One of the lies that Donald Trump, a/k/a Der Trumpenführer, during his Russian assisted campaign and since is that he would end "the war on cal" and promised those in coal producing regions of the country that he bring back the glory days of the coal industry. Like so much else that was promised by Trump and his sinister minion, Mike Pence, it was all a lie because there is no war on coal. The decline of coal is driven not by government regulation but by economic conditions that nothing Trump does can reverse. Thus, Trump's reversal of Obama administration regulations and moratoriums on leasing on federal lands will change nothing. With cheaper and cleaner natural gas alternatives, coal fired power plants are on the decline both in America and around the world. Trump, of course, is not the only Republican lying about the ending the war on coal and bringing the coal industry. Ed Gillespie has crisscrossed Southwest Virginia making the same disingenuous promises that Trump has trumpeted. Now, Mike Pence is campaigning with Gillespie and telling the same lies. Sadly, many in rural Virginia are believing the Trump/Gillespie lie that government regulation and the EPA are the problem and will likely be duped into voting against their own long term best interests. A column in the Washington Post looks at the economic conditions that are really behind the death of the coal industry.
It was depicted by energy executives and conservatives as a “witch hunt,” “a politically motivated sham” and a move that would “destroy mining in the West .” In January 2016, President Barack Obama imposed a three-year moratorium on federal coal leasing, which halted new projects and delayed pending applications for companies to extract coal from federal land. During that time, the Interior Department was to carry out an overdue review of the program’s social and environmental costs.
A year later, all this was an easy target for President Trump, who had promised to save the coal industry from oppressive regulations and slumping sales . On March 29, his administration lifted the moratorium and deep-sixed the study.
[T]he president said he was “putting an end to the war on coal.” Interior Secretary Ryan Zinke argued that the leasing program was critical to “energy security” and “job creation.” EPA Administrator Scott Pruitt followed that by moving this past week to repeal Obama’s Clean Power Plan, designed to limit carbon emissions.
But the moves to save this industry have actually exposed its weaknesses — and revealed a trend that coal companies and the Trump administration have not acknowledged publicly: The companies are scaling back, in some cases shedding workers and declining the opportunities the federal government now wants to give them. Despite Trump’s best efforts, the American coal industry remains on life support.
Outwardly, coal companies and their advocates have embraced Trump’s aggressive rollbacks as aids toward boosting production and creating jobs. These are central elements of Trump’s promise to “make America great again.” And the administration frequently boasts that coal is making a comeback. . . . But a recent White House talking point — that some 50,000 new coal-mining jobs had been created since the election — has been debunked. The figure is closer to 1,300.
In private, coal company executives are deeply skeptical about the administration’s ability to alter market conditions. In numerous letters to Bureau of Land Management state offices that I obtained through Freedom of Information Act requests, the coal industry acknowledged the continuing decline in demand, and in several cases, companies withdrew pending lease applications.
In the six months since that announcement at the EPA, companies have withdrawn five of 44 pending lease applications, and at least eight are indefinitely on hold. In a number of cases, companies have explained that their decisions are based on persistently weak market conditions.
In the letters to state BLM offices obtained through FOIA requests, coal companies admitted that the future is not as rosy as they might have hoped or would like to project. Arch Coal, the second-largest supplier in the United States, referred to the “continued downward pressure on the Powder River Basin and subsequent reduced output over the past seven years” in explaining why it was withdrawing a lease application for a major new mine in Wyoming. Rhino Energy, which has operations in Appalachia and the West , said that “current coal market conditions remain depressed” and that it wouldn’t move forward with a lease for a proposed 14,000-acre mine in Colorado until that outlook changed.
This is hardly the picture of an industry on the rebound, and it is squarely at odds with one of the central promises of Trump’s presidential campaign: that policy changes would revive the ailing sector and create thousands of new jobs in coal communities. Not that the administration hasn’t tried. . . . But it’s not enough to compensate for weak domestic demand, driven largely by the rise of natural gas as an alternative to coal.
In the end, lifting the much-vilified moratorium will have little, if any, impact on the price of natural gas (made cheap by the discovery of huge new deposits in the past decade and advances in drilling technology), declining domestic demand for coal (thanks to the shuttering of dozens of coal-fired power plants) or a relatively flat export market (because of price volatility and the cost of shipping). Those fundamentals won’t change anytime soon. And some companies seem to think their best bet is an outright bailout.
If there was suddenly a surge in demand for coal, the industry would be poised to ramp up production from existing mines. That is unlikely to happen. “We don’t think [the industry] is going to need new reserves from the federal government for a decade,” said Daniel Rusz, a research director at Wood Mackenzie, a global consultancy with clients in the financial and energy sector.
For coal’s champions, inside the administration and out, that’s the rub: The domestic coal market shows no signs of fundamentally changing, and without renewed demand, there’s no reason to pursue new leases. According to a March study by Headwaters Economics, 142 coal-fired power plants have retired generators or closed entirely since 2009. That trend is expected to continue. Just this month, one of the largest coal-fired power plants in Texas announced that it would be shutting its doors early next year; a spokesman for the company that owns it called the plant a “money loser.”
“There are no new coal plants being built,” said Rusz. If companies open new mines, who is going buy the coal in 30 or 40 years?
Not a single ton of coal has been leased from the Powder River Basin since June 2012. “We still have a market moratorium,” Anderson points out. “We had it for four years prior to the official moratorium. And it’s still going.”