Donald Trump’s promise to revitalize the coal industry pushed him to big wins across Appalachia as people continued to see jobs disappear largely because of the natural gas boom. He scored one of his largest margins in West Virginia, a onetime Democratic stronghold that he swept with 69 percent of the vote.
But the stubborn fact persists that as the U.S. adds new energy capacity, coal struggles to remain even a footnote. Last year, only 45 megawatts of electrical power, or 0.17 percent of all new capacity in the U.S., came from coal.
Coal, for better or worse depending on one’s perspective, will score some short-term gains in the next few years. Coal hit peak production in 2008 and steadily declined thereafter, but the U.S. Energy Information Administration (EIA) forecast a slight increase in coal production over the next two years.
The major reason for the temporary boost in coal is that, despite a recent dip in prices, the cost of natural gas has been on an upward trajectory over the past year. But as renewables continue to fall in price and increase their efficiency, that small increase in coal production will not last long.
The problem for Trump, however, is that the small surge in coal consumption will not benefit the voters in Appalachia who saw the insurgent Republican as their savior and the antidote to what they viewed as a heavy-handed Obama administration hostile to their way of life.
So why won't coal gains help Appalachia? Because any increase in coal production will largely benefit the state of Wyoming, Robert W. Godby, a University of Wyoming professor who is also the director of its Energy Economics and Public Policy Center, told to CNBC this week.
Not only will Wyoming grab the lion’s share of revenues -- and, more importantly to Trump supporters, jobs -- but Appalachian states could experience an additional loss of over 1,000 coal jobs in the next two years.
Goody projects utilities’ drive to keep procurement costs low will push them to source coal from Wyoming, including the Powder River Basin. Unlike the smaller and deeper mines in states such as West Virginia and Kentucky, Wyoming’s coal deposits are much easier to exploit as the fuel source lies just beneath the earth’s surface. As a result, that hydrocarbon-rich area in northeastern Wyoming could score as many as 600 jobs.
Nevertheless, the coal industry would continue to suffer a net loss in jobs as less labor is needed to extract the Cowboy State’s resources than what is necessary in the older Appalachian mines.
Energy companies are responding in kind as they continue to ditch their coal businesses.
Two weeks ago, Consol Energy, which has a 150-year history in the coal-mining sector, announced it would spin off that division of its business before the end of this year. The CFO of the company, which reported a $306 million loss last fiscal quarter, told the Pittsburgh Post-Gazette that it concluded coal is a “topsy-turvy” business at best, and will focus on its oil and gas operations instead.
Image credit: BLM/Flickr
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.