Donald Trump has promised to reopen coal mines and restore coal jobs. While anything is possible – this election certainly proves that – the odds aren’t on his side. If elected, Trump could certainly roll back some regulations. But the biggest problem the U.S. coal industry faces is an energy marketplace dominated by clean and inexpensive natural gas.
Thanks to the shale revolution, we have a vast supply of natural gas that only grows by the year. Natural gas is running circles around competition in the electricity marketplace. When used to generate electricity natural gas produces just half the carbon emissions of coal-based plants. Greater use of natural gas in place of coal is currently the centerpiece of U.S. carbon reduction efforts.
While we have heard little detail about Trump’s plan to help coal, we do know he is a outspoken proponent of “fracking,” the key technique used to produce oil and natural gas from shale rock. It’s rumored he’s eyeing Harold Hamm, the shale oil giant of North Dakota, as his energy secretary. A pro-fracking administration, that potentially makes it even easier and cheaper to produce shale gas, will likely do coal relatively few favors.
Furthermore, the damage done to coal’s U.S. market may be very hard to reverse. Consider that it was just 10 years ago that coal generated 50 percent of the nation’s electricity. Today, coal generates about 32 percent of our power and that percentage is likely to decline further. Natural gas for the first time has now surpassed coal as the nation’s largest producer of electricity.
Some 350 U.S. coal plants have been shuttered in just the past five years. These are plants that have either been closed for good or have been converted to burn natural gas.
New coal power plants, which would increase demand for U.S.-mined coal, aren’t coming to the rescue. Anti-coal environmental groups, led by the Sierra Club, have made it all but impossible to build a new coal plant in the U.S. Utilities have more or less given up – not a single new coal plant is planned.
On the other hand, there are some 1,500 coal plants planned or already under construction overseas.
Coal remains absolutely essential to energy needs from Europe to East Asia, but exports of coal, which seemed U.S. coal’s bright spot just a few years ago, have disappointed.
Our coal has to compete with exports from Indonesia, Australia and other coal-exporting countries often closer to buyers. The global coal market is also not what it once was, thanks largely to a slowing economy in China. As Chinese coal demand has tapered off so have prices for coal exports. China is the goliath in the global coal market, consuming as much coal as the rest of the world combined.
Trump, along with any candidate brave enough to promise a new day for American coal, faces an uphill battle. Certainly, Hillary Clinton has proven herself no friend of coal, or even other fossil fuels. But coal’s future seems less tied to the outcome of the election than it does to an energy marketplace awash in inexpensive natural gas.
One dynamic which bears watching is how much natural gas demand grows and, in turn, natural gas prices rise in the years ahead, which might help coal and renewables grow some.
For decades, the coal industry and coal miners provided the fuel to keep our lights on and our factories humming. They still play an important role in our economy today. The coal industry must not be maligned, nor forgotten. But our energy future, for reasons beyond the control of politicians, seems to be moving in a different direction.
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