Which Side Are You On?

Is $20,000 a lot of money to you? 

It isn’t a lot to the Port of Los Angeles, which handles something on the order of $300 billion in cargo a year. It isn’t a lot to the union bosses who run the place, their coffers being generously topped off with mandatory dues. 

But it is a lot of money to at least one of the port’s customers. 

In April, an undeclared strike shut down the ports of Los Angeles and Long Beach. The union says workers didn’t show up because they were paying rapt attention to a union-leadership vote and then ditched work for Easter. Yeah. As trade journal American Shipper put it, “Labor action at West Coast ports does not have a history of being explicitly confirmed; rather, it takes the form of passive-aggressive behavior that escalates with increasingly implausible deniability.”

The labor disruption was particularly hard on agricultural exporters, whose product cannot just sit indefinitely. In one case, a farm exporter had a small fleet of trucks turned away from the port, with the cost of rerouting the goods adding up to some $20,000—enough to turn what would have been a profitable international sale into a money-losing deal. “This highly damaging experience is being repeated for thousands of containers,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, told American Shipper.

The trouble at the ports is bad news for California’s economy, though it is not entirely unwelcome news for competing ports that are winning new business because of California’s troubles. The Port of Los Angeles was until recently the nation’s busiest port, but last December it was surpassed by the Port of New York and New Jersey, because shippers have been rerouting cargo to New York, New Orleans, Savannah, and other East Coast and Gulf Coast destinations. Some 20,000 dockworkers have been working without a contract since the summer. 

The Biden administration is not about to undertake labor reforms that would weaken unions’ stranglehold over the Port of Los Angeles. President Joe Biden did make a big show out of signing an “infrastructure” bill that was mostly a climate-change bill. But our ports face real infrastructure challenges: roads and bridges that need fixing, waterways that need dredging, and more. You’d think an infrastructure bill would have taken care of much of that. 

You’d be wrong. 

As the American Association of Port Authorities shows, much of the reporting on the Infrastructure Investment and Jobs Act has “overrepresented the amount of funding in this bill for ports.” Out of the $1.2 trillion package, only $6.6 billion (spread out over five years) was put into port-specific programs—that’s one-half of 1 percent, and it is, for comparison, less money than the federal government plans to spend reimbursing local school districts for Wi-Fi routers. Worse, much of the money made available to ports won’t go to helping move cargo through them more efficiently but instead on tangential environmental priorities such as reducing truck emissions. That is a worthy goal, but consider the fact that only 9 percent of the roads connecting U.S. ports to other transportation modes—an essential part of getting cargo from ships to its destination—are in “good” or “very good” condition, meaning that 91 percent of that pavement isn’t in good shape. Some of it is in very bad shape. Poorly maintained roads slow down cargo and are hard on trucks, and they also contribute to traffic congestion—which adds to air pollution. 

Enormous sums of money meant for port infrastructure are being diverted into things like wind power and electric vehicles. In Jacksonville, Florida, the federal priority is “transitioning the port and local maritime industry to zero-emission technologies,” according to the Maritime Administration. What that practically means is replacing diesel forklifts and tractors with battery-powered ones and building charging stations. In Massachusetts, the priority is the Salem Wind Port Project, putting millions into creating a “marshaling area for offshore wind energy projects.” Go down the list of where money is actually going, and you’ll see endless examples of this. Rather than micromanaging what model of forklift is being used at any given port, the federal government should be prioritizing its actual responsibilities, including maintaining the federal highways and waterways under its authority. 

Transportation is one big piece of the infrastructure challenge for the U.S. economy. The other is energy. Unlike transportation, which relies on government-owned roads and government-administered waterways, energy infrastructure is mostly privately owned. But that hasn’t saved it from the same kinds of problems that are hobbling transportation improvements. 

Environmental groups have categorically opposed almost every piece of energy infrastructure oriented toward anything other than wind or solar for decades, and the Biden administration has in its time done much to oblige, most dramatically by killing the Keystone XL pipeline. Even as the administration broke with environmental activists on the Willow project (a CoconoPhillips-led oil-drilling effort in Alaska) it has taken a giveth-and-taketh-away attitude toward oil and gas, building an administrative “firewall” against future oil leases in Alaska. 

The administration loves infrastructure, as long as it isn’t something genuinely useful, like a pipeline. 

About those pipelines: Few Americans appreciate just how vulnerable our fuel distribution network is. In 2017, Dallas drivers got an unwelcome taste of the 1970s when local gas stations went dry and long lines formed at others thanks to a storm hundreds of miles away that shut down the Colonial pipeline, cutting Dallas drivers off from the Houston-area refineries that make their gasoline. Somewhere, the ghost of J. R. Ewing was having a good laugh. In 2021, there were shortages of gasoline and jet fuel on the East Coast when hackers attacked the same pipeline system. And it isn’t just fuel: In December, tens of thousands of people in North Carolina were left without electricity after a couple of men with rifles attacked a power substation—and the fact that subsequent attacks in the Pacific Northwest did not produce similar results was more a matter of good luck than good preparation. 

The energy sector isn’t waiting on federal infrastructure subsidies to make big investments—firms across that industry are ready to spend their own money on necessary work that will have the welcome effect of creating a lot of new job opportunities for American workers. But they can’t—either the government stops them outright, as with Biden and Keystone XL, or endless activist-led lawsuits and reviews make projects economically unviable. 

That’s why Westinghouse is building a new nuclear power plant in Poland instead of Texas, Florida, or California. The Biden administration spent months complaining about high gasoline prices, but U.S. refining capacity has been dropping in recent years while refineries are booming in Asia and the Middle East. U.S. producers could be doing a lot more to help our European allies replace Russian natural gas—doing well while doing good—but U.S. gas liquefaction facilities are already operating at or near capacity. While there is a lot of investment happening there right now, that new capacity won’t come fully online for some time, and, when it does, it will rely on those troubled ports to get where it is going. Expanding U.S. exports of liquefied natural gas (LNG) will require big investments in port infrastructure—and the environmentalists who so often have the Biden administration’s ear bitterly oppose these. 

And that’s the Biden administration’s double-bind: The country needs a great deal of real investment in energy and transportation, two critical areas that can be mutually reinforcing but that also impose their vulnerabilities on one another. On the other side, we have union bosses willing to hold key transit hubs hostage and utopian environmentalists who believe that the economy can be run on happy thoughts and good intentions—two interest groups whose economic interests may not always match up exactly but who share a political vehicle.  

Our progressive friends are not wrong to insist that environmental and labor interests be taken into account—intelligent policymaking involves tradeoffs and balancing legitimate interests. They are wrong to give union bosses and green ideologues veto power over energy and infrastructure, which is what they in effect purport to do. The question should not be whether we are going to build pipelines to ensure that Americans have reliable supplies of gasoline or whether we are going to encourage the development of LNG-export facilities at our ports—the question should be how to go about doing these things in an environmentally responsible way. The most puritanical environmentalists insist that there is no environmentally responsible way to do this—their position is one of ultimatum, spurning compromise. Rather than deal with political reality, the Biden administration blithely pretends that electric-vehicle charging stations are in some meaningful way investments in the ports at the heart of our still-fragile supply chains—and, because Joe Biden offers the freshest political thinking of the 1930s, his administration is utterly disinclined to do anything about the labor disruptions besetting West Coast ports. 

A soybean exporter losing $20,000 because of an undeclared strike may not seem like a big deal to you, but businesses—and economies—are built one transaction at a time. 

At some point, the administration is going to have to answer the question from the old coal-miners’ song: “Which side are you on?”