Energy

FERC Shuts Down Trump's Coal Cronyism

How an independent regulatory agency is supposed to work

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FERClogo
FERC

The Federal Energy Regulatory Commission has rejected the Trump administration's cronyist proposal to require electric power generation plants to stockpile 90 days of coal or nuclear fuel on site. As I reported earlier:

In October, Secretary of Energy Rick Perry urged the Federal Energy Regulatory Commission to pour funds into conventional coal-fired and nuclear electricity generation plants. Perry argued the government needs to prop up these money losers in order to stabilize the power grid. As R Street Institute energy analyst William Murray points out, this amounts to a "creative" ploy "to fulfill promises made directly by President Donald Trump to coal mine owners during the election campaign, even at the cost of free markets—a supposed core belief among Republicans and conservatives of all stripes."

The requirement was artfully framed as a measure to increase power grid resilience, but it was really designed as a stealth subsidy to the coal industry. The five commissioners—four of them appointed by Trump—unanimously voted against the proposal.

This is an excellent example of an independent regulatory agency resisting political pressure, and it's good news for consumers, who now won't be charged extra for the unneeded fuel.

Disclosure: In the 1980s, I was employed as an economist for FERC. The experience turned my intellectual disdain for bureaucracy into white hot hatred.

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45 responses to “FERC Shuts Down Trump's Coal Cronyism

  1. Of course, the complete absence of FERC would have accomplished the same thing.

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  2. The experience turned my intellectual disdain for bureaucracy into white hot hatred.

    The army did the same for me, went in a milquetoast democrat, out a fiery libertarian.

    1. I always knew Bailey harbored white hatred.

    2. Working in public works construction is largely what did it for me.

    3. Growing up with the corrupt Vietnam War and watching NASA pivot 180 into make-work corruption after Apollo did it for me. Mostly I just became a firm believer in government incompetence as a practical matter; the ideology came later.

    4. Going into the 8th grade I wasn’t put into advanced placement with my friends because a teacher I had never had and knew nothing about me filled out the questionaire. After the principal explained this to my parents and me I was done with authority figures. I’ll never forget one of the questions was “How often do you see the child read” and his answer was 0. I literally did two things at that time, play sports and read.

    5. Going into the 8th grade I wasn’t put into advanced placement with my friends because a teacher I had never had and knew nothing about me filled out the questionaire. After the principal explained this to my parents and me I was done with authority figures. I’ll never forget one of the questions was “How often do you see the child read” and his answer was 0. I literally did two things at that time, play sports and read.

  3. The Federal Energy Regulatory Commission has rejected the Trump administration’s cronyist proposal to require electric power generation plants to stockpile 90 days of coal or nuclear fuel on site.

    Wait wait wait. Would this be the same “Trump The Great Deregulator” wanting to impose a new regulation on private businesses?

    1. Seems so. But his words have often been cronyistic and protectionist. The thing I wonder is why Energy is always such a special case.

      1. Sometimes you have to play some off vs. others. If we got a deregulator in by buying off an interest group, that seems like a small price to pay. & in this case, it looks like we didn’t even have to pay it!

  4. Okay so perhaps Mr. Bailey can put this straight for me then. What is the point of FERC then? And the NRC? And the Dept of Energy?

  5. Disclosure: In the 1980s, I was employed as an economist for FERC. The experience turned my intellectual disdain for bureaucracy into white hot hatred.

    Funny how that works. It was a very negative interaction with the coercive state, when I just happened to be reading Atlas Shrugged for the first time, which turned me away from wishy washy moderate into an anti-statist individualist.

    1. Just because you get a DUI or whatever doesn’t mean you need to throw your brain in the toilet.

  6. And can you tell I’m procrastinating at work?

    1. Can’t you just entertain yourself by mixing random chemicals and putting them in the microwave?

      1. ^^^
        *microwaves whole egg,rubbing alcohol, and pop rocks.

      2. I’m not allowed near the microwave section at Walmart anymore.

        1. You work at Walmart?

          1. Well, not any more! Not after the Great Walmart Microwave Incident of ’09.

            1. That was the exact moment that you can trace the rise of Amazon’s dominance.

  7. If “stablizing the energy grid” was a worthwhile and profitable goal, then I would think the energy producers would be stockpiling the 90 day or more supply no matter whether they were “required” to or not.

    1. A guy on the radio yesterday was saying that somewhere around 0.0007% of power outages result from a failure of fuel supply. So, yeah.

    2. Depending on operating forecasts and reliability of supply (mine + transport + local material handling) coal plants already keep substantial reserve stocks of fuel. I’m not sure about 90 days, but there are some big coal piles.

  8. “The requirement was artfully framed as a measure to increase power grid resilience, but it was really designed as a stealth subsidy to the coal industry.”

    Seems to me that it was only stealth to the agency. Trump campaigned in coal states on doing things like this, and he was rewarded with the presidency by carrying swing states with a lot of coal, like Pennsylvania and Ohio. This might suggest that the people who supported him in those states don’t see it as a subsidy to the coal industry as much as they see it as support for coal miners and communities that depend on coal mining.

