Would Coal Miners Do Better Under Obama than Trump?
That’s allegedly the big takeaway from a presentation given on Tuesday, October 17, to the Energy Bar Association by Brattle Group analyst Marc Chupka.
Chupka argues as follows. President Trump promised to help revive the coal industry by ending Obama’s war on coal. He also promised to lift political barriers to oil and gas exploration and development. Although Environmental Protection Agency (EPA) regulations “encouraged” coal capacity retirements, the main reason for coal’s decline as an electricity fuel is the shale gale and associated decline in natural gas prices since 2008.
If Trump repeals only the Obama administration’s anti-coal policies, coal industry production and employment in 2020 and 2030 will increase relative to a no-policy-change “Base Case.” However, if Trump more broadly encourages the development of all fossil-energy resources, natural gas will continue to outcompete coal, and coal production and employment will be lower than in the Base Case.
Axios energy reporter Ben Geman on Wednesday posted a chart summarizing Chupka’s results.
Alleged implication: Trump is conflicted, and if he pursues an “all of the above” energy policy, he will prove to be a greater nemesis to coal mining jobs than President Obama. Many self-styled progressives are no doubt chortling over this supposed demolition of a key Trump campaign promise.
Whether or not Chupka’s coal market analysis proves out in the near term, it misses the big picture. The analysis does not factor in the psychological impact on investors of the Obama administration’s embrace of the progressive movement’s war on coal. Only the boldest investor will park his capital in an industry targeted by the U.S. government for destruction.
Nor does the analysis take into account the ever-increasing stringency that is the hallmark of all “progressive” climate policy. Coal would still provide a sizeable portion of U.S. electric power in what Chupka calls the Base Case, which includes the first Clean Power Plan (CPP) compliance period (2022-2030) and first Paris Climate Agreement commitment period (2020-2025).
However, far more critical to the fate of the coal industry is the long-term frameworks those policies would put in place. The CPP and Paris Agreement would empower the EPA and other federal agencies, for decades to come, to continually ramp up climate “ambition” and tighten the regulatory screws.
So, yes, since 2008, most of coal’s decline as an electricity fuel is due to the surge in supplies of cheap natural gas. However, the Obama-Clinton plan was a shoot-the-wounded agenda. Through the Clean Power Plan, Paris Agreement, coal leasing moratorium, stream buffer rule, and other anti-coal policies, the Obama administration signaled to the world that the U.S. coal industry would have no future. Even if gas prices were to increase due to changes in policy or market conditions, coal would have no prospect of making a comeback, because coal companies would operate under an increasingly punitive regulatory environment.
That is the bleak future coal companies would be facing today had Hillary Clinton won the 2016 presidential election. The idea that coal companies and their employees would be better off under the anti-fossil fuel policy trajectory championed by Obama and Clinton than under the pro-growth energy agenda championed by President Trump is nonsense.