Energy Subsidies and the Swamp

Draining The Swamp Does Not Include Energy Subsidies

by Stacy Washington

As a matter of policy, President Barack Obama set the destruction of the coal industry in his sights and was unfortunately efficient in executing his mission. In response, the Trump administration executed a directional shift towards supporting clean coal, acknowledging that over 80 percent of Americans’ electrical needs are filled by coal production.

After the Federal Energy Regulatory Commission rejected proposed rulemaking by the Department of Energy under Secretary Rick Perry, Ohio-based FirstEnergy Solutions Corp asked the DOE to use the Defense Production Act of 1950 to subsidize coal and nuclear plants in a specific market area. FirstEnergy needs these subsidies as the company is in bankruptcy.

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Using DPA is feasible because it enables the president to place government orders of scarce essential resources ahead of private ones, and can nationalize critical resources through loan guarantees and subsidies. This makes sense during a wartime footing — clearly, the coal industry has experienced the brunt of Obama’s attacks on the coal industry — but the proposed usage of DPA here is a misapplication.

Conservatives rightly cried out against the auto industry bailouts, and this action would effectively rescue a very specific segment of the energy industry. Imbalances in the market would be artificially created, as just one aspect of energy production would be subject to government incentives.

A dangerous precedent would be set: when in trouble, expect the government to essentially nationalize your industry and create market forces that prohibit failure. A safety net like that could encourage reckless business practices; unintentionally creating negative outcomes for energy company shareholders and artificially increasing prices for consumers.

There is also a lack of logic present here…

Read the Rest of this important story at the Daily Caller…

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