Coal Industry Says It’s Back, Lauds ‘Unshackling’ Of Obama-Era Regulations

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Michael Bastasch DCNF Managing Editor
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The coal industry is making a comeback, the National Mining Association says, in part because the Trump administration is “unshackling” the industry of “myriad regulations” from the Obama presidency.

“Attribute part of the nascent coal revival to the unshackling of myriad regulations that drove coal plants into retirement and production down sharply,” reads an NMA blog post published Wednesday.

The Trump administration has rolled back Obama-era environmental regulations. Coal exports abroad are up 60 percent over last year, and analysts expect the U.S. will burn more coal to generate electricity than natural gas.

The Wall Street Journal editorial board also says the industry is on its way back. “Not long ago liberals hailed the demise of coal as inevitable while the Obama Administration strangled the industry with regulation,” the board wrote in a Wednesday editorial. “But don’t look now, Tom Steyer, because coal is showing signs of a revival and breathing economic life into West Virginia.”

The Trump administration moved relatively quickly to rescind Obama administration regulations critics said hampered the coal industry. That includes rescinding the several major Environmental Protection Agency (EPA) regulations targeting coal power, including mercury rules and the Clean Power Plan.

But NMA says the coal industry itself has become leaner in the past few years. Major coal producers have emerged from bankruptcy in the past year after losing money hand over fist to low-cost natural gas.

“But it’s Darwinian logic that explains most of the revival,” reads the NMA blog post. “Producers that survived the brutal stress test from both shale gas and federal regulation squeezed costs out of their operations, positioning the U.S. to become more than a swing supplier to offshore markets.”

While repealing regulations helped, larger market shifts played a larger role, according to NMA.

“In fact, the U.S. is exporting more coal to every major region, including the EU, where shipments are up by more than a third over 2016,” reads NMA’s blog post. “Nuclear plants are struggling in the UK and in France, creating surprisingly strong demand for U.S. coal. Steam coal exports to Asia, where grids are still growing, have doubled.”

Earlier this year, Cloud Peak Energy CEO Colin Marshall predicted a record year for coal exports.

“There is already a revival in exports compared to this time last year, but that wasn’t due to Trump,” Marshall told Axios in April, attributing export growth to increasing demand in China and South Korea.

However, Trump may deserve some credit for rising exports to China, which has been relying more on U.S. coal for steel production after the country banned imports of North Korean coal.

China had been lax on enforcing the North Korean coal sanctions, but customs officials ordered North Korean cargo ships loaded with coal to turn around the day after Trump launched a missile strike against Syria’s Assad regime.

The coal export boon may be short-lived, according to analysts. The Energy Information Administration projects total coal exports this year will be 17 percent above 2016 levels, but projects exports to only grow one percent in 2018.

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