Trump & EPA Are Saving The Coal Industry, Right? Well, Not Really and Here's Why

When Donald Trump campaign for President in the 2016 election, he made great promises to coal miners that he would bring coal back in a big way. His promises enabled him to defeat Hilary Clinton in the key coal producing states of West Virginia, Kentucky and Pennsylvania. So has he delivered on his promises? The answer is that he’s likely slowed the decline but probably cannot stop it.

Since Trump’s election, there was a short-term increase in coal mining jobs, roughly 2000 at its peak; however, by the end of 2017, that number was down to about 900….and falling. The increase was due to EPA removals of government subsidies for fracking of methane gas used for power in lieu of coal. However, this increase has been offset with continued decline in power plant usage of coal due to increasing use of renewable energies like wind and solar sources. In fact, coal production was up slightly in 2017 by 6% to 774 million tons, but consumption was slightly below 2017 levels at 717 million tons. More concerning, domestic coal consumption is almost all in the power sector and coal’s % of the power sector was 30%—the lowest ever on record. Said differently, the power sector is growing while coal’s % of it is declining.

A recently published article in Scientific American outlined some of the dynamics behind the scenes for the coal industry. In short, the economics suggest that the cost to operate coal power plants is now higher than the cost of operating solar or wind power facilities. Further, renewable energies are actually less expensive for power generation than both gas and coal powered energy plants in many parts of the U.S.:

On-Shore Wind Farm Power Plant Costs: $29-$56 per Mega Watt Hour

Solar Power Plant Costs: $36-$44 per Mega Watt Hour

Coal Power Plant Costs: $60-$143 per Mega Watt Hour

Natural Gas Power Plant Costs: $41- $74 per Mega Watt Hour

In addition, wind and solar costs continue to decline, some 7% and 13% respectively in 2017. Moreover, solar and wind are expected to grow to be 2/3 of all new power plant builds by 2040. So, obviously the trends do not bode well for the coal industry’s future.

Diversification will still be important with the expected increase in power usage for the U.S. in the future, but it’s hard to believe that coal will make a comeback, unlike the promises made by the Trump Administration.