Climate Deniers in Need of Econ 101

August 11, 2016

reaganswaroncoal

While we’re teaching climate deniers science, we should probably make Econ 101 required as well.

The average “free market” Republican demagoguing the ‘war on coal” issue wouldn’t know a free market if it bit him on the ass.

Bloomberg:

..the big decline in coal-mining employment actually occurred long before 2012.(above)

This wasn’t because coal mining itself was in decline — U.S. coal production hit its peak in 2008, at 1.17 trillion tons. It’s because it had shifted from the underground coal mines of Appalachia to the open pit mines of the West , and surface mining is a lot less labor-intensive. Wyoming passed West Virginia in the 1980s to become the biggest coal-producing state, and has mostly built on its lead since.

But even now, with more than three times West Virginia’s production, Wyoming’s mines employ many fewer people.

Wall Street Journal:

Mr. Trump, addressing a business-friendly audience at the Detroit Economic Club, painted a vision of a restored energy future. “We will put our coal miners and our steelworkers back to work, where they want to be,” Mr. Trump said.

In an outline accompanying the speech, Mr. Trump cited several targets: Environmental Protection Agency rules that cut carbon emissions from power plants, known as the Clean Power Plan; the EPA’s Waters of the U.S. rule, which brings more water bodies under federal protection; and an Interior Department moratorium on new coal leasing on federal lands.

But few finalized regulations have ever been successfully undone by a succeeding administration, Republican or Democratic. And those that did fall were far less politically charged than the Obama administration’s regulations at issue today.

“Trump could quickly repeal executive orders and agency guidance, but rescinding finished rules isn’t nearly as easy as he made it sound today,” said Kevin Book, managing director of ClearView Energy Partners, an energy analysis and research firm. “It can take agencies years to build administrative records to strike down or significantly modify a final rule.”

Repealing the Clean Power Plan and the Waters of the U.S. rules would require writing and legally justifying regulations to replace them, which could take nearly two years, judging by previous rule-making efforts.

A President Trump could choose not defend those regulations in court, where both face serious legal challenges. The water rule has been suspended by a federal judge while litigation plays out, and the Clean Power Plan, which the Supreme Court temporarily blocked earlier this year, is almost certain to face review at the high court.

CNBC:

But the campaign’s proposals and promises say little about the fundamental market forces that have sent oil prices spiraling in the last two years and reduced U.S. dependence on coal for its electricity needs.

For example, Trump’s campaign says he would “save the coal industry and other industries threatened by Hillary Clinton‘s extremist agenda.”

But the coal industry actually needs to be saved from another threat: natural gas. More specifically, it needs to be rescued from the natural gas boom made possible by horizontal drilling and hydraulic fracturing — “fracking” — the process of freeing oil and gas from underground shale rock formations by pummeling them with a mix of water, minerals, and chemicals.

The Energy Information Administration forecasts that 2016 will be the first year that cheaper natural gas-fired power generation will exceed coal generation in the United States. EIA says the demise of coal — and rise of natural gas — is “mainly a market-driven response to lower natural gas prices that have made natural gas generation more economically attractive.”

The EIA does, however, ascribe part of the effect of coal-fired power plant retirements to the EPA’s Mercury and Air Toxics Standards regulations.

Trump also says he would “lift restrictions on American energy, which will increase GDP annually by $100 billion, create 500,000 new jobs and increase wages by over $30 billion over the next seven years.”

Those figures, he said in his speech in Detroit, come from the Energy Research Institute, a nonprofit affiliated with the Koch Brothers, GOP backers whose Koch Industries are heavily invested in the energy industry, according to SourceWatch.

Vox:

Pearce summarizes the methodology in a piece in the Harvard Business Review:

Using data from the Bureau of Labor Statistics, we looked at all current coal industry positions (from engineers to mining and power plant operators to administrative workers), the skill sets required for each (for example, specific degrees and amount of work experience), and their respective average salaries. For each type of coal position, we determined the closest equivalent solar position and salary. For example, an operations engineer in the coal industry could retrain to be a manufacturing technician in solar and expect about a 10% salary increase. Similarly, explosive workers, ordinance handlers, and blasters in the coal industry could use their sophisticated safety experience and obtain additional training to become commercial solar technicians and earn about 11% more on average.

The results show that there are employment opportunities in solar for every level of education, with a living wage offered for even the lowest skilled jobs.

“In general,” Pearce writes, “we found that after retraining, technical workers would make more in the solar industry than previously in coal.”

So that seems good. “Managers and particularly executives would make less,” Pearce notes, but coal industry executives seem a rather inapt target of sympathy at the moment.

How much would it cost, in time and money, to retrain all those workers? Best-case scenario, $180 million. Worst-case, $1.8 billion. That amount “would allow the vast majority of U.S. coal workers to switch to solar-related positions.”

Obviously the exact investment of time and money will depend on the position and the individual. Coal workers can use the study’s appendices to find their best match in the solar industry.

How to fund all this?

Our paper evaluated four ways this training could be funded. First, coal workers could fund their own retraining. Second, coal companies could fund retraining of their own workers before laying them off. … It would only take 5% of coal company revenue from a single year to provide “scholarships” to their workers to fully pay for the retraining they would need to move to solar. A third way to fund would be individual states providing “coal to solar” transition programs. And the fourth option is the federal government could fund the retraining.

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4 Responses to “Climate Deniers in Need of Econ 101”

  1. Karl Wirth Says:

    For the ‘coal to solar’ transition programs – I would suggest branding them as ‘Darkness to Light’, or something to that effect!

  2. bbenfulton Says:

    I wonder if the jobs could be kept in West Virginia, or if they would have to move to bigger “sun-producing” states?

    • andrewfez Says:

      WV doesn’t have as much sun as even Virginia and definitely has less than NC and SC. That means longer return on investments and less personal incentive to go solar. They have cheap electricity there, secondary to the large amount of power they export to surrounding states – something like half the power they produce leaves the state. The journal Science did a study last year or so that said they have some good prospects for geothermal energy in parts of the state though.

  3. andrewfez Says:

    Something I’ve tried to drill into other WVian’s heads – the machines took all the jobs, not Obama.

    Baker Hughes rig counts are down from 800 some last year to 400 some this year. Oil appears to be a negative job growth industry for the moment.


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