Trump Cannot Bring Back Coal
11 May 2016
Donald Trump’s promise to open shuttered coal mines in Appalachia might be as hard to fulfill as getting Mexico to pay for a new wall, analysts suggested.
The vow by the presumptive Republican presidential nominee would likely mean turning back regulations on greenhouse gases and perhaps toxic air pollutants, experts said. Even then, it’s unlikely that the cost of extracting coal from eastern mines would be cheaper than using natural gas in power plants, they said, making a widespread mining revival improbable.
“It’s very, very, very unlikely he could do something to get coal back to where it was seven years ago,” said John Deskins, director of the Bureau of Business and Economic Research at West Virginia University.
On Thursday, Trump drew wild applause in Charleston, W.Va., by telling miners in hard hats and reflective stripes to get ready to be “working your asses off” in reopened mines if he’s elected. Some people waved signs saying, “Trump digs coal,” and the business tycoon joked about needing a spritz of hair spray after trying on a miner’s helmet, the gift of an industry group.
“I’m thinking about the miners all over this country,” Trump said. “We’re gonna put the miners back to work. We’re gonna put the miners back to work. We’re gonna get those mines open.”
His comments were directed at a plunging industry. Eastern coal is facing rising extraction costs because its veins are thinner and buried deeper than the coal in Wyoming’s sprawling Powder River Basin. Eastern coal can cost up to twice as much as the western resource, making it unable to compete against cheaper natural gas, experts said.
West Virginia is especially suffering. Its production peaked in 2008 at 158 million short tons. It’s been tumbling ever since as hydraulic fracturing and horizontal drilling have supplied greater amounts of natural gas. This year, the state is expected to extract between 80 million and 90 million short tons, Deskins said.
“Coal keeps producing worse than we expect,” he said.
Chiza Vitta, an analyst with the credit rating service Standard & Poor’s, sees two ways that Trump might try to fulfill his promise to reopen the mines. The first is a protracted effort to turn back a number of environmental regulations, like the pending Clean Power Plan curbing greenhouse gases from power plants.
Other regulations might also have to be targeted to achieve a widespread revival, including rules governing toxic air pollutants. Some Republican energy advisers see that as a politically tenuous exercise.
The second scenario is more severe and even less likely, Vitta said. Trump could ask Congress to provide subsidies to the coal industry to make it more competitive with natural gas.
“That seems to me a very, very low probability,” Vitta said.
Both analysts interviewed see a continuing decline in the coal sector, with no real chance for a major recovery.
“We by no means are saying it’s going away completely,” Vitta said. “There’s always going to be a space for thermal coal. But the industry is going to be notably smaller to be profitable again.”
He added, “We do not view regulations as the primary factor for the decline.”
Source: Scientific American