Politicians didn't help, but THIS is what's killing coal

Bruce Forster | Stone | Getty Images

Do you consider yourself to be a true free market capitalist/conservative? Or are you just a political partisan rooting for "your team" against "those other guys?"

Here's your chance to find out. Read this story about the bankruptcy at Arch Coal and gauge your reaction. Are you filled with anger that the environmentalists and the Obama Administration have put so much pressure on the coal industry that the second biggest U.S. coal miner has gone belly up? Or are you simply cognizant of the fact that while the politicians and the activists didn't help, it was the free market that really killed Arch Coal and is killing the coal industry in general?

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No one should be literally happy that an American company is filing for Chapter 11. Jobs will be lost and local economies will suffer. But the key is to be clear about what's responsible for the failure of coal and where to direct your energy, no pun intended.

Arch Coal and many of its peers are in their current state mostly because a better, cheaper, and cleaner product has come along in incredible abundance. That product is natural gas. And while many energy companies made the move to diversify or transition to natural gas and the fracking boom in general, Arch Coal and too many other coal companies did not. And while natural gas prices are currently way down because of massive supply, total use of that commodity is way up and should continue to grow for years to come. Coal? Not so much.

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The "War on Coal" from the Democrats in general and from environmentalists over the years certainly didn't make things any easier for the coal industry. And free market types should continue to decry any government attempts to hinder legitimate businesses. But there's simply no denying that coal would be in serious trouble right now even if Uncle Sam had left it alone. It's okay to blame President Obama for being hostile to coal, beef, surgeons, and the ongoing list of law-abiding American professionals and business people he seems to like to demonize. But blaming him for Arch Coal's bankruptcy is misguided when the free market has given us such a better product in such great numbers. Worse, there are even some politicians from both political parties who have pushed for government aid for the coal industry. You simply can't favor that blatant kind of corporate welfare and still call yourself a economic or even political conservative.

Coal is dying because of natural gas. If the free market is allowed to flourish properly the world will use it more and find new uses for it in the years to come. And if the free market is really allowed to flourish, a better replacement for natural gas will come along sooner rather than later. This is how it's supposed to work. Conservatives and Republicans need to remember that before they decide to use the Arch Coal demise as a political weapon.

Commentary by Jake Novak, supervising producer of "Power Lunch." Follow him on Twitter @jakejakeny.