President Trump has yet to save the struggling coal industry, numbers show
WASHINGTON – President Trump was in a celebratory mood early last spring as he prepared to sign an executive order rolling back environmental protections reviled by the nation’s coal industry.
Turning to the miners beside him at the ceremony, Trump repeated a promise that he made often during his campaign for president.
“You’re going back to work,” he said to nods of approval and applause.
But not much has changed for the nation’s ailing coal industry since Trump moved into the White House.
Coal employment and production are up just slightly, coal consumption is down, and coal prices have fallen a little below where they were the day that Trump took office.
“I don’t think Trump has had any effect on coal so far,” said Noah Kaufman, a research scholar at Columbia University’s Center on Global Energy Policy.
The data may not show it, but coal leaders are adamant that Trump already has had a positive influence on their industry. For the first time in years, they say, miners are daring to feel optimistic about coal’s prospects.
“What we’re hearing from our leadership, as well as the rank and file, is we’ve got a future,” said Luke Popovich, a spokesman for the National Mining Association. “We’re back in business.”
No one is naïve enough to think that coal will return anytime soon to its glory days, when it fueled more than half of the nation’s electricity generation, employment reflected robust production, and coal was fetching high prices in overseas steelmaking centers such as Brazil, China, Japan and South Korea, Popovich said.
But after eight years of President Obama and environmental policies the industry considered hostile, coal leaders believe Trump is putting them back on a level playing field with natural gas and other cleaner forms of energy.
“What has happened, I think, is it has given the industry and investors the assurance that at least their government is not going to discourage production and we only have to deal with the marketplace,” Popovich said.
“Instead of having to fight natural gas, subsidized renewals and our own government, now we are at least free to compete in the marketplace. That has been the big change as far as we’re concerned.”
Other changes have been slow in coming.
Coal employment has barely budged under Trump. Roughly 2,000 new coal jobs were created during Trump’s first eight months in office, but those numbers started to level off last October. By the end of 2017, the total number of coal jobs gained over the previous year was just 900, according to the Bureau of Labor Statistics.
Preliminary figures for 2018 show a slight increase, with a net gain of 1,300 coal mining jobs during Trump’s presidency.
Coal production has risen slightly, about 6% last year, from 728 million tons in 2016 to 774 million tons in 2017, according to the U.S. Energy Information Administration. But analysts attribute the increase in part to the bankruptcy-caused restructuring of several major coal producers, which resulted in lower production costs.
Coal consumption last year fell to 717 million tons, slightly lower than the year before. Even more alarming for the industry: Almost all domestic coal consumption is in the power sector, yet despite an increase in natural gas prices in 2017, coal’s share of power generation for the year was just 30%, the lowest on record and lower than natural gas for the second year in a row.
In promising to end the “war on coal,” Trump may not have had a firm understanding of the extent of the industry’s problems, said Rob Rappold, mayor of Beckley, W.Va.
“I think the president’s intentions were good and are good,” said Rappold, a Democrat. “I think perhaps his realization of the state of the coal industry, for a whole lot of reasons, is maybe a little off-target. It’s not just a matter of a presidential decree that we’re going to reduce or eliminate EPA regulations, and that’s going to be the silver bullet that saves the coal industry. It’s just much more involved.”
One bright spot last year was coal exports, which are expected to total 97 million tons in 2017, a 61 percent increase over the year before.
But analysts say the boost in exports is attributable to international market factors beyond the Trump administration’s influence and probably will be short-lived. The demand for U.S. coal increased last year in China, Japan and India when a tropical cyclone disrupted their supply from Australia. Coal exports are expected to decrease in 2018 and 2019, the Energy Information Administration projects.
Coal industry leaders say the national statistics don’t tell the whole story.
Since Trump took office, coal companies have reopened or are planning to reopen mines in Pennsylvania, Indiana, Ohio, West Virginia, Alabama and Washington.
Yet coal employment numbers fail to take into account that many miners have gone back to work as contractors or that contractors who work as suppliers also are back on the job, said Terry Headley of the American Coal Council.
What’s more, some areas that were hit especially hard by coal’s decline have seen the strongest recovery. West Virginia, for example, saw a more than 15% increase in coal employment last year. Those jobs help fuel the local economy since miners earn an average $84,000 a year, twice the average wage in many coal-producing states.
Also, actions taken by the Trump administration, such as the rollback of Obama-era regulations on power plant emissions and coal mining on federal lands, have yet to produce any far-reaching, tangible results but could benefit the coal industry down the road.
In southwest Virginia coal country, however, officials say they already see signs the industry is on the rebound: Tax dollars generated from coal mining and sales have risen slightly in the past year.
Buchanan County, which borders both Kentucky and West Virginia, is seeing $150,000 to $200,000 more in coal severance tax dollars every month compared with the monthly totals a year ago, said Craig Horn, the county administrator.
Whether that can be attributed to Trump is hard to say, Horn said, but “a lot of people seem to think so.”
For now, Horn said, people sense that the coal industry is stable and will probably remain so for the next couple of years.
Regardless, the long-term future for coal is not promising, Kaufman said, pointing to a study last year by Columbia’s Center on Global Energy Policy. The report concluded that low natural gas prices and the growth in renewable energy were more of a factor in the decline of domestic coal consumption than environmental regulations.
“There’s no reason to think the fortunes of the coal industry are going to change anytime in the future,” Kaufman said. “Coal is an industry in decline.”
Even in coal country, people accept that coal’s halcyon days are over, Rappold said.
“Ninety-nine out of 100 people you talk to will say the days of the tremendous booms in coal are gone,” Rappold said. “We’ve ridden the cyclical effect of coal for the past 70 years or so, experiencing really great boom times with probably fewer periods of downturns in the industry. But people realize we will never see those extreme boom times again.”