Can coal make a comeback?
CHEYENNE, Wyo. — President Donald Trump says withdrawing from a global climate change agreement will boost the U.S. economy, but existing market forces have had far more of an effect on the fossil fuel industries than climate regulations.
For at least three years now, the coal industry has been reeling from growing competition from natural gas, wind and solar power. Environmental regulations enacted under President Barack Obama haven’t helped any, but they’ve played a much smaller role.
Most of those regulations haven’t even taken effect.
In March, Trump ordered a review of the Clean Power Plan, which seeks to reduce emissions from coal power plants, and the lifting of a moratorium on the sale of coal mining leases on federal lands.
So far, those moves have spurred a couple of relatively minor coal leases but no coal rush.
Here’s a look at the state of the U.S. coal industry:
AN INDUSTRY IN DECLINE
Experts say coal’s biggest problem isn’t climate change regulations but cheap and abundant natural gas. Gas prices dropped as advances in drilling such as hydraulic fracturing, or fracking, greatly increased the amount of gas on the market. For many utilities, that’s made gas more attractive than coal.
Meanwhile, companies have gotten more efficient at extracting coal, meaning fewer workers are needed. Mountaintop removal mining, in which hilltops in Appalachia are blasted off with explosives to expose coal seams, is less expensive and more automated than underground mining. So are the massive strip mines developed since the 1970s in Wyoming and Montana.
U.S. coal production fell to 739 million tons last year, the lowest in almost four decades. From 2011 through 2016, the coal mining industry lost about 60,000 jobs, according to preliminary Labor Department data that excludes mine office workers.
Last weekend, Environmental Protection Agency Director Scott Pruitt said Trump’s policies had created 50,000 coal jobs, including 7,000 in May alone. In fact, the coal industry nationwide accounted for a total of 51,000 jobs through May, up only about 400 jobs from the month before.
Pruitt’s staff pointed to job gains across the overall mining sector — which includes oil and natural gas drilling, metal ore mining and stone quarrying.
Over the last decade, coal’s share of the U.S. power market dwindled from more than 50 percent to about 32 percent last year. Gas and renewables both made gains, and hundreds of coal-burning power plants retired or are scheduled to shut down soon.
Utilities “are not going to flip on a dime and say now it’s time to start building a whole bunch of coal plants because there’s a Trump administration,” said Brian Murray, director of environmental economics at Duke University’s Nicholas Institute.
None of that appears to have shaken the administration’s backing of coal. During a Wednesday meeting with international energy ministers in Beijing, Energy Secretary Rick Perry said devising ways to burn coal more cleanly could stimulate economic growth.
SHOULD THE FEDERAL GOVERNMENT SUBSIDIZE COAL?
The Obama administration blocked new coal lease sales on federal lands in January 2016 to determine if the government’s coal program was shortchanging taxpayers and exacerbating climate change by effectively subsidizing coal.
In some cases, coal companies bought leases for as little as 1 cent per ton. The program is supposed to be competitive but often involves just a single bidder. The royalties these companies pay to the government on each ton of coal mined have remained unchanged since 1976.
Under the moratorium, the Obama administration was considering raising royalty rates as much as 50 percent. Trump has put that idea on hold. Environmentalists last week took the matter to the U.S. District Court of Appeals in Washington D.C. seeking to revive the coal program review.
About 40 percent of coal produced in the U.S. comes from federal land in Western states.
Even before the moratorium, many mining companies were going bankrupt and had delayed plans to lease tracts holding 1.5 billion tons of coal.
That’s enough fuel to run the nation’s coal-fired power plants for two years at current consumption rates.
Lifting the moratorium in March hasn’t triggered much new coal leasing. One exception: PacifiCorp seeks to lease 19.8 million tons of federal coal at a mine near a Wyoming coal-fired power plant.
That’s about as much coal as all of Wyoming’s mines produce every 16 days or so.
The Appalachian region once dominated coal mining but now accounts for less than 25 percent of production.
THE CARBON BALANCE
Burning the coal that was covered by the Obama moratorium would unleash an estimated 3.4 billion tons of carbon dioxide. That’s equivalent to a year of emissions from 700 million cars. And it’s just a small portion of the federal government’s coal reserves.
Environmentalists say keeping that coal in the ground is crucial to the global effort to minimize climate change. But coal’s advocates argue climate regulations shouldn’t come at the industry’s expense.