Energy

The Coal Industry May Have ‘A Fighting Chance’ Under Trump

(REUTERS/Jonathan Ernst)

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Michael Bastasch Energy Editor

Trump signed his most sweeping executive order regarding energy policy in late March — it included repealing federal regulations that limit carbon dioxide emissions from power plants, barring new coal mines, and ending Obama-era climate directives.

While there’s still much uncertainty surrounding the future of coal power, the industry and its supporters believe they at least have “a fighting chance” under President Donald Trump.

“The future of coal remains to be seen and the market should ultimately determine that fate,” Nick Loris, an economist at the conservative Heritage Foundation, told The Daily Caller News Foundation.

“But at least under the Trump administration, coal will be given a fighting chance, which in many respects is all the coal communities have been asking for – a chance,” Loris said.

Coal has made a small comeback this year due to higher natural gas prices and increased demand for metallurgical coal, but it’s expected to be short-lived.

In the long run, the Energy Information Administration (EIA) projects coal will continue to lose marketshare to natural gas as the U.S. proceeds removing federal and state regulations for fracking.

The Environmental Protection Agency’s (EPA) Clean Power Plan (CPP), which limits carbon dioxide emissions from power plants, was projected to force out between 27 and 38 gigawatts of coal-fired power by 2030.

EIA notes that federal and state renewable energy tax credits and California’s 2006 global warming law are some of the major regulatory mechanisms forcing coal plants to prematurely shut down.

“Obviously the EPA led the charge, but the industry also faced regulations from the Office of Surface Mining Reclamation and Enforcement (OSMRE) in the Department of the Interior and the Mine Safety and Health Administration (MSHA) in the Department of Labor,” Loris said.

“Combined, these rules increased the costs of mining coal, building new plants, and operating existing plants with questionable or minimal environmental benefits,” he said.

President of the American Coalition for Clean Coal Electricity (ACCCE) Paul Bailey said repealing the CPP is only the beginning of a series of regulatory reforms needed to help the coal industry.

“Doing something about those two rules is necessary but not sufficient,” Bailey told TheDCNF, referring to the CPP’s rules for new and existing power plants.

Bailey also worries EPA regulations on coal plant waste will force more plants to fold. The biggest year for coal plant closures was 2015 — the same year an EPA rule for mercury emissions went into effect.

EPA finalized regulations for solid and liquid waste generated by coal plants. Bailey said removing those rules would help keep coal plants open. The rule for liquid waste alone is expected to cost $1 billion a year. ACCCE estimated the cost even higher at $3 billion.

Environmentalists disagree and see rules hampering the coal industry as essential to protect public health and tackle global warming. Even if regulations are repealed, energy analysts argue that mine jobs aren’t ever coming back due to mechanization.

Reuters columnist John Kemp wrote that “mine closures and job losses were the result of market forces rather than job-killing government regulations introduced by the Obama administration.”

Utilities that have spent billions complying with existing EPA regulations aren’t giving any signals they will build more coal plants. These companies often plan investments decades ahead of time, meaning once they put a plan in motion, it’s hard to turn back.

“For us, it really doesn’t change anything,” Jeff Burleson, vice president of system planning at Southern Company, told The New York Times regarding the potential repeal of the CPP.

“Whatever happens in the near term in the current administration doesn’t affect our long-term planning for future generations,” Burleson said.

More importantly, even if the CPP is repealed, a future administration could impose stricter regulations down the road.

“This is our long-term view — unless the entire issue of climate change goes away,” John McManus, a vice president at the Ohio-based utility American Electric Power, told NYT.

“And we don’t expect that to happen,” McManus said.

The week before Trump signed his “energy independence” executive order, the utility Dayton Power & Light announced it was closing two coal-fired power plants in southern Ohio.

Environmentalists cheered the plant closings. The head of the Sierra Club’s Beyond Coal Bruce Nilles said the Ohio plant closures bring the total number of coal plants shut down and planned closures to 250.

“This milestone is a testament to the commitment Americans have to cleaner air and water and the power of grassroots action to create healthier communities,” Nilles told Reuters.

Another 12 gigawatts of coal-fired power plants are slated to shut down over the next few years. Those plant closures are likely locked in no matter what Trump does.

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