All year, Donald Trump has been promising to rescue the US coal industry by repealing various Obama-era pollution rules and ending the “war on coal.” And all year, analysts have pointed out that he probably can’t stop the collapse of the coal industry — since coal’s woes go far beyond the Environmental Protection Agency.
But if you want a perfect example of why Trump will struggle to bring back coal, just look at Michigan.
Last weekend, the CEO of Michigan’s largest electric utility reiterated that his company is still planning to retire eight of its nine remaining coal plants by 2030 — whether or not Trump tries to repeal President Obama’s climate policies. "All of those retirements are going to happen regardless of what Trump may or may not do with the Clean Power Plan," DTE Energy’s Gerry Anderson told MLive.com’s Emily Lawler.
Coal’s woes go far beyond Obama’s climate policies
Anderson’s reasoning was simple. Coal is no longer the economic choice for generating electricity, due to relentless competition from cheaper (and cleaner) natural gas and wind power. In Michigan, a new coal plant costs $133 per megawatt hour. A natural gas plant costs half that. Even wind contracts now cost about $74.52 per megawatt hour, after federal tax credits. "I don't know anybody in the country who would build another coal plant," Anderson said.
What’s more, Anderson added, surveys show that most of Michigan’s consumers want to add more renewables “if it can be done at reasonable cost.”
It’s not just Michigan. This dynamic is playing out all over the country, as coal plant after coal plant succumbs to competition from cheap natural gas and wind. Over at Politico, Michael Grunwald estimates that US power plants are now on track to emit 27 percent less carbon dioxide in 2016 than they did in 2005.
What’s remarkable is that this is all happening before Obama’s Clean Power Plan even takes effect. That rule, which is still tied up in court, aimed for a 30 percent cut below 2005 levels by 2030. We’re almost there already. So it’s clear that scrapping the CPP, as Trump has pledged, won’t help coal power make a huge comeback. (That said, killing the CPP may matter in other ways, as we’ll see below.)
True, Trump could still try other moves to help coal. One big reason coal plants have become so expensive is that they have to comply with a slew of EPA air pollution rules on particulates, smog, mercury, and so on (coal is the dirtiest fuel, after all). If a Trump administration were to scale back these rules, the cost of coal power would drop a bit. Likewise, if Congress were to get rid of federal tax credits that subsidize wind and solar, they’d be less competitive against coal.
But none of these strategies are guaranteed to work. A surprising number of Republicans in Congress, including Sen. Chuck Grassley (R-IA), are actually in favor of those renewable tax credits. What’s more, rewriting every last Obama-era air pollution rule could be a time-consuming slog — and in any case, utilities have already bought costly scrubbers for their coal plants to comply with things like the Mercury and Air Toxics Standards (MATS). That can’t be undone.
On top of all that, Trump has vowed to ease regulations on fracking, which will just mean more cheap shale gas — which, again, could hurt coal.
So you can see where Anderson is coming from. Trump’s promise to save coal may be a great applause line. But the economics of coal-fired power plants are miserable right now. And there’s only so much a Trump administration can do to change that. At best, some coal plants scattered around the country might get a reprieve under Trump, thanks to laxer pollution rules. At worst, coal’s free-fall will continue unabated.
That’s why, after the election, Kentucky Republican Sen. Mitch McConnell suddenly hedged on any predictions that Trump would bring back US coal-mining jobs.
That said, repealing Obama’s Clean Power Plan would be a big deal for other reasons
Now, a person might read the above and conclude that Obama’s Clean Power Plan is basically worthless. After all, coal is dying anyway. Does it really matter if Trump scraps it?
This gets a bit complicated, but I’d argue that Obama’s Clean Power Plan does still matter for emissions and climate — even if coal power is already in decline without it.
First, a number of modeling efforts suggest that clean energy additions would be somewhat higher with the plan in place than if it were repealed. Partly that’s because the Clean Power Plan would drive additional coal retirements in states that are especially reliant on the fuel, like West Virginia and North Dakota. Partly that’s because the plan included some extra incentives for renewables, efficiency, and new nuclear construction. Partly that’s because the plan would prod a lot of states that have never really thought about clean energy to start doing so.
Second, the Clean Power Plan was a backstop in case natural gas prices ever spiked unexpectedly — an event that would suddenly make the economics of coal much more favorable.
Third, the Clean Power Plan was something to build on. Its 2030 goal is obviously pretty weak, given that the country is nearly there today. But a president serious about climate change might have pushed to strengthen the plan further, to tighten its goals and push for even steeper reductions. Trump plans to prevent that from happening.
It’s also worth noting that the Clean Power Plan was only one component of Obama’s broader efforts to tackle climate change. Electricity, after all, is only about one-third of US carbon-dioxide emissions. So, to chip away at the rest of the problem, Obama also had regulations to raise fuel economy standards for cars and trucks, to plug methane leaks from oil and gas operations, to tighten efficiency standards for appliances, and more. A new president might’ve extended those actions to sectors like refineries and air travel. But all of these rules (which were already insufficient to halt climate change) are expected to get weakened considerably under Trump.
So that’s how to square two seemingly incongruent storylines: Trump probably can’t halt the US coal industry’s relentless decline, but he can still do a lot to undermine US climate policies — in a way that could have negative ripple effects all across the globe.
- You can find a similar “death of coal” story in Tennessee, where the TVA is vowing to move away from coal no matter what Trump does. And here’s another example in the Kentucky-Ohio-West Virginia region.
- Note that this post is mainly focused on coal power. But Trump has also promised to revive coal mining. That’s even tougher to do, since mining employment continues to be crushed not just by the decline in coal-fired power plants but also by automation and by weakening demand for metallurgic steel from China — neither of which Trump has any control over. See here for more.
- Here’s a look at many of the different ways Trump and the GOP Congress could potentially rewrite US environmental policies.