NATURAL GAS, COAL CONFRONT HARSH ECONOMIC REALITIES
WASHINGTON — Four years ago, President Donald Trump promised to “bring back” coal as part of his campaign pledge to “make America great again.”
As the 2020 election enters its final sprint, a blitz by top administration officials through the Pittsburgh region have only highlighted the economic challenges of reviving the mining sector: Cheap natural gas, coupled with depressed energy prices due to the COVID-19 pandemic, will continue to push coal to the side, industry analysts say.
Mr. Trump’s Cabinet secretaries — the heads of energy, commerce and housing and urban development — have ramped up their Western Pennsylvania visits to touting policies with a backdrop of local institutions and officials weeks before Election Day.
But with the COVID-19 pandemic dragging on and the economy in a funk, the Trump administration’s promises have confronted harsh realities.
The coal industry is a prominent example of those complications. Coal usage in the power plant — a major source of demand for the mineral — continues to wane as electric utilities switch to the lower-cost and cleaner-burning natural gas.
And meanwhile, the pandemic has hit the gas drilling industry, which has boomed with the invention of fracking in Western Pennsylvania in the 2000s.
“We continue to face a host of challenges triggered by COVID-19, but I’m here to tell you we are meeting these challenges headon at every turn,” Energy Secretary Dan Brouillette told a virtual gathering of the the Shale Insight 2020 Conference on Sept. 29.
“Under President Trump’s leadership, we see jobs returning and energy prices stabilizing as we reopen our economy safely and responsibly,” Mr. Brouillette said.
The week before the natural gas conference, the secretary spent two days around Pittsburgh, touring the Royal Dutch Shell petrochemical plant construction site and visiting Carnegie Mellon University to host a “fireside chat” about artificial intelligence.
And two weeks after it, Mr. Brouillette traveled to Johnstown and Erie on Oct. 15 — within days of Mr. Trump’s campaign visits to both locations — to discuss the “Appalachian energy renaissance” that has unleashed “enormous growth potential for energy, manufacturing, and science sectors.”
Supply and demand
Every president has dispatched top officials to highlight areas of the country where good things are happening because of administration policies. But economic recovery is slow or uneven in the region, and new cases of the virus surge in many other states.
For the energy sector, Mr. Trump’s promises to bolster natural gas by removing regulations — like those on methane pollution — while also reviving coal jobs that are limited by the economics, industry analysts point out.
Coal and natural gas are both closely linked to supply and demand.
As demand has dropped for coal, mines continue to become dramatically more efficient with new technology over the decades, a trend that is seen broadly across sectors in manufacturing.
In 1980, Pennsylvania mines employed 35,000 workers and produced 2,482 tons of coal for every one miner employed, according to figures compiled by the Pennsylvania Department of Environmental Protection. By 2018, statewide mining employment had shrunk to 3,735, with 11,951 tons produced for every one miner.
Last week, Moody’s Investors Service published commentary that found “demand for thermal coal used in power plants would continue to decline in the 2020s “regardless of the winner of the presidential election,” driven by a “combination of factors including persistently low natural gas prices, increasing emphasis on renewable energy and longterm regulatory uncertainty.”
Surviving disruption
Drillers, who took on mountains of debt to finance the drilling of wells and related infrastructure, have suffered with the steep decline of energy prices during the pandemic.
In April, natural gas drillers asked the government for access to Federal Reserve loans, portraying the need for public funding as a “bridge to help survive this economic disruption,” wrote Barry Russell, president and CEO of the Independent Petroleum Association of America.
At the virtual natural gas conference, Mr. Brouillette spent much of his keynote speech discussing how opponents to fracking seek to wipe out the industry. The conference, which is usually held inperson in Pittsburgh by the Marcellus Shale Coalition, gave the podium to Mr. Trump in 2016 and 2019.
“There’s no reason to ban a single fuel we have, the technology to produce it, or the means to deliver it,” Mr. Brouillette said, their mindset was one of “radicalism as opposed to reality.”
“We must continue removing unnecessary regulations on energy,” he insisted.
In the last month, Mr. Brouillette has dropped by other key battleground states of Michigan, Wisconsin, North Carolina and Ohio — playing up the promise of a new petrochemical plant in Eastern Ohio during his visit to the Buckeye State.
Mr. Brouillette — while he did not
mention coal during his speech at the gas conference — visited a mine in Montana to talk up coal production and visited Lambert’s Point Coal Terminal in Norfolk, Va. The terminal, which processes more than onethird of U.S. coal exports, was a signal that much of the growth in coal would continue to be abroad.
A moonshot
Beyond energy, the Trump administration has sought to use the
Pittsburgh region to show areas of success.
Pittsburgh hosted Commerce Secretary Wilbur Ross last week to speak at the launch of Astrobic’s new 47,000square-foot headquarters on the North Side. Mr. Ross praised the space robotics company’s commitment to serve as the national hub for lunar logistics.
Mr. Ross also touted his department’s aid in helping to facilitate contracts with customers in seven other countries. He recalled his recent meeting with the National Space Council to discuss a return to the Moon by 2024 and policies that keep U.S. space companies competitive.
“The Trump administration will continue its advocacy on your behalf,” Mr. Ross said, not mentioning the pandemic’s effect on the economy.
Mr. Ross’ promises on business protections extend to steel.
In May, Mr. Ross agreed to investigate whether imports of electrical steel were a threat to national security on behalf of the Butler Works in Butler County. The findings of that investigation are expected to be finalized before Election Day, five trade staffers on Capitol Hill have said.
‘This, too, will pass’
Ben Carson, secretary of Housing and Urban Development, has visited the region twice this year.
In July, he stopped in McKees Rocks to talk about a voucher program for people aging out of foster care. This month, he traveled to McKeesport for a closeddoor meeting with city officials and business leaders to discuss the Financial Opportunity Zone program, which provides tax incentives to people who invest in economically distressed areas.
But he, too, confronted COVID-19 questions about what HUD could do to help renters and stop evictions.
“This, too, will pass,” he said in an interview with KDKA in July. “We have to bridge the gap without allowing the financial infrastructure of the country will be destroyed.”