Commentary by James Shott
It is a common idea among many Americans that coal as a major industrial fuel is dead, or at least dying, and cleaner fuels, like wind and solar energy, and natural gas, are taking over. There is some truth there; but there are other influences on coal’s recent decline.
Less costly natural gas has become the fuel of choice in power plants and for other industrial uses, not because of the natural relative price of the fuels, but because of the cost of regulatory demands on mining and burning coal that require enormous investments that have priced coal higher than natural gas. Remember former President Barack Obama’s prediction: “So if somebody wants to build a coal-powered plant, they can. It's just that it will bankrupt them.”
These regulations produced the closing of more than 400 coal-burning power plants, which dropped the demand for coal, and altogether put 63,000 people in the coal industry, electric production industry and related support industries out of work in just the last few years.
At just the right time hydraulic fracturing (fracking) became popular, after lying mostly dormant since its first commercial application in 1957, and that produced a boom in natural gas production at attractive prices to compete with coal.
Many think burning less coal is a great thing, because burning coal fouls the air and is dangerous to our health, a “truth” which loses importance when you know the actual infinitesimal improvement in air quality derived from burning less coal.
However, considering all those factors, and paraphrasing a famous quote attributed to Mark Twain, the rumors of coal’s demise have been greatly exaggerated.
Of course, coal will never regain its former dominance among industrial fuels; time and technological/industrial evolution would just as certainly, although much more gradually, have eaten into coal’s popularity without the help of the Obama War on Coal.
But the regulatory adjustments of the Trump administration, the growing acceptance of the idea that the climate change/global warming mania is dramatically overstated, the reality that coal is still the best fuel for many things, the fact that many countries that do not have domestic coal supplies depend upon it for fuel, and the improvement in coal-burning technology all point to a continued market for American coal.
And let’s not forget that fossil fuels made up 81 percent of the fuels used to produce electricity in 2016, and coal is still the primary fossil fuel in electricity production.
Industry insiders, like Murray Energy CEO Robert Murray, see a partial resurgence in coal. “Coal will grow back,” he told Fox Business Network’s Stuart Varney. “But we’re in a decline right now.”
He went on to say that Trump “can bring back at least half of those [63,000 lost] jobs as the economy grows and as he ends the regulations on coal.” He noted that we have not had a level playing field in coal; “the government has been picking winners and losers.”
And he told Maria Bartiromo, also on Fox Business Network, former President Obama closed 411 coal-fired plants, and that the Clean Power Plan which Trump ended recently, would have closed 56 more plants. That, he said, would have caused a steep spike in electric rates.
“As [Trump] grows the economy [and] brings jobs back to America, coal will participate in that growth because we are one-sixth the cost of a windmill and one-fourth the cost of natural gas,” Murray said.
Rep. Bill Johnson, R-Ohio, said, “The coal industry knows and understands how to mine coal … and protect our environment. We don’t do it the way it was done 50, 60 years ago.”
Here are a few pieces of evidence:
* Reports from the Kentucky, West Virginia and Virginia coalfield regions say that mines are cranking back up and miners are being rehired. Train yards are seeing cars filled with coal moving through them in greater numbers.
* Bluefield State College recently held a Job Fair to immediately fill 85 open coal positions at Wyoming and McDowell county mines that mine coal used in making steel.
* Fox News reports that in Wise County, Virginia, a “long-awaited revival is under way in this beleaguered Central Appalachia community where residents see coal as the once and future king. Trucks are running again. Miners working seven days a week cannot keep up with current demand.”
* Coal exports through Hampton Roads last month rose more than 50 percent from last year's level, led by a nearly five-fold increase at Newport News' Pier IX, according to the most recent Virginia Maritime Association statistics. "A lot of mines are open again," said Harry Childress, president of the Virginia Coal and Energy Alliance."
Few if any argue that the coal industry will return to its former greatness, but it will certainly endure for many years at a lower level if natural forces are allowed to work, free of politically correct environmental engineering.
When you replace regulations resulting from selfish ideological goals with a business regulatory level based upon common sense, good things can happen.
Cross-posted from Observations