Study: ‘War on Coal’ will hit Wisconsin manufacturing hardest

By M.D. Kittle | Wisconsin Reporter

MADISON, Wis. — Of all the national casualties expected from the Obama administration’s “War on Coal,” manufacturers in Wisconsin’s 6th Congressional District could be hit the hardest.

That’s the finding of a new analysis, published by the conservative Heritage Foundation, that tracks the long-term economic impact of the Environmental Protection Agency’s proposed limits on carbon dioxide emissions — strict standards that, industry officials assert, would all but kill construction of new coal-fired power plants and force existing facilities into early retirement.

Energy expert Nicolas Loris analyzed the effects of a 20-year phase-out of coal. His study projects significant job loss — particularly in the manufacturing rich Midwest. By 2023, the regulations, if put into effect, would cost the U.S. economy some 600,000 jobs, sinking income by about $1,200 annually for an average family of four, according to Loris, who serves as a Herbert and Joyce Morgan Fellow at Heritage, a Washington, D.C., think tank.

Drastically reducing coal from the U.S. energy portfolio over a relatively short period of time, critics of the EPA’s plan contend, will drive energy prices significantly higher, crippling the U.S. economic recovery led in large part by a resurging manufacturing sector.

“When the price of energy is driven up, these energy-intensive industries in manufacturing will be hit the hardest,” Loris told Wisconsin Reporter.

The analysis finds Wisconsin stands to lose, on average, more than 1,460 manufacturing jobs per congressional district — about twice the national average.

Wisconsin’s 6th Congressional District would lose 2,000 manufacturing jobs by 2023, more than any other district in the nation, according to Loris’ study.

Manufacturing employs 86,000 people in the congressional district, accounting for about 24 percent of the workforce and putting food on the table for many more, according to U.S. Census Bureau data. This industrial rich region — home to manufacturing giants such as Mercury Marine, Oshkosh Corp., Bemis, and Kohler Co. — stretches from Lake Michigan in the east through the spring-verdant hills and valleys of Columbia County in the west.

U.S. Rep. Tom Petri, a Fond du Lac Republican, has represented the region for 35 years. He has grave concerns about the EPA’s regulations and their potential effect on manufacturing.

“I have opposed these proposed regulations from EPA which would have a devastating impact here in the Sixth District and throughout Wisconsin,” Petri said in an email response to Wisconsin Reporter. “Especially in recent years, the EPA has tried again and again to push onerous regulations without consideration or care for the economic and personal losses that would come with them.

“I don’t think anyone would agree that losing nearly 2,000 jobs in our area alone is a cost worth bearing,” the congressman added.

At the top of his webpage, U.S. Sen. Ron Johnson, R-Wis., notes that it costs Americans an estimated $1.75 trillion to comply with federal regulations each year. To put that hefty number in perspective, $1.75 trillion is larger than all but eight economies in the world. EPA’s “War on Coal,” Johnson and other critics insist, will only add to that daunting dollar amount.

It’s not rocket science, Johnson said. If you want to strengthen the middle class, you have to strengthen the economy. That’s the same formula for pulling people out of poverty. To do that, you have to make your nation an attractive place for people to “put their capital at risk,” to “invest in business, to grow a business” and create good-paying jobs.

“One of the things that make America somewhat unattractive for business investment is onerous regulatory burden,” the senator told Wisconsin Reporter. “It kind of puts it in perspective doesn’t it, $1.75 trillion? That is what we are burdening job creators with each and every year. It doesn’t surprise me a lot of people are sitting on the sidelines with their capital.”

President Obama has pushed tougher GHG emissions reductions as part of his Climate Change agenda, not just in the U.S., but globally.

“Protecting our environment and meeting the challenge of global climate change is a critical mission for me as our country’s top diplomat” Secretary of State John Kerry wrote in a recent letter to all 275 U.S. embassies and across the State Department. Kerry urged “chiefs of mission to make climate change a priority for all relevant personnel and to promote concerted action at posts and in hosts’ countries to address this problem.”

Obama and Kerry insist the CO2 regulations are about saving the planet. Much of the business community sees them as killing the economy.

“To have a national imposition of this type of regulation, which increases costs and penalizes certain areas that depend on coal, is shortsighted,” said Steve Jenkins, president of the Fond du Lac County Economic Development Corp., based in the heart of the 6th Congressional District’s manufacturing base.

“It’s not a political issue, it’s an economic issue that impacts regions, states and individual workers,” he added. “We can’t forget that people’s lives are at stake here.”

In Fond du Lac County alone, the manufacturing sector boasts some 10,000 jobs, and there are many more that serve the county’s factories, Jenkins said. Heavy manufacturing accounts for about 26 percent of direct employment in Fond du Lac County.

The economic development expert said the global economy post-2008 has accelerated in change and competitiveness at an exponential rate, and the federal government has failed to keep pace. The Obama administration, through its proposed standards on coal and other stifling regulations, is implementing a “1950s mode of government applied to a 21st century rapidly evolving situation,” Jenkins said.

The Heritage Foundation’s Loris notes Wisconsin manufacturers created more than 13,000 net new jobs last year, making it a national leader in manufacturing growth.

He said EPA’s climate regulations could “suck all the affordable energy out of that trend, and wipe away Wisconsin’s economic improvement.”

The charge from climate change activists is that the loss of manufacturing jobs is nothing compared to the damage greenhouse gas emissions are having on the planet. Loris said EPA’s unrealistic proposals would make a negligible difference while disrupting the economy and diminishing the U.S. ability to address real environment problems. He said there is nothing wrong with energy-shifting to more renewable sources, but those sources have to be effective and efficient enough to power the nation’s industrial needs.

“These climate regulations are all pain and no gain. And the pain cuts especially deep in Wisconsin,” Loris wrote in a recent op-ed piece.

Contact M.D. Kittle at mkittle@watchdog.org