Counterflow: Anatomy of the New Cash for Clunkers

Oct 10, 2017

To Steve Huntoon, it's obvious where the recent Department of Energy proposed rule to the Federal Energy Regulatory Commission came from: Murray Energy.

By Steve Huntoon

Murray Energy Cash for Clunkers — Huntoon

Those of us who dwell in the economic/regulatory/public policy realm wonder about the origins of atrocious public policy. Where did it come from? Whose awful idea was this?

In the case of the Department of Energy’s Cash for Clunkers proposal, we pretty much know.

Robert Murray, owner of the coal mining company Murray Energy,^[1] was a large fundraiser for candidate Donald Trump during the campaign.^[2] After the election, Murray had a couple of meetings with President Trump at which the president promised Murray to do whatever he (and FirstEnergy) wanted Trump to do. I’m not making this up.^[3]

What Murray wanted was for Rick Perry, the secretary of energy, to declare an emergency on the electric grid so that FirstEnergy would keep buying a lot of coal from Murray’s coal mining company. Again, I’m not making this up.

Now it seems that pesky government lawyers figured out that the supposed basis for such an action, Section 202(c) of the Federal Power Act, couldn’t possibly justify that. “The White House and the Department of Energy are in agreement that the evidence does not warrant the use of this emergency action.”^[4]

At this point, a lot of us naively assumed it was safe to go back about our business. We were wrong.

Somebody came up with Plan B (or more like Plan 9) of using an even more obscure federal statute to tell FERC to have a rulemaking to subsidize the coal and nuclear clunkers in the country. So here we are.

It’s as simple and sad as that.