Trump might 'dig' coal but does coronavirus spell the end for the industry?

The latest report from the US Energy Information Administration forecasts that more electricity will come from renewables than coal for the first time in 2020

President Trump has made no secret of his love for “beautiful clean coal” but the industry is in steep decline, according to new federal figures, with renewables on track to produce more electricity in the US for the first time ever this year.

In April 2020, the coal industry shed 6,000 jobs, a drop of 12.0% in one month, according to the Bureau of Labor Statistics (BLS). The entire US coal industry now employs 43,800 workers, around a tenth of the number of people who work at McDonald’s.

The May 2020 report from the federal Energy Information Administration (EIA) revealed that declines have accelerated, spurred by the coronavirus pandemic and competition from cheap natural gas.

The EIA report forecast that US coal consumption will decrease by 23% in 2020. EIA had projected a drop of 11% at the beginning of the year.

Moody’s credit rating agency’s outlook is even gloomier. Ben Nelson, vice president and coal industry analyst at Moody’s, told The Independent they were expecting a more than 25% decline in coal consumption.

“We have not seen the full magnitude of what the coronavirus pandemic means for thermal coal,” he said.

Job losses in the US coal industry since the beginning of 2020 (Bureau of Labor Statistics ) (Bureau of Labor Statistics)

The Institute for Energy Economics and Financial Analysis (IEEFA) predicted coal’s share of the market "potentially dropping to 10% or less by 2025”.

Mary Anne Hitt, national director of campaigns at The Sierra Club, told The Independent: “Coal is now the most expensive form of electricity on the market and in large parts of the United States it was already under a lot of pressure. The Covid-19 crisis has just increased the pressure on coal.”

The drop in coal consumption has impacted US emissions of carbon dioxide, the greenhouse gas driving climate change. EIA reported that energy-related CO2 emissions will decrease by 11% in 2020.

Mr Trump made big promises to coal workers during the last presidential election campaign. At a rally in Charleston, West Virginia in May 2016, he stood in front of a crowd of miners holding signs that read "Trump Digs Coal" and vowed to reopen mines and put employees back to work across the country.

In May 2018, he tweeted: “America is blessed with extraordinary energy abundance, including more than 250 years worth of beautiful clean coal. We have ended the war on coal, and will continue to work to promote American energy dominance!”

The reality has been starkly different. The loss of coal mining jobs in April is the largest monthly percentage fall in 35 years, BLS reported.

In the past five years, six of the top seven US coal companies have filed for Chapter 11 bankruptcy, AP reported.

Trillions of dollars are being divested from the fossil fuel industry with the youth-driven climate movement urging institutions to act more swiftly to limit global warming to the ambitious 1.5C set out by the Paris Climate Agreement.

America’s Power, lobbyists for the coal industry, did not immediately respond to messages from The Independent.

In a letter to the WSJ last month, CEO Michelle Bloodworth argued that coal was not “dead” and that without subsidies, “new wind and solar are at least 60 percent more expensive on a levelized cost basis than existing coal-based power plants”.

US coal mining has been deemed an essential business during the pandemic. But safety concerns have led some mines to make changes to operations, the AP reported.

In Powder River Basin, the country’s largest coal-producing region spread across Wyoming and Montana, companies are staggering shifts.

Job losses are expected to be more severe in eastern states as smaller underground mines close down, Mr Nelson says.

Mr Nelson said: “If you're east of the Mississippi and you look at what's hurting coal demand, it's natural gas. Even west of the Mississippi, it's natural gas.”

Three coal mining companies linked to Trump officials received a total of $28m in small business aid from the government during the pandemic, The Guardian reported.

The coal industry not only enjoys vocal support from Mr Trump but from some of the president's allies, despite costing American households more and having hazardous effects on public health, Ms Hitt says.

“In states that have longstanding ties to the coal industry like Kentucky, the home of Mitch McConnell, they have friends in extremely high places,” Ms Hitt said. “[The industry] is still running because of the political support it enjoys and which means people are paying higher electric bills to keep those coal plants operating.

“That is a reality but there is support of above 80% for renewable energy all across the country.”

EIA projects that the US will get more electricity this year from renewables than from coal. Although the pandemic will have an impact,“EIA expects renewable energy to be the fastest-growing source of electricity generation in 2020".

Earlier this month, Coal Creek plant in North Dakota, which employs 260 workers, announced it will close by the end of 2022. The closure will have a knock-on effect on nearby Falkirk Mine, which supplies the coal and has 500 workers.

The operator, Great River Energy, intends to replace the plant with wind, solar and battery projects across Minnesota and neighbouring states over the coming years, according to the Rocky Mountain Institute (RMI).

RMI analysis found that retiring the coal-fired power plant will save consumers over $60m annually.

Although there is optimism in renewables, the dire coal projections means that the 6,000 job losses last month will likely not be the last.

Ms Hitt says: “We need to make sure that as we move away from coal that we are supporting workers and communities and not leaving folks behind.

“So far Trump has chosen to make empty promises about bringing coal back which is not happening. What we need instead is leadership around a fair transition.

“Whether [coal workers] become part of the clean-energy economy or other new opportunities, it should be a priority for the White House.”