The problem with governments trying to pick winners and losers is that they can never recognize a potential economic winner, and can never seem to avoid a market loser. This is the root flaw in President Trump's scheme to revive the coal industry. It would cost electricity users without improving the future of coal.
The Appalachian coal industry is suffering, no question of that. The overall industry employs about 75,000 people, roughly half as many as it did 30 years ago. Since 2000, coal's share of the U.S. power supply has dropped from 50 percent to 33 percent. But the Administration's reported plan to put the dying industry on life support – by establishing a “strategic electronic generation reserve” and compelling grid operators to buy electricity from at-risk plants – save it, or merely put it on life support? In fact, requiring profitable businesses to buy from “at-risk” ones is a good way to make fewer companies profitable, and put more at risk. Any federal intervention to order customers to buy electricity from specific power plants would be damaging to the markets – and ultimately to the consumer. The plan is meant to buy time for a two-year study of vulnerabilities in the U.S. energy delivery system. But we have seen before that temporary government plans have a way of becoming permanent boondoggles.
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