The political landscape is changing. The casual observer would assume that both the Left and the Right are moving to their ideological extremes. However, closer examination reveals a common thread of support for government intervention in the marketplace by the cronies. The debate over energy production highlights this growing trend best.
On the Left, Gov. Jerry Brown set California on course for 100 percent carbon-neutral energy, effectively eliminating coal and natural gas from the state. California already chased nuclear energy producers out of their state. California’s actions are radical, expensive, and neglect to account for the ways the market will shape itself in the future.
On the Right, President Trump and Energy Secretary Rick Perry are advocating for taxpayer subsidies for the coal and nuclear industries. In January, the Federal Energy Regulatory Commission unanimously rejected a proposal by the DOE and Perry to prop up coal and nuclear plants with generous taxpayer subsidies. Despite FERC’s ruling, the administration and the coal and nuclear industry continue to push for the bailouts on national security grounds. The decision to subsidize coal and nuclear at the taxpayer’s expense is expensive, to the tune of $34 billion of taxpayer dollars, and neglects to account for the ways the market will shape itself in the future.
While both policies are problematic, Brown’s move is at least understandable. He is merely moving further left than his liberal counterparts in other states. A few years ago, Gov. Andrew Cuomo announced a plan to increase New York’s clean energy production, but even he didn’t set the goal at 100 percent. Brown is seemingly just trying to get ahead of the curve in his party’s race off the cliff, and his announcement is new enough and far enough away that he doesn’t need to have a plan for how to get there.
On the Right, the administration’s plan is less intelligible. Conservatives have long been the evangelists of the free enterprise system, and as such, believe market forces should drive energy policy. Sadly, the administration’s proposal injects more bureaucratic interference into the market – and employs a tactic from the Obama administration: picking winners and losers in energy markets.
My perspective is simple: if coal and nuclear can compete with natural gas, then that’s exactly what they should do, compete. However, the administration’s continued attempts to artificially augment the coal industry’s performance comes at the detriment of taxpayers, and runs counter to the economic philosophy that has reduced the cost of energy over the past 50 years. In most of the country, legacy energy sources have been out-competed by more efficient, cleaner, safer, and more abundant options, so one has to scratch their head when the administration proposes propping up failing industries with subsidies. Just like wind and solar, if subsidies were the only thing supporting an industry, then the market should drive producers to other options.
To be clear, I’m not anti-coal. I like coal. I believe coal has helped power the country's growth into an economic superpower. But I also like clean energy and renewables. That said, if either is to last into the future, they must be efficient and abundant. No energy source should require an endless stream of taxpayer dollars to subsist.
The political landscape may be shifting underneath our feet, but history has shown that the “Jerry Brown model” doesn’t work – so why replicate a failed system with coal? When it comes to the future of energy, conservatives would be wise to stick to the tried and true tenants of the market regardless of who holds the reins of power.
Charles Sauer (@CharlesSauer) is a contributor to the Washington Examiner's Beltway Confidential blog. He is president of the Market Institute and previously worked on Capitol Hill, for a governor, and for an academic think tank.