Donald Trump vowed to revive the coal industry but figures show its future is as bleak as ever
Long-term growth and hiring prospects remain weak despite administration's policy changes to make energy sector more competitive at expense of environmental concerns
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.A year after Donald Trump was elected President on a promise to revive the ailing US coal industry, the sector’s long-term prospects for growth and hiring remain as bleak as ever.
A Reuters review of mining data shows an industry that has seen only modest gains in jobs and production this year - much of it from a temporary up-tick in foreign demand for US coal rather than presidential policy changes.
US utilities are shutting coal-fired power plants at a rapid pace and shifting to cheap natural gas, along with wind and solar power. And domestic demand makes up about 90 percent of the market for US coal.
”We’re not planning to build any additional coal facilities,“ said Melissa McHenry, a spokeswoman for American Electric Power (AEP), one of the largest US utilities. “The future for coal is dictated by economics… and you can’t make those kinds of investments based on one administration’s politics.”
Coal plants now make up 47 percent of AEP’s capacity for power generation, a figure it plans to shrink to 33 percent by 2030.
The situation highlights the limitations of presidential policy on major industries and global economic trends. As some energy experts have said all along, the forces that will make or break mining are well beyond the powers of the Oval Office.
A White House official did not respond to a request for comment.
Trump has likely done all he can do to help the industry, said Luke Popovich, a spokesman for the National Mining Association, which represents major US coal companies.
“The government is no longer against us,“ he said. ”We now only have market forces to contend with.”
Trump has taken action on many promises he made to coal interests in states that helped him win the election.
The President started the process of killing former President Barack Obama’s Clean Power Plan, meant to reduce carbon emissions from power plants; ended an Obama-era moratorium on coal leasing on federal lands; ditched limits on dumping coal waste into streams; and started withdrawing the United States from the Paris Climate Agreement.
Now Trump’s Energy Secretary, Rick Perry, is attempting to push a rule through the independent Federal Energy Regulatory Commission that would subsidise power plants that store at least a 90-day supply of coal on site. The goal is to extend the life of some coal burning power plants, a move Perry says will make the electric grid more reliable.
While the full impact of Trump’s coal policy could take years to understand, the changes so far are unlikely to boost domestic demand, energy analysts and utility officials said.
Trump has cast the coal industry as a victim of burdensome regulation.
The industry has lost more than 40 percent of its work force in less than a decade and seen production drop to its lowest levels since 1978. Its share of the power market has fallen to less than a third from about half in 2003.
“We’re going to bring the coal industry back 100 percent,” Trump said at a rally in Virginia in August of 2016.
So far, progress has been limited.
US coal production is on track to rise more than 8 percent in 2017 over the previous year, to 790 million tonnes, according to the Energy Information Administration (EIA). But 2018 output is expected to decline.
The number of coal miners has also risen slightly to 51,900 in October, up about 2,200 since November 2016 - but down about 70 percent from a 1985 peak, according to the Labour Department.
On 1 November, Trump cited the modest production increases in a Tweet, saying, “It is finally happening for our great clean coal miners!”
But these increases are largely attributable to demand for US coal from Asian steel mills after temporary outages from their usual suppliers in Australia, according to James Stevenson, a coal analyst at IHS Markit.
During the first six months of 2017, Asian countries took in 7.5 million short tonnes of US coal, up 97 percent over the same period in 2016, according to the EIA.
That demand will soon fade, Stevenson said.
“We are not going to get a repeat of 2017,” he said of the spike in exports.
Forecasts from utilities and the US government reveal little reason for hope of a sustained coal rebound.
Utilities are expected to shut down more than 13,600 megawatts of coal plant capacity in 2018. That follows a loss of nearly 8,000 MW this year and 13,000 MW in 2016, according to EIA and Thomson Reuters data.
By 2025, coal-fired power plant capacity will dip to 226,380 MW, down about 30 percent from 2011, according to EIA.
Three Texas coal plants owned by Vistra Energy subsidiary Luminant are among the latest to close, bringing the number of plants that shut, or plan to, to 265 since 2010 - a figure higher than the 258 plants that remain, according to the Sierra Club, which has campaigned against coal.
Vistra said the closures were forced by lower prices for natural gas and renewable power - and not by environmental regulations.
Duke Energy, one of the country’s largest utilities, has shut down more than 5,400 MW of coal capacity since 2011 and plans to shed another 2,000 MW by 2024.
Over the next decade, Duke plans to invest $11 billion in new natural gas and renewable power - and nothing in new coal-fired generation, said spokesman Rick Rhodes.
A 2 November report by the Federal Reserve Bank of St. Louis - which has two of the largest coal producers in its district, Peabody Energy and Arch Coal - said coal-fired power plants “may eventually become obsolete.”
Coal companies believe they can survive despite the troubling market outlook.
Peabody expects a “modest number” of coal power plant retirements in the coming years, with some of that lost capacity shifting to remaining plants that will increase output, spokesman Vic Svec said. Arch spokeswoman Logan Bonacorsi offered a similar forecast.
Robert Murray, the chief executive of privately-held Murray Energy - one of America’s biggest underground miners - said Trump could do more for the industry. The administration, Murray said, should end tax breaks for wind and solar power and reverse an EPA finding that carbon emissions endanger human health.
But Trump’s tax bill last week preserved most solar incentives, which have bi-partisan backing. And the EPA has so far steered clear of the so-called “endangerment finding” on emissions that is the basis of many fossil-fuel regulations, given the breadth of scientific evidence that would be needed to reverse it.
Murray Energy, meanwhile, announced on 31 October it will buy a 30.5 percent stake in a coal-mining partnership in Utah called Canyon Consolidated Resources.
The deal might help the companies cut costs, but it’s unlikely to help workers: Murray said about 200 of 1,000 jobs in Utah could be lost.
Reuters
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments