Don’t prop up coal if the economy can’t

Obama was following through on the threats he made during his campaign: “If somebody wants to build a coal-fired power plant, they can,” he said. “It’s just that it will bankrupt them.” His pursuit of this destructive goal had all of the expected political consequences, and also came back to bite Hillary Clinton’s campaign in 2016. It was entirely unnecessary, but necessity wasn’t the issue. It was a sacrifice to appease greed gods of the environmentalist movement.

Obama’s crackdown on coal was unnecessary because market forces were already whittling the industry away very fast. Fracking was not only turning America into an oil superpower, but it was also revolutionizing the electricity industry by making natural gas a superior and more affordable choice, something it hadn’t been previously.

It was as if, with his Clean Power Plan and other attacks on its way of life, Obama threw away a once-Democratic voting region for no reason except to make a point, or even just to improve morale among rich white liberals in East Coast cities.

Most of Obama’s anti-coal regulations have been scrapped. Yet coal is still down and on its way out. But unfortunately, Republicans are now tempted not just to end the government’s anti-coal crusade, but also to go further by propping up coal power generation wherever it has outlived its economic utility.

So far, they have resisted two opportunities. One would have overpaid for coal power supposedly based on “grid reliability,” even though spot market prices for electricity during storms and other times of great strain should already account for coal’s advantages as a consistent power source. The second bailout would have provided taxpayer financing to struggling coal power plants under the Federal Power Act.

But now there’s talk of an even more radical solution, nationalizing coal in the name of security, as an excuse to let government rescue it where the market cannot. If Republicans want to take this ludicrous step, invoking the Defense Production Act, they should first import and nominate British socialist leader Jeremy Corbyn to run for president, because they will be thinking alike.

The late Margaret Thatcher demonstrated the economic benefits of removing government from business ownership. Her revitalization of the British economy began with getting government out of the steel, coal, telecom, gas, rail and airline industries, among dozens of others. When government controls industry, political considerations dictate its conduct, creating massive inefficiencies and mismatches between supply and demand. One huge pressure for such a distortion was the miners’ demand that every mine remain open until it ran out of coal, no matter what the cost of mining it.

Through privatization, society’s capital can be efficiently allocated based solely on the aggregate choices of individual market actors. This is the pathway to economic growth and prosperity.

Every conservative believes in this concept, as do all liberals who understand economics. To abandon this idea now would be to embrace a crony culture and expansive welfare state that conservatives have been vigorously denouncing since the Tea Party era, and before that since the Reagan era.

The historical attractiveness of coal as an energy source has been its economic feasibility. Even as renewables have demanded, and still require, massive subsidies and tax breaks to provide power, coal has always been available at a reasonable cost per unit of energy. The moment that ceases to be the case, it will have lost its utility.

Nationalization would also guarantee coal’s swift demise. Radical environmentalists are licking their chops about how they could use such a precedent. The next Democratic president, they reason, could nationalize coal-powered plants in the name of national security and then shut them down forever.