to you, I work in the energy industry and while not an expert I do know a fair amount about the importance of coal and the truths and myths about alternative energy.

First you must understand that while alternative energy must be a priority for our country technology does lag in being able to utilize it. There is a large captial investment required in infrastructure to transport the power produced for its intial location to the many terminal locations that would use the power. Opps, did I say capital investment, hmmm, something Mr. Obama will make difficult to do with his tax and spend plans but we will leave that for another day.

The fact of the matter is that our country has more coal than Saudia Arabia has oil. The other fact of the matter is that while you may be able to produce energy, someday efficiently, from alternative sources, the wind does not always blow and the sun does not always shine. So, what do you do when that happens? Well my friends you need and will always need to have what is called a base load. This is energy produced by a reliable source that is not dependent on the wind blowing or the sun shining. Do you know what the biggest resource used to produce this base load is? Yep, you have it COAL! Black gold as it is referred to by others.

So can Mr. Obama bankrupt the coal industry by making it too expensive to build coal fired plants? You bet he can because of his Cap and Trade policy. Cap and Trade basically puts a limit on the amount of emissions you can release typcially in an area. It is similary to what the EPA has done in non-attainment areas for things such as NOX and SOX. When you limit an emission you essentially decrease the supply and thus for those of you educated in economics know as the demand increases for a limited supply the price goes up. And in this case it can become price inelastic to a very high point.

So Mr. Obama, using the excuse that the coal fired plants would release greenhouse gases and thus wants to use this Cap and Trade Policy to prevent that from happening will essentially raise your electric bill higher than you have dreamed of. All this in the name of global warming which has ZERO!, yes ZERO! scientific fact to back it up. But then again thats for another blog topic.

Was this a smart thing for Mr. Obama to do being that two major coal producing states are Ohio and Pennsylvannia. Well I guess we will see if those bitter gun and religion clingers vote him a victory or defeat in those states.

Where is this information you ask? Well just check out the San Francisco Chronicles website and you will find it. Funny how San Francisco has become flip flop central for Mr. Obama, but that again is another blog.

Happy voting tomorrow, you are engaging in a historic event for our country. Historic in the candidates and the choice of Socialism or Capitalism. Who would have thought?