From The Wall Street Journal:
Miners in western states says proposal goes against free market principles
By Dan Molinski | Updated August 9, 2017 4:57 p.m. ET
West Virginia Gov. Jim Justice is asking President Donald Trump to extend his support for the coal industry by providing some $4.5 billion a year in federal funding for Eastern coal, a proposal miners in Western states say goes against free-market principles.
The governor, who days ago switched parties to Republican from Democrat, said in an telephone interview Wednesday that Mr. Trump’s elimination of burdensome regulations have been very helpful in starting to get the U.S. coal industry back on its feet. But he said Appalachian region coal mines specifically—and the thousands of jobs they provide—remain at risk because of rising competition from natural gas and less-labor-intensive coal mines in Western states such as Wyoming, the nation’s leading coal producer.
If the Eastern coalfields were to disappear altogether, he said, then any disruption to the power grid in the East because of terrorism or other reasons could lead to tragedy because there would no longer be a nearby, abundant and easily-accessible energy source.
“The survivability of the Eastern coalfields is very, very iffy,” he said. “And if you lose the Eastern coalfields, you are putting the country at risk beyond belief.” He insisted his funding proposal isn’t for a subsidy, but rather a “homeland security incentive.”
Mr. Justice said he made the proposal directly to President Trump in the Oval Office recently. It calls for federal funding to pay Eastern power plants $15 for each ton of thermal coal they buy from the Central or Northern Appalachian region, which includes states such as parts of West Virginia, Ohio and Pennsylvania. This, for example, would allow a utility to pay something like $50 a ton to a mining company, but in actuality only be paying $35, he said. At 300 million tons a year, that could cost the U.S. $4.5 billion annually, he added.
“In the scope of things, that would be a drop in the bucket to protect ourselves,” Mr. Justice said. “And looking at the other side, you would put thousands and thousands and thousands of people to work, and the net-net of that is that the $4.5 billion would get eroded tremendously, so that it may end up costing almost nothing.”
Mr. Justice’s family owns businesses in the region, but he said they mostly produce metallurgical coal for steel-making rather than thermal coal, so his proposal wouldn’t directly benefit him. “I am not in play trying to pat myself on the butt,” he said.
There’s more at the original. Did he switch parties in the hope that President Trump would look upon this more favorably?
Governor Justice’s proposal is interesting, but perhaps I’d have more respect for it if he’d pay his damned back taxes!
The Governor’s argument reminds me of those used by President Obama to justify the automobile industry bailout. I didn’t approve of that,1 and I won’t change my principles just to support the coal industry.
It’s simple: the eastern mining companies must become efficient enough to compete with western coal. If they can’t, then they should fail.
- I only buy Ford vehicles, because Ford was the only American automobile company not to take the bailout. ↩