The story of hardworking coal miners put out of jobs by unreasonable government regulations, repeated by Donald Trump on the campaign trail, was compelling. But it isn’t entirely true.
Demand for coal in the U.S. has dropped because, in recent years, there has been a cheaper alternative: natural gas.
Coal was a major source of electricity generation in the United States for decades. But with natural gas abundant and less expensive than coal, utilities increasingly are switching to natural gas to produce electricity. This is especially true on the East Coast. The only coal-fired power plant in New England today is Merrimack Station in New Hampshire. And the fate of that plant, which is up for sale, is unclear.
So, the only way President-elect Trump can “bring back coal” is to somehow raise the price of natural gas. This would be especially harmful to people in Maine, where natural gas is increasingly used to generate electricity and to heat homes. Lowering electricity and natural gas prices has been a cornerstone of Gov. Paul LePage’s energy policy.
In fact, Trump has also said he wants to expand drilling and fracking to extract more natural gas and oil in the United States. With more gas on the market, prices would further decline, making coal even less competitive.
About 93 percent of the coal produced in the United States is used to generate electricity, according to the Energy Information Administration. A cleaner and much more expensive type of coal is also used in steelmaking.
Last year, one-third of the electricity generated in the U.S. was from coal. That is a significant drop from nearly half in 2007.
Nearly half of the electricity produced in Maine comes from natural gas. The state’s only coal-burning power facilities are at paper mills in Rumford and Westbrook. Both primarily burn wood but can burn coal.
Regulations do play a role in the price of coal. However, it is regulations around health concerns, not climate change, that have long increased the price of coal. Unless Trump plans to seek the repeal of the Clean Air Act or mercury rules, he won’t start a coal renaissance, according to Jonathan Rubin, an economics professor at the University of Maine.
This isn’t just an academic discussion. Last week, the CEO of Michigan’s largest utility, DTE Energy, said his company still planned to retire all eight of its coal-fired plants by 2030, regardless of what happens with the Clean Power Plan, the much-maligned Obama administration plan to cut carbon dioxide emissions from power generation, which the Supreme Court put on hold earlier this year. “I don’t know anybody in the country who would build another coal plant,” Gerry Anderson t old MLive.
Instead of coal, DTE Energy is investing in natural gas and renewable energy sources, which, Anderson says, are cheaper and cleaner — and what his customers want.
The outlook for international markets isn’t much better. Coal imports to China and India are well below expectations. As a result, dozens of U.S. coal companies are in bankruptcy.
Instead of promising to revive the coal industry, which isn’t possible, the incoming Trump administration should look beyond the past and develop plans to help America’s coal-dependent regions diversify their economies. That would be a realistic solution to a problem that has been years in the making.
