Bad Thinking About Good Neighbors

Rep. Austin Knudsen, a bright light in the House Republican caucus, is in high dudgeon, and no wonder! According to Knudsen, the state of Washington is conducting an environmental review of a proposed Pacific Coast coal shipping port that boils down to nothing less than “a blatant attempt to undercut coal mining in Montana and Wyoming…” The “heart of this issue,” Knudsen says, “is whether one state [Washington] can dictate what is produced in another state [Montana].

If you haven’t heard about this nefarious effort to strangle Montana coal production, don’t be surprised. Knudsen has to go way out of his way to put this construction on what Washington regulators are actually doing, which is, simply enough, assessing the environmental impacts of building the port and hauling a bunch of coal to it. And being good neighbors, apparently, they are assessing those environmental impacts not just on Washington, but on Montana and Idaho. Anywhere, in short, where building the port is going to mean a lot more coal trains rumbling through the countryside.

While we usually applaud this kind of neighborliness, Knudsen is upset about it because he apparently concludes (without explanation) that an expansive review will necessarily lead to the port not being approved, or being delayed so long that the investors will give up on the project. Hence the “blatant attempt to undercut coal mining in Montana.” So confident is he in this line of thought that he doesn’t even acknowledge that transporting more coal by rail, the inevitable result of building a new port, could have environmental impacts in Montana worthy of consideration by Washington regulators. No, for some unknown reason, the Washington folks want to do Montana coal in, nothing’s going to stop them, and that is the sum total of what’s going on here.

Knudsen implies that any decision not to build the port is tantamount to Washington improperly dictating to Montana what it can and cannot produce. That being so apparently means that Washington must allow the port to be built. Why that doesn’t represent Montana dictating to Washington what it must produce, which presumably is just as improper as the other way around, Knudsen leaves unexplained.

On one matter, Knudsen may have a point, however garbled. That is that in deciding whether or not to engage in any particular activity, we all – households, businesses, regulators, everyone - have to strike a reasonable balance between the environmental costs and economic benefits that the activity entails. But the way Knudsen says we should assess those economic benefits is all wrong. It’s an important point, and I’ll comment on it more in a future post.