As usual, the bureaucracy comes after the market

Liberal Yank has asked for an opinion on this piece, where Obama has delayed the granting of new coal leases on Federal land out west:

Then last year, mining company Alpha Natural Resources filed for Chapter 11 bankruptcy. Industry giant Arch Coal Inc. followed in early January. Each company has two major mines in Wyoming. Arch’s Black Thunder mine ranks among the largest in the world.

Less than a week after the Arch bankruptcy came the Obama administration moratorium on new coal lease sales.

It targets an Interior Department program that’s been criticized for decades by members of Congress, for allowing mining companies to profit off a taxpayer-owned resource they lease for just pennies per ton through a largely uncompetitive bidding process.

Well, yes, the market seems to be trying to tell people something there. If everyone’s going bust despite only paying pennies per tonne then those resources, in the ground as they are, aren’t in fact worth even pennies per tonne, are they? But more interesting is this:

As it is, the coal companies themselves have been unwilling to lease any new coal in the Powder River Basin for the past three years, due largely to the uncertain market for the fuel.

“The damage has already done by current market conditions and a decision to regulate carbon dioxide,” said Robert Godby, who directs the Center For Energy Economics and Public Policy at the University of Wyoming.

The leasing moratorium, he said, represents “more nails in the coffin. I don’t want to say they’re already dead, but you get the idea.”

The market has (for which read, cheap fracked gas) fucked the business anyway. At which point the correct way to read this is as follows. Obama gets to throw a bone to the environmentalists at absolutely no cost whatsoever to anyone else. Why wouldn’t a politician do that?

The idiots, environmentalists, aren’t bright enough to realise that the reg will make no difference whatsoever and will think they have won something. Everyone else isn’t going to give a shit.

5 thoughts on “As usual, the bureaucracy comes after the market”

  1. Shutting the stable door after the horse has bolted is an empty gesture, which is nothing more than a politician’s stock in trade.

  2. The other section of the market was China. With demand dropping the export market is now gone as well.

    Assuming the blame Obama crowd is part of the idiots then you read it the same way I did.

  3. Yes, but that makes it iSomeone Else’s Problem which makes it even more valuable a solution to a politican as he gets to screw someone else over

  4. Surely refusing additional leases is a small measure to support prices?

    Look at it from his perspective. It can be sold, politically, as both an environmental measure and a job support programme. That’s what I call a win-win-win situation!

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