According to the University of Pennsylvania’s Wharton school, “The Inflation Reduction Act of 2022” championed by Senator Manchin and Senator Schumer likely would not reduce inflation at all. The study, from the Penn Wharton Budget Model, estimates the proposed bill would cause inflation to ‘very slightly’ rise until 2024 then possibly decline after that. Overall, the researchers indicate that there is “low confidence that the legislation will have any impact on inflation.” But, inflation is what voters are most worried about, which is why the bill’s pretentious name is “inflation reduction.” According to a recent Census Bureau survey, four in 10 Americans say it is somewhat or very difficult to cover usual household expenses. The Wall Street Journal reports that more and more Americans are shopping at dollar and discount stores to help cope with the high prices for food and sundry items, with average spending increasing 71 percent from October 2021 to June 2022 at discount chains. Further, Americans in coal-rich states, such as West Virginia, Senator Manchin’s state, will likely be hurt the most.
West Virginia is the nation’s second-leading coal producer and the state generates 88 percent of its electricity from coal. Previously, Senator Manchin told his constituents that we must “innovate not eliminate.” But, the deal Manchin crafted with Senate Majority Leader Charles Schumer will do the opposite. It will reduce coal-producing operations and do little to innovate coal assets, as the subsidies for renewables are so generous that more coal generators will be shuttered. By increasing the lofty incentives that already extend to renewable energy, the nation’s baseload, affordable and reliable coal electric generation assets will continue to be devalued and thrust into rapid decline.
In defiance of Manchin, West Virginia is taking its own action against banks and financial firms that have stopped supporting the coal industry. West Virginia’s Treasurer Riley Moore placed five companies on a state-mandated list of restricted financial institutions which engage in a “boycott of energy companies.” The five financial firms that practice environmental, social and governance (ESG) against traditional energy companies that are now ineligible for state banking contracts are BlackRock Inc., Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Morgan Stanley and Wells Fargo & Co.
West Virginians know that if passed, the act will increase the prices that Americans pay for energy, make the United States less energy secure, and likely do nothing for the environment despite Democrat Senators buying into the argument that it will reduce carbon emissions by 40 percent by 2030. No matter what actions the United States takes, large emitters such as China and India will continue to consume coal to ensure reliable and affordable power for their citizens and their economies. In 2021, China, the world largest emitter of carbon dioxide, and India, the world’s third largest emitter of carbon dioxide, together were responsible for over 38 percent of the world’s carbon dioxide emissions. Oxford University’s Eyck Freymann, a reader of Chinese policy in Chinese, indicates: Beijing has already decided it makes more sense to live with rising carbon dioxide levels than combat them.
And, that is what they are doing. In April, China announced it will increase coal output by 300 million tons this year—that increase alone being about half of total U.S. coal production. China already uses more coal for electrical generation than the rest of the world combined. China’s think tanks are expecting coal-fired power generation capacity to increase by 150 gigawatts over the 2021-2025 period. These plants easily operate for 4 or 5 decades. The new plants would put China’s known coal-fired generation capacity at 1,230 gigawatts—about 6 times the U.S. current coal-fired generating capacity. China’s carbon dioxide emissions in 2021 were over twice those of the United States and they are growing, exceeding 10,500 million metric tons in 2021. Between 2007 and 2021, the United States decreased its carbon dioxide emissions by 20 percent while China increased its carbon dioxide emissions by 46 percent.
Fossil energy accounted for 82 percent of global energy consumption last year, down from 85 percent in 2016, so in 5 years the world has made little progress to decrease their use, despite western countries providing massive incentives. Total energy consumption continues to grow, increasing last year by 5.8 percent, including a 6.0 percent increase in coal with China and India accounting for over 70 percent of its growth. Coal remained the dominant fuel for electricity generation with a 36 percent share. Non-hydroelectric renewable energy increased by 15 percent led by wind and solar power, which garnered 10 percent of the electricity market. The increase in non-hydro renewable energy only supplied 29 percent of the increase in total energy last year. With the demand for energy continuing to grow as a billion-plus humans seek to rise from poverty, it is unlikely that fossil fuels will disappear at the rate western countries have pushed for.
West Virginians know that the Manchin Schumer bill will increase energy prices and destroy their way of living. Inflation is skyrocketing and this bill will not reduce it despite the claims by these senators. Further, it will destroy the U.S. energy system, forcing Americans to rely on expensive and unreliable intermittent renewable energy with expensive batteries as back-up that cannot do the job.