The American Conservative Alleges Coal Cronyism: Is It True?

Are conservatives at risk of abandoning free markets and embracing coal cronyism in its place? According to an article this weekend in The American Conservative, the answer is yes. Unfortunately, The American Conservative may be correct in its assessment.

Conservatives justifiably defend coal power against exaggerated accusations by the environmental left. Yes, coal power is more environmentally problematic than other power sources. Yes, there should be market mechanisms that account for coal power’s unique environmental harms. But the real environmental harms coal imposes are nowhere near many of the accusations made by the environmental left.

coal pixabay 1 (2)Coal has historically dominated American power production because it has always been substantially less expensive than other widely available power sources. Policymakers declined to put the brakes on coal power because affordable energy prices are crucial to household budgets and the economy as a whole. Consumers pay for higher energy prices not only in their direct household electricity bills, but also indirectly in the form of higher prices for nearly every good and service traded in the economy. Policymakers determined that allowing consumers to keep more of their income to purchase better housing, nutrition, education, healthcare, and consumer goods more than compensated for coal’s unique environmental damage.

When technological advances a decade ago brought about plentiful, affordable natural gas power, coal’s market advantages disappeared. It is now less expensive to produce power from existing natural gas plants than existing coal plants. A growing body of evidence suggests it also makes economic sense to dismantle existing coal plants and build new natural gas plants to replace them.

Free-market conservatives, myself included, have long defended coal power on the basis of the economic benefits coal power brings to American consumers and the American economy. Indeed, we could not have attained the standard of living we enjoy today without our heavy use of coal power. It is because we are “shills” for free markets and affordable energy, rather than shills for the coal industry, that conservative and free market public policy organizations have long defended coal power.

According to our principles, when technologies advance such that one form of power production becomes even more economical than coal power, we should applaud the advances and welcome the ascendancy of the more affordable power source. This should be the case even when, as has been the case regarding coal, the previously more economical power source was subjected to exaggerated environmental claims.

Ultimately, we should be advocates for truth and affordable energy. Truth inspires us to defend coal against exaggerated environmental claims. Affordable energy inspires us to applaud and welcome natural gas replacing coal as America’s dominate power source. We can mutually advocate for truth and affordable energy, defending coal against environmental exaggerations yet welcoming natural gas’s ascendancy. We need not, and should not, decide that defending coal against exaggerated environmental claims means we should favor it over more affordable and environmentally friendly natural gas. We shouldn’t bite off our nose to spite our face.

“The truth is that Appalachian coal is in terminal decline,” the American Conservative observes. “Deregulation and halting big-government green misadventures, both good things, will certainly lessen the magnitude of the industry’s decline, but not the directionality. Automation, resource depletion, competition from Western coal mining, and the natural-gas fracking revolution—one of the industries Trump champions—will kill Appalachian coal regardless of regulations.”

The American Conservative article is spot on regarding the economics. Overly burdensome regulations and environmental restrictions serve as headwinds against coal power. But natural gas is outcompeting coal regardless of those headwinds, and likely will for many decades to come. Conservative policymakers are more than justified to defend coal power against exaggerated environmental claims, but they should also be careful not to institute coal cronyism. Natural gas power has become more economical than coal power, and thus natural gas should become our power source of choice.

This article first appeared at Forbes.com.

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