Trump can’t save coal, experts say

Source: Zack Colman, E&E News reporter • Posted: Wednesday, June 6, 2018

President Trump has searched for ways to reward coal communities that helped him into the White House. Now he’s demonstrated how far he’s willing to go, by trying to aid financially ailing power plants.

The plan managed to unite environmental activists and free-market conservatives against it. And it raises legal questions about using national security laws to compel utilities to buy power from specific coal and nuclear facilities in order to keep them afloat. Grid operators say it’s not even necessary.

Simply put, the U.S. coal industry is in terminal decline due to cheaper natural gas and renewables, and increasingly hard-to-get coal and environmental regulations, according to analysts. While Trump wants to extend Appalachian coal a lifeline — an admirable goal in his supporters’ point of view — it’s not a sustainable one.

The next president can easily reverse course, said Sarah Hunt, chief executive of the Joseph Rainey Center for Public Policy. What isn’t likely to change is the economics facing coal.

“On the energy and climate issue, we all do need to have a sit-down and think about it, because piling subsidy on top of subsidy for preferred energy or preferred community is not a good approach,” Hunt said. “There certainly are solutions, whether it’s looking at regulations, looking at what we need to do as a country to position ourselves for the coming change of automation, artificial intelligence, globalization — which is going to continue.”

Hunt points to a broader problem divorced from coal. The ineffectiveness of Congress has outsourced more policymaking to the executive branch. That was true under President George W. Bush and became even more true under President Obama. Just look at the staying power of his Clean Power Plan, an effort to limit power plant carbon emissions; it was thrown asunder by the current administration. That momentum is hardening ever more under Trump, Hunt said.

If coal communities want a reliable path to prosperity, then incremental, bipartisan solutions passed by Congress are necessary, she said. That would break the only predictable trend left in energy and environmental policy — the drastic swinging toward the left under Democratic presidents and to the right under Republicans. With each wave, carbon-intensive communities grasp for a handhold.

“I think it is valid for everyone to say, ‘Hey, this is happening again, and it represents a systemic concern that needs to be addressed,'” Hunt said. “We don’t know who is going to be president next time, and it does create a vulnerability for our democracy.”

Republicans are discussing those realities, said Adele Morris, a senior fellow and policy director of the climate and energy economics project at the Brookings Institution. She, too, believes there’s a deal to be made between Republicans and Democrats to address climate change. It’s been a topic of conversation when she meets with GOP lawmakers.

“In all those conversations I’ve had, there’s a component for workers in the industry — particularly in coal — that already are hurting and would be further burdened by our climate objectives, that people are mindful of that,” said Morris, who worked in the Obama and Clinton administrations. “The Trump administration lasts however long it does, but I can guarantee that whatever it is the Trump administration is proposing is a blip in what is otherwise a very grim prognosis for the American coal industry.”

Even conservative voices rejected the Trump administration’s latest proposal, saying it invited government intervention in free markets and wouldn’t provide any more predictability for energy sources like coal.

“I think the more government intervention into some of these places, especially when it’s dying out, that creates more stuck resources that doesn’t actually lead to long-term economic health,” said Nick Loris, an energy economist at the Heritage Foundation. “It would be like propping up a whole bunch of Blockbusters and Hollywood Videos even though Netflix produced a better product.”

Trump is hardly the first president to employ controversial policy to score political points, Loris noted. But for a Republican president, Loris said, Trump’s actions are an affront to free-market principles. He suggested that pursuing more deregulation — through legislation — could have a longer-lasting effect on American coal. Items such as scrapping a policy known as New Source Review, which opponents say makes it too expensive to improve power plant efficiency, could help.

Loris noted that natural gas is flowing like “a faucet,” which makes Trump’s argument that coal consumption can rebound more difficult. He said it’s wise to consider other kinds of economic development for coal-dependent communities.

“That’s going to be a transition that is going to take place, which is all the more reason why you don’t want to pump resources into something that’s only going to last for a few years,” Loris said.

Morris has advocated for a carbon tax that would reinvest revenue in Appalachian communities.

She blames the coal industry and politicians for “pandering” to communities; it’s easier to tell people what they want to hear than to shake up an entire way of life.

Progressives haven’t helped by coming to the table with half-baked plans for economic transition, she said. It’s not true that laid-off coal miners can retrain to install solar panels, an idea that has occupied a sort of mythic value on the political left. Job increases in natural gas, solar and wind “generally did not occur where there were significant job losses in the coal industry, particularly in West Virginia and Kentucky,” Morris wrote in a 2016 paper.

Hunt said retraining plans should be tailored to local communities.

“We need to have an education system that is more flexible,” she said. “We need to respect people’s culture — you know, coal miners don’t want to sit in front of a computer all day and write code.”

That’s been a problem with government-led jobs training programs — many are implemented with political goals that don’t reflect local labor market needs, Loris said. He criticized the Obama administration’s POWER+ program, an effort that routed jobs retraining and other economic development funds through local partners and entities like the Appalachian Regional Commission.

Overall, Morris said, the United States has a poor track record of transitioning economically. The coal industry presents unique challenges. Whereas towns that hosted now-closed military bases had buildings, hospitals and airports, mining companies are “leaving behind a hole in the ground.”

Many of those communities are “in very isolated areas,” she added, meaning there’s little labor mobility. She said there’s been a “dubious match” between skills training and job markets in areas disrupted by trade, as well.

“The economic research demonstrated that clean energy jobs are not necessarily going to be located where the conventional fossil energy jobs are being lost. That’s pretty clear,” Morris said. “It’s just not that easy.”