Politics Fueling Washington State Coal Export Embargo
In his first press conference as Washington governor, Jay Inslee tipped his hand about his negative views on coal. Thus, it probably did not take many by surprise when his administration blocked a project to export coal mined in Montana and Wyoming from a Washington port to booming markets in Asia. The subsequent federal lawsuit challenging the state’s ruling and amicus briefs filed by allies of the plaintiffs make it clear that this case goes far beyond coal, having major ramifications for interstate and foreign commerce.
The overarching question is whether one state can hold other states hostage and override the Commerce Clause of the U.S. Constitution, which grants the federal government the right to regulate interstate and foreign trade. Governor Inslee and allies argue that because the coal from Montana and Wyoming will eventually be burned to generate energy, Washington is well within its rights to deny exports due to the environmental impact that it would have on those Asian markets thousands of miles away. Yet, the only way this logic works is via a willful suspension of reality, ignoring certain obvious facts.
The countries that want to buy the coal out of Washington’s terminal, supporting U.S. jobs in the process, are not doing so as a favor to us, but rather because they have unmet energy needs and believe that we have the best product. The fact that Washington chooses to create a coal embargo does not change these facts in any way; the countries will merely look to the next seller who can meet their demand for coal. The bottom line? They are going to purchase and consume coal anyway, regardless of what anyone in Washington or anywhere else wants.
In this respect, there is a strong case to be made that Governor Inslee and his allies are harming, not helping, the global environment with their anti-coal fervor. For example, Montana Attorney General Tim Fox points out in an op-ed that coal produced in the Powder River Basin in Montana and Wyoming is of exceptionally high quality, which leads to lower emissions when compared to coal produced by other countries like Indonesia, the world’s second-largest coal exporter. And although the U.S. has been steadily moving away from coal, for many Asian markets coal will remain critical to their energy mix for years to come: Coal is more affordable, reliable, and abundant than other sources of energy. It thus stands to reason that supplying these countries with cleaner-burning American coal is the best alternative.
Unfortuantely, this reality is one that Governor Inslee chooses to ignore. Mr. Inslee has been burnishing his “green” credentials since he took office, and the fact that he is now being touted as a potential contender in the 2020 presidential race is probably not a coincidence. All politicians, to some extent, have politically or ideologically driven agendas, and many understandably aspire to higher office. But when a governor uses that agenda to effectively enact policies for other states, serious constitutional questions arise.
Recognizing that Washington state is setting a very dangerous precedent, the states of Kansas, Montana, Nebraska, South Dakota, Utah, and Wyoming recently filed an amicus brief in support of the lawsuit filed by Lighthouse Resources, the company that owns the coal mines readied to export. The states argue, correctly, that “no single state can engage in a pattern of discrimination that results in control over any other state’s ability to engage in a lawful activity involving interstate or foreign commerce.”
This is precisely why the Constitution gives the federal government the right to regulate interstate commerce. Otherwise, states would have incentives to enact mercantilist agendas that suit their own political purposes. As Tim Fox’s points make clear, this issue is not just about coal exports, it is about whether states can “use geography and ideology to discriminate against another state’s commodities.”
Should Governor Inslee prevail, the real question is: What would come next? Could states retaliate by banning Washington apples and potatoes, crops where the state ranks first and second nationally in terms of production? Or what if Washington decreed that only organic produce, meat, or dairy products can be shipped from its ports?
These may seem like ludicrous scenarios, but coal is also a commodity just like these other products. The fact that the use of coal is a political issue that is in disfavor with politicians in Washington should not factor into the decision-making process. To allow any one state to dictate economic policy to another goes against the very fabric of our system of government and the spirit of free enterprise. The courts should see this for what it is, an egregious infringement of the Commerce Clause, and overrule Washington's decision.
Demetrios Karoutsos is a political and public affairs strategist.