November 14, 2016 Read More →

Trump’s ‘Nearly Impossible’ Promise to Revive Coal

Rebecca Smith for the Wall Street Journal:

Donald Trump campaigned on a promise to resurrect the ailing U.S. coal industry and put miners back to work. Delivering on that vow could prove nearly impossible.

Electric utilities that buy more than 95% of the coal mined in America have already retired hundreds of their coal-burning power plants from Colorado to Connecticut—amounting to about a third of the total capacity—and have plans to mothball even more.

While in Appalachia earlier this year, Mr. Trump pledged to “bring the coal industry back, 100%” by rolling back environmental regulations. But coal’s biggest problem is that it is no longer the cheapest fossil fuel around. It is being displaced by natural gas.

American Electric Power Co. of Columbus, Ohio, one of the nation’s biggest utility companies, has sold or retired half its fleet of coal-burning power plants in recent years. No matter who occupies the White House, “it’s not coming back,” said Nick Akins, AEP’s chief executive.

Even if Mr. Trump makes good on his campaign promise to relax or repeal pending limits on carbon emissions, it won’t be enough to restore coal’s market share. “We’re moving to a cleaner-energy economy and we’re still getting pressure from investors to reduce carbon emissions,” Mr. Akins said. “I don’t see that changing.”

Investors love gas-burning power plants because they take less time to construct, cost less to operate and convert fuel into electricity with greater efficiency. Gas has just half the carbon emissions of coal and, thanks to the U.S. drilling boom, most of the country is now flush with new supplies.

Since the 2008 recession, the gas glut has become so acute that prices have plunged by more than 60% while coal has been relatively stable, federal data show.

The percentage of electricity Duke generates by burning coal has steadily dropped from 58% in 2005 to 35% in 2015, mirroring a nationwide trend. The company closed 40 coal plants in the last five years and expects its coal-fired power generation to keep dropping until it stabilizes at 23% in 2030.

Atlanta-based Southern Co., one of the biggest coal-burning utilities, is also pouring money into gas projects because they lower power-generation costs and offer better growth opportunities. Southern recently bought AGL Resources, a gas utility, and said it would spend $1.5 billion on a 7,600-mile pipeline network to connect Gulf Coast gas supplies to consumers in Alabama, Georgia and South Carolina.

Mr. Trump has said he would throw out the Obama administration’s Clean Power Plan, which was designed to greatly reduce carbon emissions. If he is successful, some utilities may keep some coal plants running for longer. Twenty-four states, including Texas, New Jersey and Wyoming, sued the federal government to block the Clean Power Plan; the issue is now before a federal appeals court. Even in those states, some utilities supported President Obama’s carbon-reduction efforts.

“Markets are driving a lot of the behavior,” said Tom Williams, a spokesman for Duke. “Regardless of what happens to the Clean Power Plan, we’ll continue to move toward a lower carbon energy mix.”

Coal basins in Appalachia and the Powder River Basin in Montana and Wyoming are hurting. U.S. coal companies have shed 21,000 jobs nationwide since 2008. Employment fell 12% in 2015 to 66,000 employees, with West Virginia and Kentucky the taking the brunt of the cuts.

Full article ($): Cheap Gas Tests Trump’s Promise to Revive Coal

Curtis Tate for McClatchy:

Donald Trump campaigned on a promise to bring back jobs to struggling coal communities, and laid-off miners contributed to his presidential victory.

But the reality is more complicated.

Trump can roll back regulations developed by the Obama administration to curb carbon dioxide emissions from coal-fired power plants and to protect streams from the impacts of coal mining.

He’ll be able to appoint regulators who are more friendly to the industry, and he’ll have a Republican Congress more than willing to enact laws that are favorable to coal.

He can’t, however, easily change the market forces that have contributed to coal’s collapse, primarily competition from cheaper natural gas produced by hydraulic fracturing. While Trump supports coal, he also supports its chief competitor.

Plus, Trump’s protectionist talk on trade could potentially hurt the biggest bright spot for the coal industry: exports of metallurgical coal, the kind that’s used to make steel.

“I don’t think there’s a lot of coal miners who’ve been laid off who dusted off their resume on Wednesday morning,” said Nick Carter, interim president of the Kentucky Coal Association.

Some utility executives have already begun the shift away from coal. In September, Greg Pauley, the president and operating chief of Kentucky Power, told an energy conference that coal isn’t coming back “no matter who is elected in November.”

Pauley cited the lower price of natural gas and renewables as the driving force.

Full article: Trump wants a coal comeback. It probably won’t happen.

 


Jessica Shankleman for Bloomberg New:

If coal plants remain open, the world would have to rely instead on carbon reduction technologies. Those could include carbon capture and storage. Some scientists have suggested geoengineering may become necessary, requiring man-made steps to change the climate such as pouring nutrients into oceans or spraying tiny particles into the Earth’s atmosphere to reflect sun rays back into space. Such proposals have been shunned because of their unpredictable consequences on global ecosystems.

The Marrakech meeting has been overshadowed by Donald Trump’s victory in the U.S. election on Tuesday. The president-elect has said climate change is a hoax perpetrated by the Chinese and vowed to scrap U.S. participation in the Paris agreement and stimulate coal and production.

Trump may have difficulty reversing coal’s decline as a power generation fuel, since cheap natural gas has cut its market share.

“Although the U.S. election has created short term tailwinds for the coal industry, the medium and long term outlooks point to continued decline,” said Tom Sanzillo, finance director at the Institute for Energy Economics and Financial Analysis, an environmental researcher based in Cleveland, Ohio.

Full article: Rich Countries Told to Close Coal Plants by 2030 to Save Climate

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