Published on December 12th, 2016 | by Tina Casey0
Coal Under The Bus, Part Infinity: Trump Likes Rex Tillerson For Sec’y Of State
December 12th, 2016 by Tina Casey
The Intertubes have been buzzing all weekend with news that Exxon Mobil CEO Rex Tillerson has nailed down the position of Secretary of State in the forthcoming Trump Administration, and for good reason. Aside from that one thing about climate change and that other thing about Exxon Mobil’s lobbying on behalf of Russia, Tillerson would be in a good position to pull the rug out from under the global coal industry.
That’s actually a good thing in terms of power plant emissions, but it makes you wonder how President-elect Trump is going to follow through on his promise to bring coal jobs back to the US.
Exxon Mobil: Natural Gas Vs. Coal
There’s a lot to unpack in the Rex Tillerson nomination, so let’s start with power plants.
For the record, natural gas is not off the hook when it comes to lifecycle global warming impacts and local environmental impacts, but it does provide a cleaner burn for power generation compared to coal.
The Obama Administration has promoted natural gas as a cleaner fuel, but the Administration has also taken a lot of heat from the fossil fuel industry over its support for renewable energy, which they blame for the sharp demise of the U.S. coal industry.
However, industry observers concur that the availability of cheap natural gas has been the main culprit in terms of replacing coal for power plants. Renewables will play a larger part in the future, but for now they are barely registering.
The latest analyst to chime in on the natural gas angle is Brookings, which has just issued a report exploring how more than 30 U.S. states have managed to increase GDP while decreasing carbon emissions.
When the shale gas boom began to sour a couple of years ago Exxon Mobil made some big moves into US natural gas fields, and it looks like that has paid off.
What About The Coal Export Market?
The US coal industry has been banking on overseas sales to staunch the bleeding in the US, but for a variety of reasons the coal export market has been collapsing.
One of those reasons is the growing global shale gas market. Like its domestic cousin, shale gas has been promoted by the Obama Administration as a solution for climate change as well as a means to enable Eastern Europe to reduce its dependency on gas imports from Russia.
Unfortunately, it seems that Eastern Europe lacks sufficient reserves and infrastructure to sustain a vigorous shale gas industry. In an ominous move, last summer Exxon Mobil dropped its shale gas exploration activities in Poland.
That means the scales could tip back in favor of dependency on gas from Russia. The question is whether as Secretary of State, Tillerson would push for policies that continue to favor Russia, or that enable Eastern Europe to seek alternative sources.
Coal, Oil And The China Factor
One primary reason for the decline in US coal is the collapse of the coal market in China, and the availability of more economical reserves in Australia and elsewhere.
That situation is not going to change any time soon, if ever.
The prospects for a US coal industry revival are even more slim when you consider the dim prospects for the construction of new coal terminals in the US.
For example, the industry suffered a nasty blow this year when the US Army Corps of Engineers declined to issue a permit for the proposed Pacific Gateway coal terminal in Washington State.
Among its concerns, USACE cited the impact on tribal lands and legally binding tribal agreements.
With Tillerson as Secretary of State, the Trump Administration would have little incentive to intervene on behalf of the coal industry when controversial projects like Pacific Gateway are on the table.
That’s a sharp contrast with Trump’s statements on controversial energy infrastructure projects related to ExxonMobil’s business. The President-elect has sent strong signals that he will push for approval of the currently suspended Keystone XL tar sands oil pipeline, as well as the Dakota Access pipeline.
If you can find any statements from the Trump camp about supporting the Pacific Gateway terminal, drop us a note in the comment thread.
Meanwhile, if Rex Tillerson does get the nomination, look for the coal industry — and others outside of the environmentalist sphere — to put up a tough fight in his confirmation hearings.