Published on June 26th, 2017 | by Rogier van Rooij0
US Coal Mining Up By 19% In 2017 — Is Trump Fulfilling His Campaign Promise?
June 26th, 2017 by Rogier van Rooij
US Department of Energy data as reviewed by The Associated Press reveals that the US mined a staggering 19% more coal in the first 5 months of 2017 than during the same period in 2016. This is especially surprising given the developments of last year, when US coal was clearly dwindling.
In view of the overall trend of rapidly falling prices of large-scale solar and wind farms, and with myriad articles flooding the web about the cancellation of proposed coal plants and US mines shutting down, the new coal data comes as quite a bombshell. Given that coal-burning emission are responsible for 41% of all fossil fuel emissions, and that we are running out of time to meet the widely accepted 2° Celsius threshold, let alone the 1.5° target of the Paris Climate Agreement, there is extremely little room for relapses like these. If this revival of coal is more than a temporal spike, it will be consuming our wee carbon budget at a rate we simply cannot afford.
So, what is going on here? Are US president Trump’s vigorous efforts of bringing back coal jobs to America paying off? Going as far as pulling the US out of the Paris Climate Agreement does of course signal strong support to coal companies, and might lure them into investing in their facilities and hiring more miners. This surely will be Trump’s line of argument in response to the news, to be expected soon on his Twitter feed, but there are quite some reasons to impugn such a claim.
First of all, the surge has not been confined to the US. Production in other coal behemoths like China and India has been going up too, after falling in 2016. Through May, mining increased by no less than 121 million tons in the 3 countries combined, amounting to a 6% overall annual growth rate compared to last year.
That is not to say that the revival in these three countries, together covering 60% of global coal production, is due to one and the same cause. For China, analysts point to its higher than expected economic growth and therefore electricity demand, as well as the relaxation of stringent policies aimed at cutting back oversupply on the Chinese coal market. For India, coal growth is part of a larger push for increasing access to a stable electricity supply to more of its inhabitants, as 260 million Indians still are not connected to the grid. So far, the surge has thus been driven by strong global energy demand and coal’s ability to supply that in a quick and artificially cheap way.
In the US, where coal growth was concentrated in the mining states of Wyoming, Pennsylvania, and West Virginia, other factors have been at play as well, but those have little to do with Trump’s presidency. The combination of above-average energy demand resulting from a cold winter and spiking prices for coal’s substitute, natural gas, instigated the 19% mining increase. But with the USA’s large natural gas supplies, analysts don’t expect this to last much longer.
These recent developments do make clear that coal isn’t dead yet. When energy demand spikes, coal plants can quickly scale up electricity generation in response, preventing blackouts at low financial but high social costs by massively polluting the air and warming up the climate. This is not to say coal will maintain this position. With wind and solar prices hitting record lows every few months, and the grid becoming increasingly flexible, the macro trend of an incrementally dwindling coal sector is unstoppable. This implies that for long-term job creation, it is the last sector to focus on.