Economy

Trump wants a coal comeback. It probably won’t happen.

Coal miners wave signs as e Donald Trump speaks during a rally in Charleston, W.Va. Trump's election could signal the end of many of President Barack Obama's signature environmental initiatives. Trump has said he loathes regulation and wants to use more coal and expand offshore drilling and hydraulic fracturing. May 5, 2016.
Coal miners wave signs as e Donald Trump speaks during a rally in Charleston, W.Va. Trump's election could signal the end of many of President Barack Obama's signature environmental initiatives. Trump has said he loathes regulation and wants to use more coal and expand offshore drilling and hydraulic fracturing. May 5, 2016. AP

Donald Trump campaigned on a promise to bring back jobs to struggling coal communities, and laid-off miners contributed to his presidential victory.

But the reality is more complicated.

Trump can roll back regulations developed by the Obama administration to curb carbon dioxide emissions from coal-fired power plants and to protect streams from the impacts of coal mining.

He’ll be able to appoint regulators who are more friendly to the industry, and he’ll have a Republican Congress more than willing to enact laws that are favorable to coal.

He can’t, however, easily change the market forces that have contributed to coal’s collapse, primarily competition from cheaper natural gas produced by hydraulic fracturing. While Trump supports coal, he also supports its chief competitor.

Plus, Trump’s protectionist talk on trade could potentially hurt the biggest bright spot for the coal industry: exports of metallurgical coal, the kind that’s used to make steel.

“I don’t think there’s a lot of coal miners who’ve been laid off who dusted off their resume on Wednesday morning,” said Nick Carter, interim president of the Kentucky Coal Association.

Some coal executives were elated at Trump’s election on Tuesday. Robert Murray, president and CEO of Ohio-based Murray Energy, called it “a great day for America.”

“This is also a great day for coal miners and their families, and for all Americans who depend on reliable, low cost electricity,” he said in a statement, “which coal provides.”

But some utility executives have already begun the shift away from coal. In September, Greg Pauley, the president and operating chief of Kentucky Power, told an energy conference that coal isn’t coming back “no matter who is elected in November.”

Pauley cited the lower price of natural gas and renewables as the driving force.

“While coal will remain a strong part of our energy mix,” Pauley said, “our new generation facilities will not be coal.”

Recent numbers for the coal industry have not been encouraging.

Total domestic consumption fell 13 percent in 2015 from 2014, to 798 million tons, the lowest level in three decades, according to the U.S. Energy Information Administration.

Coal employment fell 12 percent in 2015 to 66,000 workers, the lowest number since the government began tracking coal mining employment data in 1978.

A decade ago, coal produced 50 percent of the country’s electricity. But this year, for the first time, natural gas is expected to edge out coal as the nation’s primary energy source.

As long as natural gas prices stay low enough, Carter said, coal may not always come out the winner.

“We are more than willing to compete against the gas business,” he said. “And they may beat us.”

With a Republican president and Congress, coal producers are likely to get a big-ticket item on their wish list: dismantling President Barack Obama’s Clean Power Plan.

The plan would require a one-third reduction in carbon dioxide emissions by 2030, and the fastest way to achieve that would be to close existing coal-fired power plants and not build new ones.

More than two dozen states, all significant producers or consumers of coal, have sued the Environmental Protection Agency to stop the plan. The Supreme Court may ultimately decide the case, and Trump is likely to appoint a conservative judge who could vote to strike it down.

Patrick McGinley, a law professor at West Virginia University, said a Trump administration could nibble away at other regulations the industry considers costly.

It could withdraw Obama’s Stream Protection Rule and, with the help of Congress, loosen mine safety rules and regulations governing the disposal of coal combustion waste.

But McGinley said the cumulative impact of such changes would be limited, and coalfield voters could turn on Trump and Republican lawmakers if they don’t see an improvement.

“It’s highly unlikely that any of those moves would result in a substantial increase in mining jobs in America’s coalfields,” McGinley said. “If they don’t deliver, people in dire straits are going to be asking why.”

Carter said a better economy has the potential to turn the coal industry’s fortunes around. A 3 percent growth rate over a several year period instead of the current 1 or 2 percent would stimulate demand for electricity.

“We’ll take the same slice of a bigger pie every day because that means everybody is doing better,” he said.

Carter added that the coming demand for metallurgical coal is higher than it’s been in a decade – good news especially for Central Appalachia, where most of it is produced.

“We’re doing better than I would have anticipated,” he said.

But Carter said he’s a little concerned that Trump’s approach to trade could hinder the ability to export metallurgical coal, particularly to China.

Though he doesn’t think that’s the intent, if it did happen, it would hit Appalachia first.

“It would hurt the area that has been hurt the worst at a time it doesn’t need any more bad news,” Carter said.

Curtis Tate: 202-383-6018, @tatecurtis

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