Even now, no country for coal men
Trump’s climate action provides little relief for industry
HOMER CITY, Pa. — Every morning is filled with anxiety in this hardscrabble town so intertwined with the fortunes of its hulking coal power plant that a drawing of the facility is emblazoned on the community’s police force emblem.
Locals look out their windows to see if there are clouds drifting from its massive smokestacks, indicating the plant is still running. If they don’t see any, they wonder if plant owners have thrown in the towel.
“Everyone gets concerned when they wake up and don’t see smoke coming out,” said Rob Nymick, manager of a 1,7000-resident borough that he says will be economically “crushed” if the plant goes dark.
As the Trump administration dismantles one of the world’s most aggressive programs to confront climate change, it is invoking the suffering of communities like this one, where the brawny coal power plant that anchors the local economy teeters on insolvency.
Yet as the Trump administration declares an end to what it calls the “war on coal,” Homer City isn’t any less under siege.
The plant here remains an albatross to investors, and a source of increasing anxiety to the hundreds of Pennsylvanians who rely on it for their livelihood. It is likely to remain a loser financially no matter how far Trump goes in rolling back regulations.
“I’m not sold on the fact that the war on coal is putting that power plant out of business,” said Nymick, pointing to struggles to compete with cheaper natural gas, solar and wind energy. “You don’t know what to believe or who to believe.”
“The Clean Power Plan is not what hurt coal,” said Michael Wara, a professor of energy law at Stanford University. “It is hard to hurt someone more when they were already mortally wounded.”
That’s put the administration in an awkward place. Even after straining to show the repeal of the Obama-era rules would boost the economy by baking into their plan financial assumptions that many experts dispute, their plan as written still doesn’t do much for the coal industry.
A coal revival requires more than a Clean Power Plan repeal. It requires an outright bailout, an even less politically popular option, that the administration is also pushing. The Energy Department’s plan to force regional electricity grids to purchase large amounts of coal, unveiled days before the Clean Power Plan repeal was made public, is getting a hostile reception. Oil and gas companies are joining solar and wind advocates in working aggressively against it.
“The entire energy economics and energy law community thinks it is a crazy proposal,” Wara said of the subsidy plan. “I have not met anyone who does not have serious problems with it.”
It all leaves communities like Homer City in the lurch. At its peak, the Homer City Generating Station provided enough electricity to power two million homes daily. The plant generates hundreds of millions of dollars in economic activity each year.
Now it has just emerged from its second bankruptcy, and many days it is running well below half capacity. Layoffs are underway, and the consortium of bondholders saddled with the asset are scrambling to find someone — anyone — to buy it. A plant valued at $1.8 billion two decades ago now might not fetch a quarter that price.
Coal broker David Osikowicz applauds the Trump administration’s enthusiasm for his industry, but even he questions what the demise of the Clean Power Plan will do to save it.
“When President Obama said five years ago that you can keep burning coal, but you will go broke doing it, my instinct was to liquidate,” said Osikowicz, standing in his eerily quiet coal yard in Punxsutawney, where most of the staff has been laid off. “Unfortunately, I didn’t do that. Now reality has triumphed over wishful thinking.”
Like many others in coal country, Osikowicz feels strongly that mounting government regulations over the years sunk the region, creating burdens on coal that ultimately became insurmountable when the prices of natural gas plunged. But he also says Trump has over-promised.
“I think he meant well when he said we are going to bring back coal, we are going to bring back the steel (mills) in Pittsburgh,” Osikowicz said. “Do I think that is going to happen? No.”
His brother Mark, who works loading coal in the yard, tries to take a more optimistic view. “We’ve had 24 years of presidents working against us,” Mark said. “It will take more than four years to bail us out.”
David Osikowicz is left hoping the long-shot subsidy plan the administration is proposing will prevail. He argues, like Energy Secretary Rick Perry, that regulators have favored the expansion of natural gas at the cost of national security and electricity grid resiliency.
It’s a popular view in coal country, but has little support outside of it. There’s also a lot of skepticism about the impact of repealing the Clean Power Plan.
“In order to justify this, they do serious violence to established economics,” Richard Revesz, dean emeritus at New York University School of Law, said of the repeal. “The level of contortions and the attacks on standard economic principles are unprecedented.”