If it’s not broken, why fix it?

DanIn the world of economic development, we are always looking to tout Missouri’s strengths. For years, our low energy prices have been a key selling point.

Even today, Missouri is among the leaders in energy prices. Only five states currently have cheaper energy than Missouri, according to the latest numbers from the US Energy Information Administration.

In today’s information economy, our low prices are critical as we seek to attract energy-consuming tech investment—such as large data centers—to our state.

danquoteIf you ask how we managed to achieve our low prices, the answer is simple: coal. But if you want to know what we need to do to keep our price advantage, the answer becomes much more complex.

Coal-fueled generation accounts for the lion’s share of Missouri’s power supply. Coal is cheap in Missouri because of massive domestic coal reserves. Our state’s central location and rail infrastructure make it cost-effective to get that cheap coal to the many coal-fired generating units in our state.

The old adage is, if it’s not broken, don’t fix it. However, the Obama administration has other ideas.

New Environmental Protection Agency regulations threaten to upend Missouri’s powergeneration model. The administration’s goal of reducing carbon output from existing power plants is targeted squarely at Missouri and a handful of similar coal-dependent states. Read more about the federal efforts here.

Missouri currently depends on coal for more than 80 percent of its energy, approximately double the national average. As the administration’s rules are implemented, they will certainly hurt here the most.

So what do we need to do to preserve Missouri’s energy price advantage?

The Missouri Chamber is already working on this. In 2014, we worked with the general assembly to secure passage of House Bill 1631, which gives our state more control of how we choose to respond to the crippling federal measures.

Missouri also needs to begin the process of diversifying our energy supply. There are no easy or cheap options here. Moving away from coal means moving to an energy source that is more expensive for Missouri residents and businesses. Yet, in the current political climate, this is something we must explore.

As you read this issue, you’ll see some of the work being done in Missouri on other energy fronts.

For example, our state is home to one of the world’s most productive nuclear reactors. We are also seeing innovative use of natural gas and expansion in solar and wind efforts. Missouri is also a leader in biodiesel production.

Another course of action is to continue to express our concerns about the wisdom of energy policy decisions. There is still time for Missouri to respond with a strong voice and demand that cheap, plentiful, reliable coal remain a cornerstone of energy production in our country.

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