Coal Making A Comeback?

There is no question that the future is brighter for our nation’s coal industry.

Changes in policy, regulations and markets are contributing to a stronger domestic coal industry. The U.S. economy is growing again. Global economic activity is increasing. The business prospects of other countries that use our coal for electricity, steel-making and other industrial purposes are better. U.S. coal exports are up a whopping 70 percent year-to-date through September 2017.

Some new U.S. coal mines have opened and others are expanding, adding good jobs and tax revenue for states and localities. According to the Department of Energy’s Energy Information Administration, year-to-date 2017 U.S. coal production has increased by about 8 percent over 2016. Coal mining employment is trending similarly. It has risen every quarter of 2017, and was up 7 percent for the most recent period, per analysis by S&P Global Coal Market Intelligence.

The path for coal’s comeback is driven by President Trump’s dramatically different vision for the development and use of our nation’s energy resources. These riches are seen as a strength, not something to be kept in the ground. They are viewed as a means to achieve energy independence and provide energy security. The energy policy differences between the current administration and the prior one are most striking when it comes to coal, which the United States has more of than any other country.

The Trump administration started early this year to restore balance and fairness to the federal regulatory process, support job creation and strengthen energy independence. Actions by Congress and the president in February and March initiated the process of eliminating, rescinding or changing many federal regulations affecting coal production and use. Having been pushed through under the various guises of environmental benefits, regulatory streamlining and business planning certainty, they were simply sweeping bureaucratic maneuvers to increase the cost of coal and make it less competitive in the marketplace. Thus, the foundation has begun to be laid to rebuild and sustain our nation’s vital coal industry.

One regulation currently proposed for repeal by Environmental Protection Agency administrator Scott Pruitt is EPA’s rule for carbon-dioxide emissions reductions from the power sector, dubbed the Clean Power Plan by the prior administration.

EIA’s “Annual Energy Outlook 2017” analysis shows that 240 million tons of annual coal production will be maintained without the Clean Power Plan. The National Mining Association estimated that nearly 28,000 high-wage mining jobs and about 100,000 jobs throughout the supply chain will be saved without the Clean Power Plan.

Both Pruitt and Energy Secretary Rick Perry have been vocal about the need for fuel diversity in the power sector. Perry’s recently proposed rule to the Federal Energy Regulatory Commission urges appropriately valuing our nation’s important baseload generating resources, including coal, in wholesale electricity markets.

Many years of policy incentives for building wind and solar generation have increased the amount of these less efficient, intermittent electricity sources in our nation. FERC must act to counter this trend that is likely to expose consumers to diminished electricity system reliability and resilience and higher electricity prices in the absence of its action. Coal is a key fuel resource with proven reliability and resilience attributes. The price level and price stability of coal over time have been integral to affordable electricity in America.

In addition to these policy and regulatory changes on the domestic front, facilitating U.S. coal exports to the global marketplace is important to coal’s continuing recovery. International use of coal is growing as global electrification and urbanization increases. Preserving traditional export markets and finding ways to increase U.S. competitiveness to expanding markets has important corollary benefits, including enhancing our nation’s balance of trade and sustaining jobs in coal mining, transportation and shipping. A good example would be adding new port/terminal capacity on the U.S. west coast, which can ensure long term U.S. participation in the Asian markets.

Our coal is mined, shipped and consumed under the most stringent environmental and safety standards in the world. With the appropriate and overdue leveling of the playing field for coal in the federal policy and regulatory arenas, the rebound our industry is experiencing will continue. That will benefit both Americans and those beyond our borders.