The coal industry has long complained of “Obama’s War on Coal.” Now, for at least the next four years, it will have a chance to see if its woes are the result of such a regulatory assault or the depressed national and international demand.
To that end, Donald Trump’s surprise victory on election night is seemingly good news to both the natural gas and coal industries, which would have fewer regulations on drilling. However, that’s where there mutual interest stops. Under the Obama administration, natural gas been the bridge to get an energy economy built on renewables. To the point, it has been replacing coal and has thus led to significantly lower carbon emissions.
“Even if Trump were able to magically get rid of all coal regulations, he’d still have to find a way to reverse market trends,” writes Matt Goldberg, of the Third Way think tank. “This would require Trump to either tax natural gas for its success or hand out money to the coal industry to make coal more competitive.”
My colleague Jessica Hardcastle points to a Lux Research forecast that says US carbon emissions would be 16 percent higher — or 3.4 billion tons more — after two terms of a Trump presidency than they would have been after two terms of Hillary Clinton. That’s because it feels more coal will be burned.
Indeed, coal and natural gas are going head-to-head to fuel the electricity market place. In fact, natural gas is coal’s major competitor, having taken significant market share from it: natural gas now provides 34 percent of the fuel used to make electricity while coal makes up about 30 percent, which could only change if the next U.S. president were to really clamp down on natural gas production by assessing it with more taxes or making it impossible to drill.
In reality, utilities have already started closing their coal-fired power plants and building mostly combined-cycle natural gas plants that have been easier to permit. Moreover, the fuel is just as cheap as coal and it pollutes a lot less, and specifically release less carbon emissions.
In an earlier conference call, Bloomberg Intelligence said that utilities have been happy to retire the older plants because they had little depreciating value. It also said that, at best, in a Trump administration, a few of the coal plants that would have been retired will remain active and in service.
As to what will happen to the Clean Power Plan and the US involvement in the Paris accord? Some experts have said that if the Clean Power Plan gets past the district court and the US Supreme Court there is little that a Trump administration could do to change its course. As for the Paris accord, Trump could certain pull out of the deal or renegotiate America’s part in it. But the US would then become a pariah internationally, although this is something that Trump could sell at home to the manufacturing base here.
It’s too early to answer those questions, although the Obama administration has said it will do everything it can to ensure that its policies can’t be uprooted by a presidential administration that disagrees with it. With that, coal may get a second wind but it’s glory days are still behind it. Not even Donald Trump can change that.