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By Stephen Lee
Coal will not return to dominance in the energy sector even with President Donald Trump’s regulatory rollbacks, said a new report claiming to be the first empirical study of the issue.
“Coal’s not coming back,” said Jason Bordoff, a report co-author who was 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, released April 25 by Columbia University’s Center on Global Energy Policy, found that implementing Trump’s executive orders to review or rescind Obama-era environmental regulations might stunt the decline in U.S. coal demand, but it won’t reverse it, even if natural gas and renewable energy prices start to rise.
Competition from cheap natural gas has been responsible for 49 percent of the decline in U.S. coal consumption, the paper found. Weaker-than-expected electricity demand has accounted for another 26 percent.
In a worst-case scenario for coal jobs, coal production could fall as low as 600 million tons a year, down from 1 billion in 2013, the paper found.
Trump’s various promises about bringing back coal jobs also aren’t realistic, the paper found. By 2020, coal employment will range between 70,000 to 90,000 jobs, sharply down from historical levels, it said.
Since taking office, Trump has called for a freeze on all new regulations pending review, struck down the Interior Department’s stream protection rule meant to limit pollution from coal mines in nearby waterways, and taken the first steps toward rolling back the Clean Power Plan, which would limit carbon emissions (and thus coal use) from power plants.
Bordoff, now an international and public affairs professor at Columbia, also told Bloomberg BNA that the Obama-era rules Trump has rescinded would have brought about significant environmental benefits.
But Luke Popovich, a spokesman at the National Mining Association, said the report missed the point.
“I think we again see the straw man being knocked down: The issue isn’t whether coal can reclaim its 51 percent of the power market, not after the advent of the shale gas boom,” Popovich told Bloomberg BNA. “But it can revive to serve a strong and needed role in the U.S. energy economy. This report appears to acknowledge as much without saying it.”
Popovich also said natural gas prices have risen from $2 per one million BTUs in April 2016 to $3.33 last month. During that same period, coal production rose by 17 percent, Popovich said.
He also pointed to a 2013 Duke University paper finding that, “while natural gas had threatened less than 10 percent of coal power plants, regulations like MATS threatened half of them,” referring to the Obama administration’s power plant mercury standards.
Tom Sanzillo, finance director at the Institute for Energy Economics and Financial Analysis, said the Columbia paper didn’t go far enough in its gloomy forecast for coal production.
The paper relies on Energy Information Administration forecasts of natural gas prices, which Sanzillo said are historically too high.
Even if natural gas prices doubled, those high prices would have to hold steady “for a long period of time” before capital markets started getting re-interested in coal, Sanzillo told Bloomberg BNA. “And that’s a wild assumption.”
And many investors and utilities have already locked in big bets on other energy sources, according to Sanzillo.
“There’s no indication that the utility industry is barking to use more coal,” he said. “Their capital expenditures are all directed toward wind, solar and natural gas as a way to address how their grids are going to be served.”
To contact the reporter on this story: Stephen Lee in Washington, D.C., at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Connolly at PConnolly@bna.com
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