To Save Coal, Trump Has To Raise Your Gas Bill

Republicans and Democrats both have reasons for perpetuating the idea of a "war on coal," energy experts said this week, but the decline in coal's fortunes stems largely from competition with natural gas.
"Both sides have a vested interest in the storyline for their constituencies: one, that the government is putting them out of work, and on the other side, that they’re reducing emissions," said Steve Cicala, an expert on the economics of regulation and professor at the University of Chicago's Harris School of Public Policy. "And their respective constituencies love that story whether it’s true or not."
The story's not true, Cicala contends, so there's little a President Donald Trump could do to improve coal's prospects or to save the jobs of coal miners by ending a government war on coal. To keep his campaign promise to revive the coal industry, he has to find a way raise the price of natural gas.
"The only thing that’s going to help these coal-fired power plants stay open and keep operating is if the price of natural gas goes up," Cicala said in a podcast released Friday by the Energy Policy Institute of Chicago. "That’s the only thing that’s going to make it economical to be firing up these plants."
The president has limited power to affect gas prices, especially with most of America's gas flowing from fracked domestic wells on private property. But the government could promote natural-gas exports, which would bring the domestic price into closer balance with the price in Europe, where gas costs twice as much, and in Japan, where it costs four times as much.
That would raise prices for Americans who use gas to heat their homes, and it might help the coal industry. But it also might not, because renewables, also suppressed by low gas prices, are likely to seize much of the opportunity.
"In that sense," added environmental economist and EPIC executive director Sam Ori, "it doesn't really seem like there's much a President Trump can do to bring back those coal jobs."
During the campaign, Trump’s energy plan focused on removing bureaucratic and political barriers to oil and gas development in the U.S., citing North Dakota’s fracking revolution as its primary example of American energy potential. But he also promised a coal revival, telling coal miners in West Virginia to "get ready because you're going to be working your asses off."
The problem with those promises, said Mark Templeton, director of the Abrams Environmental Law Clinic at the University of Chicago Law School, is that those fuels compete.
Cicala, Ori and Templeton agreed coal's struggles have been minimally affected by the Obama Administration's environmental regulations, including the Mercury and Air Toxics Standard, the Cross State Air Pollution Rule, and the pending Clean Power Plan.
Some coal-fired power plants have closed rather than upgrade, but those have all been marginal plants that were getting little use, Cicala said. "The idea that regulations designed to prevent pollution hurt the coal industry is misguided," he said.
Obama's Clean Power Plan is on hold while it faces an uncertain fate in the courts. If Trump kills the Clean Power Plan, it might delay coal's demise, but it won't prevent it.
"I think that if the Clean Power Plan is killed then maybe there will be some delay in some of the retirements of the plants that have been announced or that were kind of accelerated, and so maybe that keeps the demand up a little bit more than it would be otherwise," Templeton said.
But most of the Clean Power Plan goals—which seemed distant just a year ago—have come close to fruition thanks largely to the natural gas-powered drop in coal use.
"The Clean Power Plan isn’t really expected to have as dramatic an impact as people make it out to be," Ori said. "A lot of the reductions in coal-fired electricity generation and in overall CO2 pollution have already been achieved."
But even cheap natural gas cannot be blamed for the loss of coal mining jobs, Cicala said.
"When we hear about the war on coal, the face of that is coal companies going out of business, miners being laid off, but if production hasn’t really gone down, those two things don’t really go together," Cicala said.
Coal production didn't so much disappear as move west to Wyoming, he said, where strip mining is done by massive machines that can harvest coal more cheaply than Appalachian miners.
"But a lot of that has to do with the shift of coal to the west, where you only need a few guys running these machines to produce 20 times more coal in an hour than it takes to put a guy underground in West Virginia," Cicala said.
Deregulation of the railroads drove that western shift, he said, not environmental regulations. Deregulation allowed cheap Wyoming coal to compete with West Virginia coal over a much larger area.
"Nowhere in here is it an issue of the government keeping the coal in the ground," Cicala said. "We can talk about sulfur regulations if you want but it’s really trivial. The competition that’s going on is for who’s going to fire up their power plant and where are they buying their fuel from."
Ori asked Templeton to predict jobs after four years of a Trump Administration:
"I think coal jobs will be down," Templeton said.
He asked Cicala about coal-fired energy generation:
"Oh," Cicala said, "way down."