Tag Archives: coal

Policy For Dummies

Permit me to channel–okay, parody– Elizabeth Barrett Browning.

How do I ridicule thee? Let me count the ways.
I sneer to the depth and breadth and height
My soul can reach…

President Trump–in his obsessive effort to eradicate anything and everything that his predecessor did (he was black, you know)– has reversed Obama’s moratorium on new leases for coal mining on federal lands.

Although that moratorium was good for the environment, the impetus for it was actually financial. As Think Progress has reported,

Taxpayers are estimated to be losing $1 billion a year in revenues because coal companies are not paying royalties on the actual market price of coal extracted from federal lands. Royalty payments are split between the federal government and the state where the coal is mined, and coal lease sales in the in the past decade garnered close to $1 per ton in bids.

This is above and beyond the so-called “royalties loophole,” which allows coal companies to sell publicly owned coal to subsidiaries at artificially low prices. An Obama-era rule had closed that loophole, but the Trump administration has already stayed the legally binding rule, and has initiated court proceedings to throw it out entirely. Under the loophole, taxpayers lose millions of dollars annually.

So–let’s just “count the ways” that this latest impulsive eruption was both stupid and venal.

As noted, it will cost taxpayers. And it will cost us without doing anything at all for coal miners.

Even if new leasing goes forward, critics say Trump’s order to lift the moratorium will do more for coal industry executives than it will for coal communities. Coal jobs have been in decline for decades — and not just because coal production is falling. Automation and new mining processes have diminished the number of jobs per ton of coal.

“This order won’t bring the coal industry back, but it will ensure coal companies rip off American taxpayers for years to come,” said Jesse Prentice-Dunn, advocacy director for the Center for Western Priorities.

Trump has already loosened regulations that prohibited coal companies from polluting the nation’s drinking water, alarming public health officials, among others. But his love affair with coal also ignores market economics. Between coal companies’ massive amount of reserves (over 20 years worth) and the rapidly declining use of coal, the market has sent a strong signal about coal’s future.

Receiving such signals–or, let’s face it, comprehending reality–isn’t Trump’s strong suit.

Reporting on the move, Reuters made similar observations.

Since 2012, coal production has plunged more than 25 percent to the lowest levels since 1978 due to falling prices. The industry has been hit with massive layoffs and bankruptcies.

Even if the rollback of the moratorium helped coal miners– an outcome analysts uniformly dispute–the number of Americans employed as coal miners is far fewer than Trump evidently believes. According to the Washington Post, more people work at Arby’s than in coal mines.

Experts in the industry have already pointed out, repeatedly, that the coal jobs are extremely unlikely to come back. The plight of the coal industry is more a function of changing energy markets and increased demand for natural gas than anything else.

Another largely overlooked point about coal jobs is that there just aren’t that many of them relative to other industries. There are various estimates of coal-sector employment, but according to the Census Bureau’s County Business Patterns program, which allows for detailed comparisons with many other industries, the coal industry employed 76,572 people in 2014, the latest year for which data is available.

That number includes not just miners but also office workers, sales staff and all of the other individuals who work at coal-mining companies.

Although 76,000 might seem like a large number, consider that similar numbers of people are employed by, say, the bowling (69,088) and skiing (75,036) industries. Other dwindling industries, such as travel agencies (99,888 people), employ considerably more. Used-car dealerships provide 138,000 jobs. Theme parks provide nearly 144,000. Carwash employment tops 150,000.

Maybe we can get Trump to turn his attention to carwashes. Used-car dealerships would be a natural fit…

Or maybe he can enlist a new ghostwriter and publish another book; it could be titled The Art of the Very Bad Deal or Policy for Dummies.

 

 

 

 

Politics and Protectionism

I think I know why Santa Claus punishes disobedient children by leaving lumps of coal in their stockings.

It’s been interesting to follow the response of Indiana coal interests and the politicians they influence to the EPA’s recent–and long overdue–efforts to reduce carbon emissions from existing power plants.

It may surprise readers to know that there are currently no limits to the amount of carbon pollution a power plant can dump into our air. (It surprised me!)

The lack of any rules governing how much carbon an existing plant can spew has had significant consequences–not just for our climate, but for public health. An IU Medical School study calculated the public health cost of burning coal at five billion dollars annually, due to the effect on heart disease, lung disease, asthma and related respiratory disorders.

Recently, a speaker at Carnegie Mellon’s Distinguished Lecturer Series reported that air pollution kills as many people each year as smoking. (While smoking is riskier, only 20 percent of the population smokes. Everyone breathes.)

Indiana’s coal industries have long been accustomed to favorable treatment by state agencies, and their hysterical reaction to these overdue rules shows just how dependent they are on political protection from the forces of the free market, and on the indirect subsidies we taxpayers provide by allowing them to pollute with impunity.

Here’s an analogy: We don’t allow manufacturers to dump toxic waste into our rivers; we expect them to dispose of their effluent properly, and to include the cost of that disposal in the price of their products. That may make it more difficult for them to compete, but it’s a cost of doing business–we don’t say, well, if it is too expensive not to poison our water supply, just go ahead and poison us.

Some of the hand-wringing and dire warnings are a recognition that the price of clean energy–especially wind and solar–has plummeted; in fact, utilities all over the country are seeing wind and solar bids that are cheaper than coal, the price of which has been steadily rising. (Austin Energy in Texas recently announced that it’s buying solar at half the price of coal, and that electricity costs for Austin residents will drop; an Oklahoma utility (AEP) says its purchase of wind power will save customers over 50 million dollars.)

The policy question is pretty simple: why should government protect the coal industry from market forces by asking taxpayers to continue paying for the industry’s externalities?

The answer is pretty clear, too: why in the world would we subsidize something that is costing the state clean energy jobs, contributing to climate change and making Hoosiers ill?