In­dus­try has seen only mod­est gains in jobs and pro­duc­tion this year - much of it from a tem­po­rary uptick in for­eign de­mand

The Gulf Today - Business - - FRONT PAGE -

WASH­ING­TON: A year af­ter Don­ald Trump was elected pres­i­dent on a prom­ise to re­vive the ail­ing US coal in­dus­try, the sec­tor’s long-term prospects for growth and hir­ing re­main as bleak as ever.

A Reuters re­view of min­ing data shows an in­dus­try that has seen only mod­est gains in jobs and pro­duc­tion this year - much of it from a tem­po­rary uptick in for­eign de­mand for US coal rather than pres­i­den­tial pol­icy changes.

US util­i­ties are shut­ting coal­fired power plants at a rapid pace and shift­ing to cheap nat­u­ral gas, along with wind and so­lar power. And do­mes­tic de­mand makes up about 90 per cent of the mar­ket for US coal.

“We’re not plan­ning to build any ad­di­tional coal fa­cil­i­ties,” said Melissa Mchenry, a spokes­woman for Amer­i­can Elec­tric Power, one of the largest US util­i­ties. “The fu­ture for coal is dic­tated by eco­nomics … and you can’t make those kinds of in­vest­ments based on one ad­min­is­tra­tion’s pol­i­tics.” Coal plants now make up 47 per cent of AEP’S ca­pac­ity for power gen­er­a­tion, a fig­ure it plans to shrink to 33 per cent by 2030.

The sit­u­a­tion high­lights the lim­i­ta­tions of pres­i­den­tial pol­icy on ma­jor in­dus­tries and global eco­nomic trends. As some en­ergy ex­perts have said all along, the forces that will make or break min­ing are well be­yond the pow­ers of the Oval Of­fice.

A White House of­fi­cial did not re­spond to a re­quest for com­ment.

Trump has likely done all he can do to help the in­dus­try, said Luke Popovich, a spokesman for the Na­tional Min­ing As­so­ci­a­tion, which rep­re­sents ma­jor US coal com­pa­nies.

“The gov­ern­ment is no longer against us,” he said. “We now only have mar­ket forces to con­tend with.” Trump has taken ac­tion on many prom­ises he made to coal in­ter­ests in states that helped him win the elec­tion.

The pres­i­dent started the process of killing for­mer Pres­i­dent Barack Obama’s Clean Power Plan, meant to re­duce car­bon emis­sions from power plants; ended an Obama-era mora­to­rium on coal leas­ing on fed­eral lands; ditched lim­its on dump­ing coal waste into streams; and started with­draw­ing the United States from the Paris Cli­mate Agree­ment.

Now Trump’s En­ergy Sec­re­tary, Rick Perry, is at­tempt­ing to push a rule through the in­de­pen­dent Fed­eral En­ergy Reg­u­la­tory Com­mis­sion that would sub­si­dize power plants that store at least a 90-day sup­ply of coal on site. The goal is to ex­tend the life of some coal burn­ing power plants, a move Perry says will make the elec­tric grid more re­li­able.

While the full im­pact of Trump’s coal pol­icy could take years to un­der­stand, the changes so far are un­likely to boost do­mes­tic de­mand, en­ergy an­a­lysts and util­ity of­fi­cials said.

Trump has cast the coal in­dus­try as a vic­tim of bur­den­some reg­u­la­tion.

The in­dus­try has lost more than 40 per cent of its work force in less than a decade and seen pro­duc­tion drop to its low­est lev­els since 1978. Its share of the power mar­ket has fallen to less than a third from about half in 2003.

“We’re go­ing to bring the coal in­dus­try back 100 per cent,” Trump said at a rally in Vir­ginia in Au­gust of 2016.

So far, progress has been lim­ited.

US coal pro­duc­tion is on track to rise more than 8 per cent in 2017 over the pre­vi­ous year, to 790 mil­lion tonnes, ac­cord­ing to the En­ergy In­for­ma­tion Ad­min­is­tra­tion. But 2018 out­put is ex­pected to de­cline.

The num­ber of coal min­ers has also risen slightly to 51,900 in Oc­to­ber, up about 2,200 since Novem­ber 2016 - but down about 70 per cent from a 1985 peak, ac­cord­ing to the Labor Depart­ment.

On Novem­ber 1, Trump cited the mod­est pro­duc­tion in­creases in a Tweet, say­ing, “It is fi­nally hap­pen­ing for our great clean coal min­ers!” But th­ese in­creases are largely at­trib­ut­able to de­mand for US coal from Asian steel mills af­ter tem­po­rary out­ages from their usual sup­pli­ers in Aus­tralia, ac­cord­ing to James Steven­son, a coal an­a­lyst at IHS Markit.

Dur­ing the first six months of 2017, Asian coun­tries took in 7.5 mil­lion short tonnes of US coal, up 97 per cent over the same pe­riod in 2016, ac­cord­ing to the EIA.

That de­mand will soon fade, Steven­son said.

“We are not go­ing to get a re­peat of 2017,” he said of the spike in ex­ports.

Fore­casts from util­i­ties and the US gov­ern­ment re­veal lit­tle rea­son for hope of a sus­tained coal re­bound.

Util­i­ties are ex­pected to shut down more than 13,600 megawatts of coal plant ca­pac­ity in 2018. That fol­lows a loss of nearly 8,000 MW this year and 13,000 MW in 2016, ac­cord­ing to EIA and Thom­son Reuters data.

Earth mov­ing equip­ment sits by a coal pile at the Cen­tury Mine in Beallsville, Ohio.

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