Published on April 28th, 2017 | by Joshua S Hill0
Can Coal Make A Comeback? No. No It Can’t. — Columbia Center On Global Energy Policy
April 28th, 2017 by Joshua S Hill
A new report published by Columbia University’s Center on Global Energy Policy has concluded that no amount of regulatory rollbacks and policy decisions made by Donald Trump’s administration will be able to succeed in bringing back coal jobs.
“Coal’s not coming back,” said Jason Bordoff, a report co-author, who also served as President Barack Obama’s special assistant for energy and climate change. “We’re not bringing back coal jobs, even if you roll back a bunch of environmental rules. It’s important for policy makers to not give people false hope about that.”
The report, Can Coal Make A Comeback?, was published earlier this week by Columbia University’s Center on Global Energy Policy, and claims to be the first empircal study on the matter. The report concluded that, even if all of Donald Trump’s executive orders to review or rescind Obama-era environmental regulations are implemented, the decline in US coal demand might soften somewhat, but it won’t reverse the decline. Even if natural gas and renewable energy prices start to rise, there is no real hope for coal.
The report highlights competition from cheap natural gas in the United States can be held accountable for 49% of the decline in US coal consumption, while weaker-than-expected electricity demand also accounted for another 26%. Renewable energy growth is responsible for 18%. Increasing competition from renewable energy has been driven by declining prices, with solar costs falling 85% between 2008 and 2016, and wind costs falling by 36% over the same period.
Further, the authors of the report explain that “Changes in the global coal market have played a far greater role in the collapse of the US coal industry than is generally understood.” US coal exports are in much less demand, especially with countries such as China and India making concerted efforts to reduce coal imports — and Australia providing a much closer and cheaper option than the United States anyway. “While global coal markets have recovered slightly over the past few months due to supply restrictions in China and flooding in Australia, we expect this rally to be short-lived,” the authors note. Downward pressure on global coal prices are expected to continue, and will only serve to further limit export opportunities for US coal.
If all of President Trump’s executive orders are implemented, a softening of the decline in US coal consumption is possible, “but only if natural gas prices increase going forward.” If natural gas prices remain where they are, or renewable energy costs continue to decline at the rate they have been lately, “US coal consumption will continue its decline despite Trump’s aggressive rollback of Obama-era regulations.”
In the end, the best case scenario seen by the authors of the report is a modest recovery to 2013 levels of just under 1 billion tonnes a year. However, under the worst case scenario, output falls to 600 million tonnes a year. The employment scenarios range from 70,000 to 90,000 in 2020, and 64,000 to 94,000 in 2025 and 2030 — “lower than anything the US experienced before 2015.”
“These findings indicate that President Trump’s efforts to roll back environmental regulations will not materially improve economic conditions in America’s coal communities,” the authors note, warning that it is important not to give coal families and employees a false hope over their future. The paper lays out recommendations for measures the government can take to safeguard the future pensions and health security of current employees.