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Published on February 7th, 2019 | by Tina Casey

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Coal Under The Bus, State Of The Union Edition

February 7th, 2019 by  


The Intertubes have been buzzing over the total omission of the US coal industry from President* Trump’s State of the Union address earlier this week. Adding insult to injury, the Commander-in-Chief took the opportunity to wax enthusiastic over productivity in the US oil and gas industries. It’s almost like he wanted all those miners to feel the burn, amirite?

The blackout is interesting, considering that bringing back coal jobs was the centerpiece of Trump’s 2016 campaign message. Interesting, but not surprising. The state of the US coal industry is anything but rosy, and just this week another piece of bad news came hurtling down the pipeline.

More Bad News For Coal Miners

Reporter Taylor Kuykendall of SP Global has the scoop on the latest sign of permanent decline. Do follow the link for full details, but for those of you on the go it involves mining giant Peabody, which has just announced plans to reduce the output from its North Antelope Rochelle Mine in Wyoming to the tune of 10 million tons this year.

North Antelope happens to be the largest coal mine in the US. It accounted for just over 13% of thermal production in the US last year so yes, that cutback hurts.

If you caught that thing about thermal coal, that’s the problem. North Antelope produces fuel for power plants — aka thermal coal — and the US is rapidly losing its fleet of coal power plants to low cost natural gas and, more recently, to demand for renewables fueled partly by major US companies and investors that want low risk energy, aka clean energy. Then there’s that thing about pollution related to ash from coal power plants, but we digress.

Peabody has also announced plans to pull back on other operations in the US west. That includes the Kayenta mine in Arizona, which is slated to lose its best and only customer when the massive Navajo Generation Station closes later this year (however, officials of the Navajo Nation are still working on a longshot plan to keep the mine running so stay tuned for more on that).

Where were we? Oh right, US coal production. The export market could take up the slack, but other producers are already stepping in. Peabody itself, for example, has coal assets elsewhere around the globe to provide for overseas demand. In particular, according to Kuykendall the company plans to pump more money into its Australian assets for the export market.

No word yet on how many coal miners will lose their jobs due to the Peabody cutbacks. The Peabody investors are a whole ‘nother ball of wax, as Kuykendall explains:

Peabody has been directing much its cash flow to shareholder value programs, including $1.14 billion in buybacks over the past 18 months, which is equal to more than a quarter of the company’s total market capitalization. With $400 million remaining under its current share repurchase authorization program, management said they expect to continue to execute buybacks in 2019.

Whoa. Talk about picking energy winners and losers!

And Now For All The Good News About Coal

One relatively bright spot in the US coal industry is in the metallurgical sector, primarily meaning coal that is rendered into coke for making steel.

Well, maybe not so bright. Metallurgic innovators have been talking up alternatives to coal in steel making for a few years now. In one recent development, last fall a team from the MIT spinoff company Boston Metal demonstrated a system that uses electrolysis instead of a blast furnace.

MIT notes that the system is far from commercial viability. Even if it is scaled up, global steelmakers already have steelmaking assets that could last for decades, making it tough for competing systems to break through.

Regardless, another startup is venturing into the low-carbon steel waters. In a bonus for fans of renewable hydrogen, the Sweden-based consortium Hybrit is working on a steelmaking system that deploys hydrogen sourced from water, using renewable energy. The downside on that project is that customers will pay a premium of 20% to 30% for the finished product, though the partners anticipate that new carbon regulations in Europe will also raise the price of the competition.

So, why not just ditch steel altogether? There are signs that steel is going to face increased competition in some markets, though there is a long way to go. The US Department of Energy, for example, is a big fan of replacing conventional steel and iron car parts. Cross-laminated timber is also coming into vogue as a steel replacement in the construction industry.

Everybody Loves A Winner

Circling back around to that thing about Trump doing a backhanded dunk on coal during his State of the Union address, he really did rub it in. Our friends over at The Hill had a representative take on the dis:

Speaking at his State of the Union address, Trump emphasized the United States’s leading role in fossil fuel production and exportation, championing the country becoming the leading global producer of oil and natural gas during his tenure.

“We have unleashed a revolution in American energy — the United States is now the No. 1 producer of oil and natural gas in the world,” Trump told the crowd to applause.

That’s quite a turnaround from Trump’s State of the Union speech last year. Last January 30, the White House made a point of publishing 19 key passages from the 2018 SOTU, and coal made the cut:

We have ENDED the war on American Energy – and we have ENDED the War on CLEAN COAL. We are now an exporter of energy to the world.

Like they say, success has many fathers. Failure is an orphan.

Meanwhile, the western US isn’t the only region facing the loss of more coal jobs. The Appalachian state of Kentucky was among those experiencing a slight gain at the beginning of Trump’s term, but by the end of 2018 things took a gloomy turn.

According to one estimate, coal employment in Kentucky averaged 6,550 during the first months of the Trump administration in 2017, but it sunk to 6,381 midway through 2018.

If Trump is serious about bringing back coal jobs, he’ll have to do a lot better than that. After all, the number of coal jobs in Kentucky topped 18,000 just a few years ago, in 2011.

Follow me on Twitter.

*Developing story.

Photo (enhanced): Surface coal mine, Wyoming by Greg Goebel, flickr.com. 
 

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About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.



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