The Department of Energy is about to create the 21st century’s Jones Act to “rescue” the coal industry. Not a bad idea given that the Obama administration conducted all-out war on it. Their method of choice, however, is ill-advised and is almost guaranteed to backfire.
One of the Trump administration’s campaign promises was to help the coal industry. His Department of Energy team is trying to make good on that promise. The nation needs to have as many major parts to the energy sector as we can. Diversity helps.
Their intent was originally stated as trying to level the playing field and fix the unfortunate favoritism Obama had shown for fringe technologies and very expensive methods that did not scale well nationally without massive government intervention (anyone remember the solar debacle?). That sounded great.
Now, the administration seems to have gone astray and is instead showing the same sort of favoritism, only toward coal. They first attacked natural gas as more vulnerable to cyber-attacks than coal. This is nonsense.
The entire energy sector needs better cyber protections, and most are working hard to get there. Natural gas and our pipeline system, in general, is doing a very laudable job in this regard.
For example, an American Petroleum Institute report outlined how natural gas pipeline companies have mechanical controls in place that cannot be intruded upon by a cyber-attack into a pipeline’s industrial control systems. In contrast, coal plants have demonstrated weaknesses in all the same industrial control system (computers that run factories, and electric generation facilities).
Too bad the administration is now doubling down on their error. They want the Department of Energy to mandate the use of coal-generated energy through subsidies and they are throwing the national security card as its justification. This is wrong-headed policy.
We have been here before folks. The shipbuilding industry once convinced Congress to pass the Jones Act, a bill that mandated that goods moving from one U.S. port to another had to move on ships built in the United States. The rationale was that it would help keep American shipbuilders in business so they could build Navy fighting vessels in a war.
Sounds good, doesn’t it? Except that now, cities like Washington, D.C., have to buy road salt in the winter from South America instead of from an American company in Louisiana, because the transport costs from New Orleans to D.C. is twice the amount as from the far end of South America.
Additionally, none of the shipyards that make (very infrequently) commercial Jones Act ships build any naval vessels, and don’t really have the capability to do so.
Clearly, the national security justification is a complete red herring; it is bogus. And the national security justification for wasting taxpayer money to force the use of coal is every bit as bogus.
President Obama tried to use a similar national security rationale as a pretense for protecting green energy. The Obama administration used the Defense Production Act of 1950 (DPA) to prop up the domestic biofuel sector under the Navy’s “Great Green Fleet.” Many in Congress disagreed with this rationale, and many lawmakers should similarly criticize the Trump administration’s abuse of this law in this case.
The DPA was designed to authorize limited industry protections for the single objective of maintaining U.S. national defense. Ironically, Trump’s Energy Department believes it has the authority under DPA to order grid operators to purchase electricity from these failing coal plants.
Give coal (and the rest of the energy sector) a level playing field. Remove onerous regulations beyond what is needed to ensure safety and realistic protection of the environment, and let them compete.
If they succeed, fine. If they fail, that is the way a market system functions. America has a robust energy sector, the best we have had in decades; let it function as a free market — fair and open competition.
Energy Secretary Rick Perry should not become an “Obama” at the other end of the spectrum. Government picking favorites was wrong in the last administration, and it is wrong now.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.