Obama’s Ohio Trump Card

Auto Bailout Triumphs Over Romney's Appeal to Coal

When the major networks declared last night that President Obama had carried Ohio and had thus clinched the White House, the analyses concluded that it centered on the auto bailout, not the coal industry.

As it turns out, the president didn’t need to carry Ohio to win a second term, having secured enough of the battleground states to give him a comfortable margin of victory. But the state still represents a cross-section of voters that any candidate would love to have in their column. To that end, President Obama focused on the revival of the auto industry that is integral to the region while Mitt Romney pounded Obama for his administration’s “war on coal.”

The president, obviously, made the more persuasive case. CNN reports that allowing General Motors and Chrysler to fail would have cost the federal treasury about $28 billion in lost tax revenues and in unemployment assistance over a two-year time frame. Instead of 400,000 lost jobs, 113,000 such positions were recovered-- all consisting of real people who voted.

Here, the electorate had a clear choice between one candidate who spearheaded the bailout and the other who felt that allowing the auto companies to bottom out and then naturally recover was the healthier economic choice. In essence, it’s Candidate Obama opting for a government-led solution compared with that of Candidate Romney who favored a free market revival.

The same thinking went into the coal argument. President Obama got elected four years ago on the promise of implementing a clean energy agenda. An extension of that was and remains tougher regulations on coal, which releases more pollutants than any competing electric generation fuels. His policies, which include tougher rules for mercury, nitrogen oxide, sulfur dioxide and greenhouse gases, are blamed by opponents for injuring coal’s status in the utility market place.

Romney then sought to fill that void, saying that he would attempt to rollback such rules and to let free markets reign. The laissez-fair argument is in line with his thinking, although it does contradict his earlier positions on the issue. Nevertheless, he used it to rally the coal constituencies in Ohio, and across Appalachia.

Path Forward

In the end, that strategy fell short. The coal miner unions didn’t endorse Obama but they didn’t back Romney either. Perhaps, though, Ohio’s coal communities didn’t buy the position that coal’s relegation in the market is solely attributed to tougher rules and regulations.

“There is no war on coal, period,” says Senator Sherrod Brown, D-Ohio, who won re-election. “There are more coal jobs and more coal produced in Ohio than there was five years ago, in spite of the talking points and yard signs.”

PolitiFact says that he is right, although the increased economic output is attributed to more exports headed to China and India -- not because more U.S. utilities are using coal to create electricity. With that, the U.S. Energy Information Administration says that coal production is up about 2 percent from the year before while 2,570 people held coal mining jobs in 2011 compared to 2,010 in 2007.

To be sure, coal mine production is down nationally by 11 percent during the same time period, says the energy administration. To that end, Romney’s coal stance carried the day in such states as Kentucky, Tennessee and West Virginia. But is the decline because of stricter oversight or is because natural gas has become more accessible and less costly? The price, right now, is pretty much on par with that of coal.

"I can tell you there will not be any new coal plants built, with the current price of gas and the forecast for the future for gas,” says Nick Akin, chief executive of American Electric Power, in a story appearing in the Charleston, WV Gazette.

It’s not just about the cost of natural gas and the increased monitoring of coal burning. It is also about diminishing coal reserves in the Appalachia region. Even the coal companies agree with that, noting that more accessible reserves are located in the Powder River Basin that cost less to dig out. That leaves surface mining as the biggest reservoir on the East Coast, which has its own set of controversies.

The path of least resistance is therefore shale gas. It is abundant and doable in Ohio’s Utica region. And it could be the next gold mine in the Marcellus Region that stretches down the east coast. Both presidential candidates emphasized those riches and the associated jobs.

When it was said and done, the issue of coal mining and coal jobs did not carry the election in Ohio, which had been considered the premier state to win. It was the auto bailout, all of which gave Obama the lift he needed to win re-election.

Ken Silverstein is editor-in-chief for Energy Central's EnergyBiz Insider, where this article originally appeared, and a contributor to Forbes. Follow him at @Ken_Silverstein.

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