Why Trump Shouldn’t Bail Out a Dying Coal Giant
In the months leading up to the 2016 Presidential Election, Donald Trump made the decline of the coal industry a central issue in his campaign. His massive rallies attracted droves of miners, with each sporting his hard hat and hoisting up signs that read “Trump Digs Coal.” Trump struck a chord with the frustrated coal industry and his promises to “put the miners back to work” paid off. These appeals undoubtedly enabled Trump to sweep the Rust Belt and string together an impressive set of victories that propelled him to the presidency.
Since taking office, President Trump has made efforts to fulfill his promises to the coal industry by slashing regulations he deemed burdensome. To a certain extent, President Trump is correct in asserting that many environmental regulations have gone too far. In fact, many of these regulations are counterproductive; their stringencies hinder innovation and investment that would lead to more sustainable practices. However, Trump’s tireless efforts to revive a dying industry are largely pointless and ineffective.
Coal’s decline is not entirely attributable to government overreach. The emergence of cheaper and more efficient energy sources, like natural gas, has significantly reduced coal’s function as a primary provider. Studies show that coal’s share in the energy market has declined from 37% in 1950 to 16% in 2010 and that consumption has fallen from 815 million tons in 2000 to 511 million tons in 2016. Amidst coal’s steady decline, natural gas, nuclear, and renewable sources have all experienced growth ranging from slight to substantial. These patterns are the result of free market forces and signify that coal is destined to be replaced in time. Rather than providing support to the coal industry, President Trump should allow the free market to determine the future of the energy sector. This is not an anti-coal stance but rather a pro-growth view. If a renewable source such as solar was experiencing a similar decline, the same principle would apply.
President Trump’s commitment to the coal industry will be put to test following FirstEnergy’s recent request for a bailout. FirstEnergy, one of the nation’s largest coal utility companies, filed for bankruptcy in late March and requested federal support to keep a number of plants open. FirstEnergy’s troubles are a direct result of higher availability and lower cost of alternatives. Despite his personal allegiance to coal, President Trump should refrain from granting FirstEnergy’s request. By subsidizing the coal industry, President Trump would only provide artificial support and prolong its inevitable decline. Government overreach in the energy sector, often accomplished through subsidies, hurts consumers by raising prices and the future environment by discouraging innovation. Investment and innovation are best accomplished in open and competitive markets, so we should not distort competition through subsidies but instead allow natural market forces to drive down costs and foster technological advancements. A pro-market, all of the above approach optimizes the energy sector and presents the greatest opportunity for a smooth transition to clean energy reliance, a shift we all would like to see.
An energy sector driven by free market forces is something the American Conservation Coalition fully supports. This stance, despite what some might argue, is not anti-coal. The ACC, in its all of the above approach, supports energy sources that the market rallies behind rather than choosing favorites like the government and radical environmental left so often do. An energy market rid of subsidies would create the strongest competition, lowest prices, and best environment for innovative progress. If President Trump decides to bail out FirstEnergy, he would provide a mere temporary remedy to coal’s decline. On the other hand, if he rejects the request, he would send a powerful message that rightfully prioritizes a free market energy sector over a set of campaign promises.