Coal industry subsidies based on a pretext

I could hardly believe this story when I first read it in the New York Times.  It just seemed too bizarre to be true.  A  DOE proposal which subsidizes  coal usage  in power plants, whose extra cost  will be passed on to consumers in electric bills.  Bob Murray of Murray Coal must be very happy with this one, as his investment in Trump is paying off big time.

Per the NYT EdOp:

 Mr. Perry’s proposal could add around $11 billion a year to the cost of electricity, depending on how the rule is interpreted, according to four separate research reports. Yet it would do little to improve the electrical grid. That’s because less than one-hundredth of 1 percent of power failures between 2012 and 2016 were caused by fuel supply emergencies, according to the Rhodium Group, a research firm.

Aren’t the Republicans known for opposing bailouts of any kind?  This one is based on a pretext, that we have fuel supply emergencies causing power failure outages.  Or we will have in the future.   As stated in the New York Times:

During Hurricane Harvey in Texas, where Mr. Perry was once governor, coal-fired power plants had to switch to natural gas because their fuel became too wet to be moved.

Here are the facts.    About 66% of our electricity comes from the burning of two fossil fuels, natural gas and coal.   The rest comes from nuclear (~19%), hydroelectric (~6%)  and alternative sources (solar and wind).    What has hurt the coal industry is competition from natural gas.  Employment in coal mining jobs has dropped due to automation of the mines.   Environmental air quality regulations have made coal fueled plants more expensive, encouraging a switch to natural gas.

Here is why it is so bizarre.  Opposition comes from environmental groups which would be normal, as the proposal will increase coal consumption.  But, allied with the environmental groups are the big oil and gas companies,  who would be hurt by reduced natural gas demand.   So,  the new regulations are bad for the consumer, the environment and big oil and gas companies (which support Trump on many issues).

The DOE has fast tracked the proposal through the FERC (Federal Energy Regulatory Commission) with 5 members.   Hopefully, they will not approve the DOE proposal.

Please read the New York Times article.

Stay tuned,



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