April 29, 2017

Energy Policy Seen through Bituminous Colored Glasses

Timothy Birdnow

Here is an article I find tough to swallow. Richard Zuber makes the argument that America should remain in the Paris Accord because it benefits coal producers here in the States. I don't follow his logic at all.

Here is the crux of it:

"But putting emotions aside, in an unexpected and ironic twist, the COP21 presents an opportunity for coal to beat Obama at his own game. And this is exactly what is happening. America’s largest players in the coal and oil industries, including Cloud Peak and Exxon Mobil, have reversed their opposition to the deal and have advised Trump to remain within the framework, arguing that it is better to be part of the club and help steer policy rather than excluding oneself from the debate.

Indeed, the Trump White House and American coal producers can use their participation in international talks on the future of the world’s energy mix to promote the development of high efficiency, low-emission (HELE) coal-fired power plants and carbon capture storage (CSS) technology. All major international bodies agree on this point: the goals of the COP21 cannot be implemented without upgrading coal plants. As such, implementing the accord could turn the U.S. into a global clean coal leader, save thousands of jobs in the process, and ensure the continuation of an industry worth billions of dollars to the country’s economy."

End excerpt.

This is wrong on so many levels.

First, Cloud Peak Energy is a Wyoming-based company producing low sulfur subbituminous coal. They have a clear vested interest in maintaining the Paris Accords because it forces the higher sulfur coal regions (like West Virginia or Pennsylvania) out of the market. Oh, and Cloud Peak has joined the Global Warming crusade. (Granted, so has Peabody and Arch.) Mr. Zuber should rather have asked Peabody Energy or Arch Coal what THEY think rather than the winner of the "who wants to stay in the coal business" lottery. Exxon Mobile is an oil company, too, and would obviously want to keep coal from coming back to compete with oil and natural gas. OF COURSE these two companies want to keep Paris intact.

Second, what is an accord (we can't call it a treaty) intended to do? It is a series of restrictions, of regulations, a body of pseudo-laws designed to limit and contract. An agreement of this nature can be manipulated to the benefit of some but at the expense of others; it does not promote open market prosperity. That is precisely what it is designed to do; force people to sell less coal, not more. Any time you limit the supply you raise the demand, making the product more expensive. This may benefit some investors (such as at Peak) but it hurts the average worker, and it hurts the average consumer who has to pay more for electricity as a result. This is crony capitalism at its most onerous.

And the deal will only last as long as the U.S. - the world's largest coal reserve - continues to play the restriction game. Unleash American coal and the cartel naturally falls apart. The whole purpose of this was to get America OUT of the coal business, not into it. Saying we should stay in is daft from any perspective but the Environmentalist and the crony capitalist.

As I say, I just don't understand Mr. Zuber's reasoning here; how does restricting coal production promote coal and save coal companies? There is no real incentive to develop true clean coal technology if you are restricting the use of the lower sulfur coal, after all. Why bother? Necessity is the mother of invention, not government programs and grants. If there is really a demand for "clean coal" the market will develop it - not an international accord.

Mr. Trump owes his Presidency in no small part to the good folks in coal country, and if he reneges on this he will lose those Reagan Democrats to the Donkeys as Bush did after Reagan left office. Trump made a promise. He promised to tear up these horrible international deals designed primarily to screw America. Coal miners weren't the only ones in this part of the country to vote for Trump; people who hate the encroachment of internationalism did also. Those who saw these deals as hurting free trade did too. Trump has already retreated on several promises he made, including prosecuting Hillary, repealing Obamacare, and stopping the influx of Syrian refugees (Trump has taken in twice as many as Obama ever did, and that has nothing to do with his temporary travel ban.) He's talking about reforming NAFTA, not tearing it up. He's moving into the position of a globalist. If he fails to tear up the Paris Accord he will have morphed into Jeb Bush with bad hair.

It will be the finish of him politically.

From any angle this is a terrible idea. These types of accords have one purpose - to restrain the American economy and to siphon American wealth to other countries. Like the plover, those little birds that land inside the mouths of crocodiles and eat the flesh from between the predator's teeth, Third World countries seek to scavenge off the American diet. They don't like to simply act as dental floss for the American croc, but want a bigger share of what America is eating. They don't want to have to make the necessary reforms to produce it themselves (as Japan did after first contact with the U.S.) but prefer to simply swindle it from us. How do you swindle vast sums of wealth and reduce competition so you can make money with inferior capabilities? You impose regulations. That is the purpose of all these deals and only a sucker would fall for it.

I have thought many bad things of Mr. Trump, but never that he was a sucker. I hope he doesn't fall for this nonsense.

Posted by: Timothy Birdnow at 08:39 AM | No Comments | Add Comment
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