Trump’s plan to bail out failing fossil fuels with taxpayer subsidies is perverse | Dana Nuccitelli

Coal can no longer compete in the free market, so the Trump administration wants to prop it up with taxpayer subsidies

The conservative philosophy of allowing an unregulated free market to operate unfettered often seems to fall by the wayside when the Republican Party’s industry allies are failing to compete in the marketplace. Trump’s Energy Secretary Rick Perry recently provided a stark example of this philosophical flexibility when he proposed to effectively pull the failing coal industry out of the marketplace and instead prop it up with taxpayer-funded subsidies.

Most of the common metrics for grid reliability suggest that the grid is in good shape despite the retirement of many baseload power plants … The power system is more reliable today due to better planning, market discipline, and better operating rules and standards

However, [Perry’s proposal] conveniently fails to mention that nearly 14 gigawatts (GW) of coal capacity was forced offline during the Polar Vortex, roughly 25 percent of all coal capacity in [the region]. 1.4 GW of nuclear was forced offline as well. Most of these generator outages were due to temperatures below the operating limit of power plant equipment ... Additional coal capacity was unavailable due to frozen coal piles.

At the price of US per barrel, we find that a bit more than half (53%) of subsidy value (in net present value terms) goes to projects that would have proceeded anyway. That fraction rises to nearly all (98%) of subsidy value at US0 per barrel. As others have found, regardless of the oil price, the majority of taxpayer resources provided to the industry end up as company profits.

by Congress’ own Joint Committee on Taxation analysis (post-Trump), the tax subsidies to oil and gas outweigh the tax subsidies for all charitable giving to health and education.

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