Coal: How Has It Fared Under Trump?
President Donald Trump came into office promising to bring back American coal and roll back Obama-era environmental regulations. After one year in office, how did he do?
A recent report from Rhodium Group finds that US coal production did recover slightly, but it had nothing to do with a change in federal policy. In fact, according to new Rhodium Group estimates, domestic coal consumption continued to decline last year. The growth in US output was due entirely to higher export demand and slower inventory draws.
Between 2006 and 2016, US coal consumption declined by 34 percent and production fell by 37 percent. Coal mining employment fell to 75,000 people in 2016.
Based on data released from the Energy Information Administration (EIA), US coal production increased around six percent in 2017. During the first three quarters of the year, US coal mining employment was up 0.5 percent.
The bleeding appears to have stopped in 2017. Whaht accounts for this change in trends?
A report last April from the Center on Global Energy Policy at Columbia University indicated that the majority of the recent decline in US coal consumption and production was due to market-driven energy market changes in the US and weak demand abroad. At the time, Rhodium Group argued that a change in federal policy could slow the pace of the US coal industry’s decline, but that a true recovery was hard to imagine.
The figures for 2017 support that projection. US coal consumption declined by 2.4 percent in 2017, according to Rhodium, falling to its lowest level since 1982. Demand was running above 2016 levels in the first half of the year due to higher natural gas prices but fell sharply during the third and fourth quarters.
There was some growth in US coal exports which explains the gap between increased production lower demand domestically. Rhodium found that a recovery in Asian coal demand, particularly for steel making, combined with supply cuts in China and Australia boosted global seaborne coal prices. “This,” the Rhodium report concluded, “made US exports more economically viable, increasing January-to-October volumes 70 percent from the same period in 2016.”