This is probably not what the US coal industry had in mind when it lobbied — successfully — to put a President Donald Trump in charge of US energy policy. ExxonMobil has just dropped a tweet in support of putting the Paris climate agreement into force. Connect the dots, and that means the Trump Administration is poised to throw coal under the bus.
The ExxonMobil Climate Change Tweet
McCarron tweeted, “The Paris agreement is an important step forward by governments in addressing the serious risks of #ClimateChange.”
She also linked to the company’s official statement on the Paris climate agreement. Here’s a snippet:
ExxonMobil supports the work of the Paris signatories, acknowledges the ambitious goals of this agreement and believes the company has a constructive role to play in developing solutions.
At first glance the message seems like a giant step in the right direction for ExxonMobil.
The company has been heavily criticized for supporting organizations that deny the phenomenon of human-induced climate change.
ExxonMobil is also facing a huge legal battle related to shareholder disclosure, as evidence has surfaced that the company has been sitting on a pile of research on climate change for the past 40 years or so.
However, ExxonMobil has not exactly had a change of heart.
The company is popularly known for its long history in the petroleum industry, but its recent moves into the shale gas sector indicate how it intends to stay afloat in a decarbonized economy.
ExxonMobil has taken a soup-to-nuts approach, buying up shale gas reserves like candy and also investing in gas-to-plastics facilities.
Dot #1: Natural Gas Vs. Coal
President-elect Trump and his supporters have long argued that President Obama’s renewable energy policies killed off coal jobs, but energy industry observers are in agreement that cheap natural gas is the real culprit.
The low cost of natural gas in the US is a direct result of the domestic shale gas boom. Not to split hairs (but we will anyways), the Obama Administration had nothing to do with that. It was touched off by the Bush Administration, which orchestrated a loophole in federal water safety regulations. That loophole enabled the fracking industry to take off like a rocket.
Closing the loophole would require an act of Congress, so it has continued to this day (the EPA has exercised some limited executive authority over the fracking industry, but that’s a weak substitute).
So, here we have the first dot. ExxonMobil’s romp through the shale gas sector is directly related to the southward slide of the US coal industry.
That pressure will continue regardless of new federal policies that are unfriendly to renewable energy.
Dot #2: Natural Gas Is Cleaner Than Coal (Or Not)
To be clear, the Obama Administration has supported natural gas as a cleaner alternative to coal. The idea is that natural gas is a less destructive “bridge” fuel until the renewable marketplace catches up.
That’s a matter of argument, but in the meantime ExxonMobil has been happy to push that message along into the future.
In 2013, the company released a lifecycle study concluding that the carbon footprint from natural gas operations is significantly below that of coal.
The company’s “Energy Factor” newsletter also offers up a whole raft of charts making the case for natural gas over coal for the long run, in the context of climate action. Here’s the money quote:
In a world characterized by increasing prosperity, growing energy use, and an expanding push to cut greenhouse gas emissions, natural gas will be one of the most important sources of energy to meet the needs of the future.
Trump or no Trump, ExxonMobil will continue to do whatever it can to push coal out of the global marketplace.
Dot #3: The Shale Gas Fox Might Be Guarding The Coal Chickens
The real tell is going to be who gets tapped as incoming Energy Secretary. We’ll know for sure soon. In the meantime, it looks like the coal industry is not going to get an inside man.
Early in the presidential campaign oil-and-gas tycoon Harold Hamm wrangled the position of “informal” advisor to Donald Trump on energy policy. Forbes magazine got Hamm to sum it up:
“America will thrive during a Donald Trump presidency,” says Hamm. “I can tell you now that we will be energy independent.”
So, who is Harold Hamm?
Bloomberg News has dubbed Hamm the “Shale King” for his ventures in shale drilling under the umbrella of Continental Resources, where he is Chairman and CEO. The company is known mainly for its shale oil operations, though it is also involved in the shale gas field.
Here’s a snippet from Bloomberg:
Hamm said Trump has been earnestly listening to his ideas, dating back to a 30-minute discussion of the American energy renaissance in 2011. Trump may not come off to the public this way, “but he’s someone who is very willing to listen to folks that he believes,” the oil executive said.
His top advice? Remove regulatory barriers to energy development and shift the U.S. approach to fossil fuels.
That train has already left the station, at least in terms of coal development. Natural gas will continue to replace coal plants in the US, regardless of federal intervention in the renewable energy marketplace.
The export market doesn’t promise much hope for the US coal industry, either. Global demand will continue to condense as the Paris climate agreement takes force. Combine that with local opposition to new coal export terminals in the US, and the industry is facing a very bleak future under the next president.
Last summer, rumors were swirling that Hamm would be tapped as incoming Energy Secretary, so stay tuned.
Images: Photo by Kimon Berlin via flickr.com, creative commons license; screenshot via Twitter.