While the battle rages over whether there’s a war on coal and who’s to blame, Kentucky lost another 216 mining jobs during the first three months of this year, according to quarterly figures from the Kentucky Energy and Environment Cabinet.
A new report by the Columbia University Center on Global Energy Policy sorts out the reasons for the decades-long mining decline. It concludes that people in coal country would be better served if political leaders would act on reality rather than rhetoric.
People in coal country would be better served if political leaders would act on reality rather than rhetoric. Click To Tweet
“Despite promises from the federal government for a quarter century to provide worker retraining, education, and other support to help communities displaced by globalization and displacement, both parties have failed to fulfill those promises,” reads the report.
The report titled “Can Coal Make a Comeback?” continues, “The responsible response from policy makers is to be honest … about the causes of coal’s decline and unlikeliness of its resurgence—rather than offer false hopes that the glory days can be revived.”
The report details the reasons for a declining coal industry, from the often-mentioned competition from low natural gas prices to the less-noted slowing of the economy of China. It even assigns percentages to each reason for coal’s hard times. Totaling those numbers finds that 93 percent of the reason for coal’s decline has little to do with environmental regulations, despite President Trump’s campaign pledge to “save the coal industry” by reversing President Obama’s rules to limit greenhouse gas emissions.
The analysis finds that 49 percent of the reason for the decrease in U.S. coal production in the past six years results from the huge drop in natural gas prices since 2008. Another 26 percent of the reason comes from lower-than-expected demand for electricity, and 18 percent from growth in renewable energy.
Those trends cut the number of U.S. coal jobs nearly in half since 2011, from 132,000 to 73,000 in 2016. The best-case scenario for reversing those trends, says the report, would only return the nation to the 2013 level of 94,000 jobs. That scenario depends on everything plausible going right for coal, especially an increase in natural gas prices. Under the worst-case for coal, the model used for the report sees coal jobs continuing a decline to 64,000 by 2030.
Either of those forecasts, says the report, is “a far cry from what’s needed to provide America’s coal communities the future they have earned and deserve.”
The report’s description of the forces hurting the coal industry makes a persuasive case that the most significant of the trends will likely continue:
- Natural gas prices paid by power plants fell 71 percent since 2008 as fracking and other new drilling techniques “transformed the energy landscape.” Coal prices declined only 8 percent during that period, prompting utilities to switch fuels.
- Electricity demand fell after the 2008 recession and still has not recovered, even as the economy has grown. Efficient light bulbs, building standards, and other less-intensive ways to use energy have become widespread enough to dampen electricity use. Last year, for example, while the U.S. economy expanded 1.6 percent, electricity consumption fell 1.2 percent. That matters since nearly all the coal mined in the U.S. is used for electricity.
- Renewable energy costs joined the natural gas trends to compete with coal. Improvements in technology have reduced costs for wind generation 36 percent since 2008 and 85 percent for solar.
- Environmental regulation is responsible for only about 3.5 percent of the decline in coal production, according to the report’s model. The report analyzed 10 Obama-era regulations affecting emissions including nitrous oxide, sulfur dioxide, mercury, and greenhouse gases. It concludes that while the rules do have a meaningful effect, “It’s a relatively small share.”
- China’s economy provides a story of a dramatic tragedy for coal. In 2011 coal’s future looked so bright, in part because of the energy-intensive building boom in China, that four major U.S. coal companies poured nearly $19 billion into serving overseas markets. The boom didn’t last and China’s economy shifted away from heavy industry and toward non-coal forms of energy. “This slowdown in China sent shockwaves through global coal markets that reverberated within the United States,” says the report. In 2015 the four U.S. coal companies that bet on China filed for bankruptcy. That has implications for Kentucky miners today, as the pensions and health benefits of those companies face an uncertain future.
“These findings indicate that President Trump’s efforts to roll back environmental regulations will not materially improve economic conditions in America’s coal communities,” says the report. “Rather than bet on a mining recovery that may never arrive, it makes more sense for coal communities, government, and other private and public sector organizations to come together … to attract new sources of job creation and economic growth.”
The report cites examples like the SOAR (Shaping Our Appalachian Region) initiative of Rep. Hal Rogers and former Gov. Steve Beshear that featured a project to expand broadband access throughout Kentucky.
The report concludes, “We must redouble efforts … to rebuild these communities, as well as fulfill pension obligations and pay back the debt we owe to workers and families who spent generations, often at the expense of their own health and well-being, providing the energy that powered a good part of the American economy.”