Coal - Regulatory Relief Matters
It's been a rough eight years for coal miners. In a 2008 interview with the San Franciso Chronicle's editorial board then presidential candidate Barack Obama declared, “If somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them..."
And indeed there were bankruptcies after Barack Obama became president. In fact, eight years later, in April 2016, the Sierra Club was able to crow, "The Coal Industry is Bankrupt...Coal companies are going under, banks won't lend money, mines are closing: The curtain's coming down on coal."
In a 2015 report titled "The Black Death," the National Resources Defense Council, wrote "The suffering extends from the smallest companies to the behemoths. The two largest coal producers, Peabody Energy and Arch, lost a combined $1.2 billion last year. Those that haven’t gone bankrupt are trading at small fractions of their values from just five years ago. Between 2009 and 2014, while the Dow Jones Industrial Average rose 69 percent, the Coal Sector Index lost 76 percent of its value. It would be difficult to overstate the industry’s current distress."
Coal may have already been weakened (for reasons too numerous to list here) but there is no question that a cavalcade of aggressive, new regulations limiting carbon emissions and restricting where businesses could be sited certainly helped tip 26 coal companies and 264 mines over the edge into closure during the Obama years. There is a reason that a several-pronged regulatory program came to be known as the "War on Coal."
Comes now president-elect Donald Trump who has told war-weary workers, “If I win we’re going to bring those miners back" and, at a rally in West Virginia, to “Get ready, because you’re going to be working your asses off.”
But was Trump just "blowing smoke" as environmentalist Joseph Romm put it?
Trump's campaign assertions have since been jeered from all corners as nothing more than unrealistic campaign snake oil peddling. Coal was on the way out long ago, say the critics. How in the world can that chunky, dusty Victorian-era stuff compete with cleaner, cheaper natural gas?
The U.S. Chamber of Commerce's Institute for 21st Century Energy plots a line up the middle between Trump's shining city on the hill and the naysayers with their article "Trump and Coal: Don’t Call it a Comeback, but Regulatory Relief Matters Immensely."
Author Dan Byer asserts that, "The massive supplies of natural gas enabled by the shale revolution have realigned markets for the foreseeable future, and it is difficult to envision a return to the mid-2000s when coal provided more than 50% of electricity nationwide (it now stands at 32%)...[Still], the odds are high that [Trump] can help save most of the 535,000 coal mining-related jobs that remain." (Italics added.)
How? Why? Because -- as Byers illustrates with an IEA chart (above) -- regulatory relief matters.