November 26, 2020

Editorial: A better idea for Virginia’s controversial coal tax credits | Editorial

The cold-eyed accountants for the General Assembly’s auditing arm made headlines recently when they ran the numbers on the state’s coal tax credit and concluded that it actually costs the state more jobs than it saves.

This is good news for coal-hating Democrats who have tried for years now to get rid of the program and bad news for Republicans who represent the counties that produce coal.

At least that’s the conventional reading of the Joint Legislative Audit and Review Commission’s report. Today we propose a more unconventional reading under which coal country Republicans should embrace that finding and use it to their region’s advantage.

Before we get to that, let’s review some fascinating big-picture facts that the auditors assembled. First, Virginia coal production peaked in 1990 and has declined ever since. It’s now about one-third of what it was then. That means it hasn’t mattered which party controls either the federal or state governments — coal didn’t decline under Democrats and rebound under Republicans, it’s declined under both. That’s because market forces, not political ideology, govern the coal market. Other forms of energy have simply become cheaper. We can see this most clearly in Virginia’s own energy production. In 2001, 51% of Virginia’s energy came from coal, 6% from natural gas. By 2018, 53% came from natural gas and just 10% from coal. Environmentalists don’t like the rise of natural gas because it’s also a fossil fuel (they’d prefer renewables) but natural gas has served to wage its own “war on coal.” Finally, there’s this: Virginia has just three coal-fired electric plants left, one of which will close in 2024, another in 2025. That will leave just the Virginia City plant in Wise County, which burns a mix of coal, coal waste and biomass.

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