March 31, 2017

Old King Coal will be a Merry Old Soul Despite Liberal Claims to the Contrary

Timothy Birdnow
So if somebody wants to build a coal-powered plant, they can; it's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted.

That will also generate billions of dollars that we can invest in solar, wind, biodiesel and other alternative energy approaches.

The only thing I've said with respect to coal, I haven't been some coal booster. What I have said is that for us to take coal off the table as a (sic) ideological matter as opposed to saying if technology allows us to use coal in a clean way, we should pursue it.

So if somebody wants to build a coal-powered plant, they can.

It's just that it will bankrupt them

Barack Obama to the S-F Chronicle Editorial Board 2008

Here is a purposely deceptive little item written by a McClatchy writer and designed to temper enthusiasm for Donald Trumps lifting of draconian regulations on coal. The articlee, entitled Why Trump’s rollback of Obama rules won’t do much for coal country and written by Curtis Tate makes the following claims:

"Trump rolled back Obama administration regulations considered detrimental to the industry. But the president’s actions will bring minimal benefit to the coal-producing regions that helped him win the White House, according to the government’s own projections.

At best, according to government data, coal production will increase by about 5 million tons a year by 2040 out of 800 million tons overall under Trump’s order."

End excerpt.

But what the writer cites is not new predictions by the government but a July 2016 article by the Obama Energy Information Administration which is making predictions based on then current trends. Those trends were predicated on the crushing regulations that Obama was using to kill the coal industry remaining in place. As usual with liberals, the writer either doesn't understand or chooses not to accept the reality that coal has been declining entirely because government has been waging war against it, and it will rebound if allowed to do so.

He crows about the lower price of natural gas, but fails to understand that fracking is more expensive than coal mining, and the U.S. is the absolute king of coal, the Saudi Arabia of coal. Coal production WILL improve without the heavy hand of government.

The chart at the top of the EIA report makes that perfectly clear; coal production spiked in the West in 2010 and then dropped off precipitously. While fracking did indeed come in during this time period so too did the Obama regulatory leviathan rise from the sea at this time. Would coal have dropped off so drastically without the iron boot at the throat? Interior region coal remained largely steady, and yes Appalachian coal dropped off steadily since the 1990's one can still blame at least in part heavy environmental regulations from the Clinton Administration, the Bush administration (which was not very friendly to coal) and then Obama.

This is a classic example of liberals scoring the economy from a static rather than dynamic view. It is why so many Democrats argued against Reagan's tax cuts, with George H.W. Bush (yes, a liberal) calling it "voodoo economics"cutting x amount of income would ultimately raise revenue levels. The Left could not or would not understand that less taxation means more economic growth. And more innovation.

Yes, the old way of doing things with coal is finished, but by reviving the industry they will find new, cleaner, and cheaper ways to be competitive. Regulations and taxes help nobody but the government and environmental groups.

The article continues:

"However, power companies were already moving away from coal and toward cleaner energy sources because of ongoing economic trends. Cheap natural gas produced by hydraulic fracturing has displaced numerous coal-fired power plants. Mechanized mining has been reducing coal employment for decades.

"Unless he does something about natural gas or technological change, it’s really not going to reverse the change we’ve seen,” said Ken Troske, an economics professor at the University of Kentucky. "If anything, these actions will slow the decline.”

Tyler White, president of the Kentucky Coal Association, said he couldn’t predict how many jobs Trump’s executive order would create, "but I can tell you that it definitely will help stop the bleeding.”"

End excerpt.

The stupidity of saying we shouldn't do this because it may not help all that much should be obvious; as Tyler White observes, it at least will help stop the bleeding. Please note that the naysayer here is a professor, an ivory-tower theoretician and not the practical man, the doer.

And the American Action Forum reported that 8,100  jobs are lost for every billion dollars in regulatory costs and even the regions where coal is growing (such as Wyoming or Illinois) jobs are disappearing. Industry changes do not account for the losses.

Here is an explanation of why Appalachian coal has become more expensive than coal from Wyoming (or Illinois). From the article:

"The origins for this coal-to-coal switching lie in the sulfur content of eastern and western coal. Western coal has lower sulfur content, and with more stringent sulfur air emissions rules, burning western coal was the cheaper option.

Western coal is still competitive because of geology: most of the 'easy' coal has already been mined in Appalachia, leaving the harder to reach, more expensive coal seams"

End excerpt.


At the top of the column is government regulation. Yes, Appalachia is tapping out - but then so too was American oil until fracking came along. But the main reason is EPA regulations.

Look, coal's share of the u.S. energy sector went from 53% in 2005 to 34% by 2015, which is guaranteed to seriously wound any industry. And the price of metallurgical coal completely collapsed in the U.S. But also the Chinese have stopped buying so much U.S. coal, and that has been a function of a weak economy in China coupled with efforts to move away from basic industrial production. Chinese steel production had a growth rate of 10% as late as 2012, but that fell to 0.6
5 in 2015 and has not materially recovered. While the Chinese were buying Metallurgical coal, a drop in one sector of an industry will affect the entire market.

The Chinese economic woes are directly tied to the weak American economy. Fix that and China will become a better customer. It all hangs together.

In the end the liberals will try to claim that Trump's actions will do nothing not because they will not but because the liberals WANT them to do nothing. It is politics wrapped in economics/science.

For more on how Obama's regulations ruined coal and other industries, see:


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