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Consumers to pay price for environmentalism

by The Oklahoman Editorial Board Published: April 30, 2014

A headline at The Onion, a parody news website, once stated that a new report found “98 Percent Of U.S. Commuters Favor Public Transportation For Others.” The satire made a good point. Many Americans support “environmentally friendly” policies so long as they don’t personally have to deal with the consequences.

This may be the case with alternative energy. In the abstract, the public generally supports wind and solar power. But that support may quickly disappear once consumers feel the resulting hit to their bank accounts.

The Los Angeles Times recently reported, “There is a growing fragility in the U.S. electricity system, experts warn, the result of the shutdown of coal-fired plants, reductions in nuclear power, a shift to more expensive renewable energy and natural gas pipeline constraints. The result is likely to be future price shocks. And they may not be temporary.”

Notably, many of those factors are the result of environmental policies at the federal or state level, or both. The Times notes the price of electricity has already increased by double digits over the last decade in many states, even after accounting for inflation. Greater price increases may lie on the horizon.

Environmental Protection Agency regulations are forcing the closure of many coal-fired power plants, which provide relatively low-cost electricity. Nationally, two dozen coal-generating units are scheduled for decommissioning, shifting power production to more expensive sources. And, as the electric supply declines and demand remains constant or grows, prices will further increase.

Environmental regulations have led more power plants to convert to natural gas. That’s good for Oklahoma energy producers, but it increases price volatility for ratepayers. Natural gas now costs about $4.50 per million BTUs, which is already more expensive than coal. Growing demand for natural gas is expected to drive up prices further. Some experts believe $10 may become the norm.

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by The Oklahoman Editorial Board
The Oklahoman Editorial Board consists of Gary Pierson, President and CEO of The Oklahoma Publishing Company; Christopher P. Reen, president and publisher of The Oklahoman; Kelly Dyer Fry, editor and vice president of news; Christy Gaylord...
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