Thursday, February 21, 2019

Trump Policies Likely Little Help to Coal; May Aid China

By Rich Heidorn Jr.

WASHINGTON — The executive order signed by President Trump on March 28 embraces the politically nuanced “all of the above” energy policy, declaring “it is … in the national interest to ensure that the nation’s electricity is affordable, reliable, safe, secure and clean, and that it can be produced from coal, natural gas, nuclear material, flowing water and other domestic sources, including renewable sources.”

But make no mistake. Trump — like Barack Obama before him — likes some fuels more than others.

In addition to seeking to undo the Clean Power Plan, the order also ends a moratorium on federal coal leasing and eliminates the requirement that federal officials consider the impact of climate change when making decisions.

Trump signed the order following remarks in the wood-paneled Map Room at EPA headquarters, surrounded by his top energy lieutenants and a group of coal miners and executives. “You know what this says?” Trump asked the miners, pen in hand. “You’re going back to work.”

Trump’s remarks followed those of Energy Secretary Rick Perry, Interior Secretary Ryan Zinke, EPA Administrator Scott Pruitt and Vice President Mike Pence, who also pledged to reverse the decline in coal mining jobs. “Those days are over,” Pence promised, “because the war on coal is over.”

Coal Jobs

While industry interest groups and coal-state lawmakers praised the action, most reaction to promises of a rebound in coal mining jobs ranged from skepticism to derision. Natural gas and renewable generation have become cheaper than coal-fired power in many regions, and the most productive mines are increasingly automated.

Trump coal energy efficiency renewable energy

Murray

Trump and Pence “cannot bring the coal industry back,” Robert E. Murray, CEO of Murray Energy, one of the nation’s largest coal mining companies, told Fox Business. “But they can stop the destruction.”

Trump’s order also requires EPA to review its emission standards for new generators, which effectively banned new coal plants without carbon sequestration. The levelized cost of a new coal generator with sequestration is about double the cost of new solar PV and wind, according to the Energy Information Administration.

But even current plants without sequestration are having difficulty competing against renewables and cheap natural gas.

Trump coal energy efficiency renewable energy

Alliant Energy’s coal-powered Edgewater Generating Station in Sheboygan, WI

EIA’s annual coal report last November found that U.S. coal production dropped 10.3% in 2015 to less than 900 million short tons, the lowest annual production level since 1986. Employment at U.S. coal mines dropped 12% in the year to less than 66,000, the lowest since the agency began collecting data in 1978.

More than 21 GW of coal generation retired in 2015 and 2016, largely as result of the Mercury and Air Toxics Standards, and EIA says another 14 GW is at risk of retirement by the end of 2028.

Energy economist Robert W. Godby, of the University of Wyoming, told The New York Times that Trump’s order could delay the closing of some endangered coal mines for as long as a decade. But because of increasing mechanization, “they’re not hiring people,” he said. “So even if we saw an increase in coal production, we could see a decrease in coal jobs.”

Economic Impact

At the signing ceremony, Trump’s cabinet members portrayed the Obama administration’s environmental policies as a drag on the economy, with Perry decrying “poorly designed government policies [and] distorted markets.”

“The executive order will begin the process to unravel the red tape that’s been keeping investment on the sidelines and innovation stymied,” Perry said.

“We’re no longer going to have regulatory assault on any given sector of our economy,” Pruitt said. “We’re not going to allow regulations here at the EPA to pick winners and losers.”

“Our nation can’t run on pixie dust and hope,” Zinke said.

EPA’s Regulatory Impact Analysis of the CPP, which predicts the rule would produce economic and health benefits far exceeding its costs, is not given credence by the agency’s critics.

But many others say Trump’s policies will hurt American leadership in clean energy technologies.

Trump’s budget would cut the $2 billion budget for the Department of Energy’s Office of Energy Efficiency and Renewable Energy by at least 25%. EERE’s research has been credited with helping produce the 74% drop in the cost of utility-scale solar since 2010.

Although it is the world’s largest coal consumer, China reached an agreement with the Obama administration in 2014 to cut both nations’ emissions, a pact that set the stage for the 2015 Paris Agreement.

Bloomberg New Energy Finance reported that China had $87.8 billion in clean energy investments in 2016, versus $58.6 billion in the U.S. And China recently announced it will invest $360 billion in renewable energy by 2020, which the government predicts will create 13 million new jobs.

China’s goal is to increase its use of non-fossil fuels to 20% of total energy consumption by 2030, with 200 GW of wind capacity and 100 GW of solar. The U.S. had 81.3 GW of wind capacity and 42.4 GW of solar PV as of the end of 2016.

Already, Chinese manufacturers lead the world in production of wind turbines, solar panels and batteries.

“The Trump administration is turning the nation’s back on the historic opportunity to build a clean energy future — a future that will modernize our energy system, offer consumers better value for their energy dollars and invest in state and local economies while taking the right steps to reduce climate pollution,” said Daniel Sosland, president of Acadia Center, which supports clean energy policies.

EIA predicts renewable electricity generation will grow 3.9% annually through 2030 without the CPP and 4.7% a year with it.

Regardless of what happens with the CPP, utilities, major corporations and many states are likely to continue their efforts at decarbonizing the generation mix.

New York Gov. Andrew Cuomo and California Gov. Jerry Brown issued a joint statement reaffirming their commitment to exceed the CPP’s targets.

“Climate change is real and will not be wished away by rhetoric or denial,” they said. “Together, California and New York represent approximately 60 million people — nearly one-in-five Americans — and 20% of the nation’s gross domestic product. With or without Washington, we will work with our partners throughout the world to aggressively fight climate change and protect our future.”

Reaction

Other reaction to Trump’s order was, unsurprisingly, mixed.

Environmentalists said the order could damage climate change efforts while producing no benefits for the coal industry. On Wednesday, a coalition of environmental groups filed suit over lifting the coal leasing moratorium, contending Trump’s action is illegal because it was done without an environmental impact study.

“The fact that major utilities in Ohio are planning to shut down a number of dirty coal-fired power plants throughout the state should be an indication that the market is moving on to less costly and cleaner resources,” said Shannon Fisk, managing attorney for the Earthjustice coal litigation program. “We will be advocating to maximize energy efficiency and renewable energy as the best options for replacing coal plants, and for providing a just economic transition for coal workers and communities.”

Trump coal energy efficiency renewable energy

Sammis Power Plant | Bechtel

David Doniger, director of the Natural Resources Defense Council’s Climate and Clean Air Program, tweeted: “Coal country needs a path to the economy of the future, not false hopes Trump won’t deliver.”

Paul Bailey, CEO of The American Coalition for Clean Coal Electricity, called the CPP “the poster child for regulations that are unnecessarily expensive and have no meaningful environmental benefit.”

The American Public Power Association also supported the president’s action. “Public power has previously voiced its legal objection to the rule for requiring utilities to fundamentally alter the way they generate electricity. In some cases, utilities would have been forced to abandon functional power plants while continuing to pay them off,” the group said.

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