Saturday, May 20, 2017

Trump Didn't and Can't Save Coal

There's been much chortling lately about the Trump administration's rollback of certain regulations pertaining to the coal industry, and fervent hopes that these actions will generate a comeback in Appalachian coal mining.

To be honest, I've seen more loaded coal cars rolling through the Bluefield, West Virginia rail yard in the past few months than I saw through all of 2016. However, I believe it's a bit early to give the administration credit for this.

The supposed "job killing" regulations enacted on the coal industry by the Obama administration miraculously never had an effect on most operations outside Appalachia, the most visible example being the Powder River Basin, where they have long been yanking coal out of the ground as fast as possible to meet demand.

The proverbial big gorilla in the room is the plain fact that coal produced in the Appalachian region sells for three times the price of coal extracted elsewhere in the United States. This can be blamed mostly on higher production costs, since the remaining coal seams in our mountains are thinner and much harder to reach (hence the destructive mountaintop removal method of mining).

“It just doesn’t look like coal there is going to boom in the future,” says Robert Milici, a researcher with the U.S. Geological Survey. “The best coal has been mined out. It’s pretty well gone.”

Production in the Central Appalachian basin, which consists mostly of Southern West Virginia and Eastern Kentucky, peaked at about 290 million tons in 1990 and again in 1997, according to federal government data. But even as national production continued to grow over the following decade, Central Appalachian output fell 20 percent, to about 235 million tons, by 2008.

In January 2010, the Morgantown consultant group Downstream Strategies issued a landmark report that tried to summarize earlier U.S. Department of Energy projections and draw more public and political attention to the problem the coal decline posed for Southern West Virginia.

That Downstream Strategies report listed DOE Energy Information Administration projections that regional coal production would decline another 46 percent by 2020 and 58 percent by 2035, to just less than 100 million tons.

It's worth noting the report was published long before the Obama administration had finalized any Federal mandate to reduce greenhouse gas emissions.

When I see the Bluefield rail yard moving coal day in and day out as it did 20 years ago, I'll believe Federal regulations killed Appalachian coal. Until then, I'll follow the tack of most experts, who state that market forces have played the biggest role in its decline.

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