All year, Donald Trump has been promising to rescue the US coal industry by repealing various Obama-era pollution rules and ending the “war on coal.” And all year, analysts have pointed out that he probably can’t stop the collapse of the coal industry — since coal’s woes go far beyond the Environmental Protection Agency.This fits with what the TVA announced last year, that they would finish closing 26 of their 59 coal-fired plants by the end of 2016, far ahead of any Federal requirement. They offered the same reason: natural gas is cheaper and cleaner.
But if you want a perfect example of why Trump will struggle to bring back coal, just look at Michigan.
Last weekend, the CEO of Michigan’s largest electric utility reiterated that his company is still planning to retire eight of its nine remaining coal plants by 2030 — whether or not Trump tries to repeal President Obama’s climate policies. “All of those retirements are going to happen regardless of what Trump may or may not do with the Clean Power Plan,” DTE Energy’s Gerry Anderson told MLive.com’s Emily Lawler.
Anderson’s reasoning was simple. Coal is no longer the economic choice for generating electricity, due to relentless competition from cheaper (and cleaner) natural gas and wind power. In Michigan, a new coal plant costs $133 per megawatt hour. A natural gas plant costs half that. Even wind contracts now cost about $74.52 per megawatt hour, after federal tax credits. “I don't know anybody in the country who would build another coal plant,” Anderson said.
Not only are natural gas plants cheaper, they can be much smaller, and therefore nimbler, leaner, more dancing in the chaos, whatever trendy business buzzword you prefer. It simply makes no sense for any company to sink a billion dollars of capital into a huge coal-fired plant when the future market looks both unprofitable and highly uncertain.
So coal production will continue to fall, and coal mining employment will fall even faster, since companies are responding to falling demand by closing the most labor-intensive mines first.
And all of this is happening before a single provision of Obama's Clean Power Plan comes into effect. In fact we may fulfill the overall goal of that plan – a 30% cut in emissions from generating power by 2030 – next year. It certainly might be true that having Obama's plan hanging out there is part of the calculus that makes new coal-fired plants look dubious to utility executives, but since there is bound to be another Democratic president eventually, just repealing Obama initiatives won't remove that uncertainty.
These are the headwinds that Trump and his voters are running into: both the environmentalism of the left and the free capitalism of the Paul Ryan Republicans are pushing America away from coal, and it would take a massive government commitment to push back effectively.