Musk and Murray: The Personification of the Clash Between the Old and New Economies
A bit of a war broke out this week between the most high-profile symbols of the new and old economies: Elon Musk and Robert Murray. The former, of course, is the chair of Tesla while the latter is the chair of Murray Energy, a coal company.
It started during a CNBC interview in which Murray said “Tesla is a fraud,” with the inference being that it has been criticized for the level of public subsidies it is getting and the ostensible public adoration it is receiving for its technological advances and job creation. The coal sector, as we all know, has been beaten down and is hanging on by a thread, having lost a substantial portion of its capitalization — something that Murray says is a result of “natural gas and Democrats.”
Tesla, he notes, has taken in $2 billion in subsidies and has not yet “made a penny in cash flow.” He then went to tell CNBC, which he has also told this reporter, that closing down coal plants in the United States will not have any effect on climate change. For that to be possible, it would need to be a global effort, he maintains.
The contrast couldn’t be greater. Murray — for whom this reporter has a high personal opinion — is of the old school: America was founded on basic principles and basic fossil fuels, including coal that has helped the United States achieve greatness. Global warming, he says, is really “global goofiness.”
Murray, who is in his mid seventies, is in Donald Trump’s inner energy circle. He has advised the Republican nominee that the way forward — to give coal back its cache — is to undo the host of environmental regulations that have been layered on since 2008. And, he says it is to allow natural gas exports from the United States to Europe and Japan, in the form of liquefied natural gas. That would pressure natural gas supplies and raise prices, making coal more attractive.
Trump has said he supports those positions. Rolling back such regulatory provisions, however, would be arduous task not just legislatively but also economically. That’s because the Democrats would oppose such a move and in the US Senate, they have enough lawmakers to keep up a filibuster. Economically, the utilities that buy coal have already begun their retiring their coal plants and building natural gas facilities. Those are 50 year investments.
Musk is from a different time and he represents a whole different scope on life, business and energy and environmental policy. Musk wants to drive the world — literally speaking — to zero-carbon levels. He wants his innovations to be copied and trumped — no pun here — so that the ideas spread and they become commercially rooted.
“The real fraud going on is (the) denial of climate science,” Musk tweeted. “As for ‘subsidies,’ Tesla gets pennies on the dollar (compared to) coal. How about we both go to zero?”
While renewable power and green energy technologies have received the most federal help during the Obama years, that has not historically been the case. For the 10 years prior to the current administration, the fossil fuels nabbed nearly double the subsidies of sustainable fuels, says the U.S. Energy Information Administration. For the record, total payouts for all energy forms equaled about $16.5 billion in 2007 and about $8.2 billion in 1997, it adds.
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