Trump's Coal Promises: The Economic Rewards and Repercussions

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Throughout his campaign, Donald Trump promised to bring coal back. His rhetoric aligned with a working-class electorate, many of whom had been hit hard by the financial crisis and corresponding coal downturn.

West Virginia, a state that had once been reliably Democratic, showed up at the polls in his favor. However, two years into his administration, Trump’s policies have yielded positive and negative results for multiple parties.

The Policies

Trump’s coal promises focused mainly on amending and rolling back policies created in the Obama years regarding coal regulations. Most notable was his decision to withdraw from the Paris Accord.

The agreement held the United States to a commitment to decreasing its greenhouse gas emissions by 26-28% from 2005 levels, in order to limit global warming to less than 2 degrees Celsius by 2100.

However, Trump has made plenty of other decisions on the national level to allow coal-sourced energy to survive. New coal plants do not have to use carbon capture technology to reduce their carbon dioxide emissions and existing plants are held to a standard of a maximum of 1900 pounds of carbon dioxide emitted per megawatt hour compared to Obama’s cap of 1400.

Effectively, Trump’s pollution policies aim to increase the efficiency of individual plants and gives states more authority to make decisions about the upper limits of emissions.Another possibility Trump has highlighted in the past is seizing production authority, by using the Defense Production Act and making energy production a matter of national security.

This would enable him to force grid operators to buy electricity from failing coal plants and build a stockpile of coal and nuclear plants.

Positives

In the short term, the coal industry has seen a bounce back from a difficult few years, following a glut of natural gas coming into the market. In the first year of the Trump administration, coal production increased, largely due to increased exports to some of the biggest consumers of American coal, India and South Korea.

In 2018, production dropped slightly. However, many stakeholders hold the same view as the President of the National Mining Association, Hal Quinn, in that they believe that the industry would be much worse off without Trump.

Overall, as a result of the above policies, the Trump administration forecasts a 4.5% to 5.8% increase in coal produced electricity by 2025 compared to subsequent years following the Obama plans.

Negatives

Despite the extensive efforts taken, more coal plants closed during Trump’s first 2 years in office than during all of Barack Obama’s administration, despite his regulation rollbacks and withdrawal from the Paris Accord.

This trend was hardly unexpected; since 2010, 630 coal plants have been shut down or are planned to be shut down (nearly 40% of the US capacity). Competition from renewable energy sources, increased concerns about climate change, regulations in other countries that import from the US, such as China and India, and trade wars will be difficult for Trump’s policy changes to beat.

Furthermore, the lack of effective policy brought forward by the administration has raised criticism that Trump has neglected more effective policy and energy sources in favor of obtaining working class votes at all costs.

The Bottom Line

Trump may be able to carry out policies that marginally benefit the coal industry, but in the long run, coal is being replaced with solar, wind, hydro, and natural gas, sources that are cheaper, cleaner, and safer.

Furthermore, even in mining states like Illinois and Ohio, jobs in renewable energy outnumber those in coal and nuclear by more than 4 to 1. All indices predict that the future of coal will be a far cry from its 2007 peak.

It is now up to Trump to decide if his resources are better spent investing in jobs for other energy sources or propping up a dying industry.

By Chelsea P. Cao