    The Obama administration’s mercury rules were probably more of a stealth operation. They were justified as being about everything but an attempt to make it even harder for coal to compete because of global warming–but does anybody really believe that Obama’s mercury rules were something other than global warming?

    1. So just what is the difference between a subsidy and “support for workers and communities”?

      1. One of them is meant to pick a winner in the market.

        The other is meant to keep a campaign promise.

        It might seem like an insignificant distinction to you if you don’t live in a community that’s dependent on coal mining, but it makes a big difference to people who do.

        There’s another important difference between them that Trump’s critics don’t seem to grock.

        Time and time again, from the Paris accord and mercury rules to ObamaCare and The Iran nuclear deal, the central purpose of the Obama administration (and, indeed, all progressives) is to use the coercive power of government to force people to make sacrifices for what they see as the common good. In the case of mercury rules and the Paris accord, the purpose of the Obama administration was to force American coal miners, the communities that depend on coal mining, and American energy consumers to make sacrifices for the benefit polar bears, future generations, and people in the developing world–all against the coal miners’ will.

        There’s a legitimate difference between that and Trump sticking up for the interests of American coal miners–you see that difference, right?

          1. If you don’t see any difference between a president using his pen to force Americans to make sacrifices for other people and a president using his pen to try to help Americans (no matter how hamhanded), then you’re being willfully obtuse.

            Just because I oppose what the president is doing doesn’t mean I have to pretend it doesn’t make any sense or that it’s the same as what Obama was doing. I can see the differences between two different things even if I disagree with them both.

            . . . and that’s because I’m intellectually honest and not willfully obtuse.

      2. To an awful lot of people, there is a fundamental difference between interference that is meant to further the interests of America and Americans and interference that is meant to force average Americans to make sacrifices for other people.

        Progressivism is all about using the coercive power of government to force people to make sacrifices for the common good. Trump may be wrong about what’s really in the best interests of average Americans, but at least he’s working for their benefit rather than trying to force them to make sacrifices for other people.

        I can argue with Trump about what’s in our best interests.

        If I have to convince progressives that working in our own best interests isn’t racist, selfish, or otherwise deplorable before we can even start talking about what our best interests are, then that’s why progressives are a lost cause–and that’s why for some half of the American people, they might as well be invaders from outer space.

        1. Excellent writing and reasoning. Thank you.

  9. The five commissioners?four of them appointed by Trump?unanimously voted against the proposal.

    And buried here, in a nutshell (like a squirrel!), is the core of one big reason why many liberals/conservatives/whathaveyou have been so much more patient and positive on Trump than their hardcore anti-Trump counterparts can make sense of. Whatever his rhetoric while waving around his straw hat and cane, his appointments have had a striking disconnect from that and have been nearly uniformly outstanding. And, given that chief bureaucrat is one of his three jobs (none of which are legislator), I’d say that’s pretty fucking important.
    .
    I’m the last one to assume he will, but if he keeps it up for three years, he’ll be the best president in nearly a century.

    1. His appointments have been closer to uniformly deep state swamp creatures.

      1. I gushed a bit too much there. “Uniformly outstanding,” no. But Gorsuch, other judges, Pai, these guys, Devos, the work being done at the EPA and Interior; all the other regulation cuts the press has been going on about; I am underwhelmed by Gottlieb but others seem to have a lot of faith in him…it’s not true liberal stuff here, but it’s pretty damn good compared to the overall trend. Compared to what we’d like ideally it’s not even close to a swamp drain of course–and, like I said, I’m not even particularly optimistic for the future; I just refuse to begrudge him the actual, present facts. And indeed, you don’t jeer half a loaf or even croutons when everyone else has been specifically dedicated to starving you. I’ve learned to gain some perspective.

    2. Seriously, you’re a joke right?

  10. Pretty fucking audacious to make which fuel technology you prefer a partisan issue.

    1. Oh c’mon Tony. Even you have to admit that “coal = bad, solar = good” was a real thing during the Obama years.

      1. But that’s actually true.

    2. Too late for canklelicking, dipshit.

  11. “…and it’s good news for consumers, who now won’t be charged extra for the unneeded fuel.”

    Plus the warehousing costs; all good.

  12. This is an excellent example of an independent regulatory agency resisting political pressure

    Which is why our Founding Fathers, in their infinite wisdom, enshrined in the Constitution the principle of independent regulatory agencies unanswerable to the electorate running the bureaucratic state rather than those craven gutter rats in the other three – lesser – branches of government. Can you imagine the mess we’d have if the legislative, executive and judicial powers of the federal government were separated into just three co-equal branches of government rather than all being delegated to one single agency, guided by non-partisan benevolence and wisdom and scientific principles of public administration?

    1. Which is to say the subhed How an independent regulatory agency is supposed to work kind of overlooks the fact that they’re not supposed to “work” at all, they’re an unconstitutional abomination. Kind of like marveling at the efficiency of the Nazis at exterminating Jews without acknowledging that exterminating Jews isn’t really something you want to see efficiency in.

      1. You’re starting to sound like a libertarian.

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