When President Trump speaks Tuesday on energy policy, he is speaking on an industry utterly changed in the past 20 years.
At the turn of the century, Americans fretted over how much we depended on foreign oil. We worried so much about running out of gas that import terminals were built so that foreign firms could ship liquefied natural gas for use in our pipelines.
How things have changed. U.S. dependency on foreign oil isn’t even an issue anymore, as the U.S. approaches its new role as a net exporter. And natural gas has proven to be so abundant, thanks to fracking, that prices have plummeted. Not only are those import terminals being refitted to serve as export terminals, but gas has also overtaken coal as the largest source of electrical generation in the U.S.
This has mostly come about thanks to market forces. But there was an unfortunate interlude — the Obama administration’s concerted effort to bankrupt ( as former President Barack Obama himself put it) coal generators. His overt effort to drive coal out of existence through regulation, heedless of its effect on local communities, left very bad feelings toward Obama and Democrats in some regions of the country and led directly to the election of Trump.
Where Obama wanted to obliterate coal, Trump’s response has often been no better. He has actually proposed bailing out the coal industry, whose chief advantage as a fuel until now had been its economy. His idea is to somehow use national security as an excuse for mandating above-market prices for coal.
This is every bit as bad as similar schemes for so-called green energy, by which ratepayers are fleeced so that politically correct but unfeasible sources of energy are used. Coal, like all other fuel sources, must be allowed to sink or swim on its own economic strength. If it cannot survive in the market, it deserves to be replaced, just like anything else.
There are still ways to help the coal industry today and yet respect this basic principle. That begins with the repeal of unreasonable regulations that Obama created in order to kill the industry as fast as possible.
The abandonment of the Clean Power Plan is a good start in this regard. Trump announces today from West Virginia his intention to let states make their own decisions about carbon regulation. After all, control of carbon was only handed over to the EPA in the first place by a dubious 5-4 Supreme Court decision, in which only two of the current justices voted with the majority, claiming that the Clean Air Act required the EPA to regulate carbon dioxide (the stuff we exhale and trees inhale) as a “pollutant.”
Environmentalists are skittish and seem to believe that state regulation will cause hundreds of new coal power plants to spring up overnight. Their concerns only reflect their persistent and wrong-headed mentality that prizes government regulation over actual results. U.S. carbon emissions from electrical power have been falling since the mid-to-late Bush era. There’s a reason no one was rushing to build new coal plants, even before Obama’s regulatory assault on the industry. Utility customers generally don’t pay higher prices just to make a point, unless government stupidly makes them do so.
Which is to say, government should not prop up coal, but nor should government tear coal down unnecessarily.
Trump should drop all ideas about subsidizing coal. If the market demands, coal should be allowed to make a graceful exit. If coal cannot even survive in a friendly regulatory environment, then it simply cannot be saved. This is, as they say, the way the world works.
If that proves to be the case, then workers in the industry whose jobs are threatened by modern developments must adapt, as in all other industries that automate or fall afoul of consumer demand. That might mean making career a move to natural gas or some other related energy industry. But it is not the role of government to keep entire dying industries alive, just to satisfy political or other ambitions.