Trump vigorously mined coal, but it's too late to prevent the decline of the coal industry

Even though coal as an energy source is gradually losing popularity and a trend toward cleaner energy is emerging, President Trump has still been vigorously mining coal (both literally and in terms of policy).

President Trump has long been a supporter of the coal industry. Recently, on July 15 at the "Energy and Innovation Summit" in Pittsburgh, he strongly promoted his support for industries such as coal. Trump later shared an article by Energy Secretary Chris Wright on his social media "Truth Social," stating, "President Trump changed the U.S. energy landscape. You will see more big, beautiful, clean coal!" Will we see that? Probably not. Recent pro-coal policy measures by Trump may slow the long-term decline of coal, but they almost certainly won't lead to any net increase in U.S. coal production.

The recently announced policy changes are significant, including the "Big and Beautiful Act," as well as regulatory reforms that Trump has the authority to implement. The latter may have a greater impact. This act authorizes the Department of the Interior to provide more land for coal leasing and classifies metallurgical coal as a "critical mineral" eligible for production tax credits. The Trump administration also took action in March, canceling some requirements for pollutants emitted by power plants, including carbon dioxide and other pollutants. Without these requirements, we will see most of the remaining coal-fired power plants in the U.S. closed within the next decade.

In April, the Trump administration issued an executive order directly intervening in the market. The order effectively required the Department of Energy (DOE) to issue orders to keep some coal-fired power plants operating that were planned to be shut down in the near future.

A related study by the U.S. Department of Energy received widespread criticism, claiming that unless the federal government intervenes to prevent the closure of coal-fired power plants, there would be significant challenges to the reliability of the U.S. power grid. In some cases, this suddenly disrupted the retirement plans of power plant operators, resulting in additional costs needed to maintain their operations.

This executive order requires the Department of Energy to ensure grid stability, which was previously mainly the responsibility of state-level utility regulators. However, given the expected surge in demand for A1 [artificial intelligence] data centers, this task has become more urgent. The Department of Energy's emergency orders are issued in 90-day cycles, and it is unclear whether the Department of Energy will extend these orders or for how long. The share of coal in U.S. electricity generation has fallen from half in the early 21st century to just 15% in 2024. As long as the Trump administration continues to stimulate demand in this way, the decline of coal will slow down.

Although coal is superior to intermittent renewable energy in base load power generation, private utility companies are not eager to follow the Trump administration's approach. Currently, private utility companies show little interest in building new coal-fired power plants, and no new coal-fired power plants have been added over the past decade. Due to cost reasons, even without national carbon emission pricing, the power industry prefers to increase renewable energy, natural gas, nuclear power, and some grid-scale battery storage.

While cost and reliability are the primary considerations for utility companies, future presidential administrations could potentially reintroduce some carbon emission regulations that the Trump administration has already revoked, making this idea even worse.

Another market for American coal is exports, but even considering the Trump administration's policy support for coal mining, the export outlook is not optimistic. The United States is an important coal exporter, mainly supplying Japan and South Korea. However, few countries are experiencing strong growth in global coal demand, and more important export countries are developing countries in Asia, especially India and Southeast Asian economies. These markets can obtain closer supply from Australia and Indonesia, making U.S. exports relatively more expensive due to transportation costs. South Korea and Japan are closer to the U.S. West Coast.

All of this means that the recent measures taken by the Trump administration offer limited benefits to the U.S. coal mining industry. These measures will slow the decline of the coal mining industry, but will not bring coal production back to previous levels. If the power plant shutdown ban remains in effect, this will also increase electricity costs for American taxpayers.

Source: The National Interest

Original: https://www.toutiao.com/article/1838311485687820/

Statement: This article represents the views of the author(s) only.