On Wednesday, the Wall Street Journal’s editorial board lauded Trump for making coal barons dreams come true.
Not long ago liberals hailed the demise of coal as inevitable while the Obama Administration strangled the industry with regulation. But don’t look now, Tom Steyer, because coal is showing signs of a revival and breathing economic life into West Virginia and other coal states. […]
Yet the Trump Presidency seems to have lifted animal spirits and coal. Weekly coal production has increased by 14.5% nationwide over last year with even bigger bumps in West Virginia (19%), Pennsylvania (19.7%) and Wyoming (19.8%). Exports were up 58% during the first quarter from last year. Apparently coal can be marketable if regulators let it be.
Honestly, I don’t know what “animal spirits” are or how they get lifted, but the contention that Trump has given a big boost to coal is simply, what’s that term? Fake news. Or, in language that’s even easier to understand, it’s a big, fat lie. In their attempt to support Trump, the Wall Street Journal is distorting the truth about coal and cruelly raising the hopes of people who have bought into a false promise. They’re performing a disservice to their readers and to their nation.
That big increase in production they’re talking about? It’s generated by comparing the current weekly production with the same week last year. The first quarter of 2017 saw production of 197 million tons of coal, compared to 173 million in the same quarter of 2016. Which does look like an uptick.
But look at it in context.
That single orange bar, the bar that’s actually lower than the quarter before, and the quarter before that? That’s Trump’s “comeback.”
Yes, the first quarter of 2017 is higher than the first quarter of 2016, but that’s because the first quarter of 2016 represented a record low. The quarter reflected a mild winter in much of the country, a dip in gas prices, large stockpiles on the ground at many power plants, and market disruption following the bankruptcy of the two largest coal companies in the nation. The second quarter of 2016 went even lower as an extreme dip in gas prices encouraged utilities to reduce coal inventories and utilize gas turbines to full capacity.
Comparing this week with one in 2016 may seem reasonable on the surface. It’s not. Notice that how different quarters of the year relate changes depending on the weather, the market, and many other factors including the cost and availability of rail transportation. While the first quarter of 2016 showed a big drop in production, the first quarter of 2015 was actually the most productive quarter of the year. If the Wall Street Journal had chosen to compare production in 2015 vs 2017 rather than purposely searching out that dip at the start of 2016, the numbers would show that production under Trump is down by 20 percent.
What’s changed since then? Nothing. For a newspaper that’s supposed to represent the interests of investors, the Wall Street Journal position presented here isn’t just wrong, it’s deliberately deceptive. For example, here’s the WSJ contending that Trump is boosting coal’s competitiveness.
President Trump has called a cease fire to his predecessor’s “war on coal.” In February he signed a resolution repealing the stream rule under the Congressional Review Act. The Supreme Court stayed the Clean Power Plan in February 2016, and EPA Administrator Scott Pruitt is dismantling the power rule as well as the ash and mercury rules. Interior Secretary Ryan Zinke has re-opened leases and rescinded the royalty revaluation.
Meanwhile, coal is becoming more competitive as a fuel source relative to natural gas, whose price has risen 63% since March 2016 amid an expanding market. The Energy Information Administration says the U.S. will be a net exporter of natural gas this year.
Only … no. Coal has no value as an energy source outside a power plant. How many new power plants have been built for coal? None. How many units within power plants have been converted from gas to coal? None. How many units have been announced to convert to coal? None. How many units have been announced a delay in plans for converting from coal to gas? None.
In fact, what’s happened for coal in the first quarter of Trump’s term has been a massive and humiliating defeat. Not only has conversion to gas accelerated, but the nation’s first “clean coal” plant is changing over to gas without ever getting it’s new technology running, in spite of billions of dollars in cost overruns.
After years of delays and billions of dollars in cost overruns, Mississippi regulators on Wednesday called on Southern to work up a deal that would have the Kemper plant fueled only by gas. […]
Settling for gas only at Southern’s Kemper plant threatens to undermine the business rationale for the kind of clean-coal technology the Trump administration has hailed as a way to save jobs at mines.
Kemper alone represents 580 megawatt hours of capacity that will be gas, not coal. TVA’s Paradise plant, which was the largest coal plant in Kentucky, moved 1,000 megawatts of capacity to gas in the last two months.
Natural gas prices are currently running around $2.95 / MMBtu. That’s above the less than $2.50 range that would signal a stampede toward converting even the oldest, least amenable to change plants. It’s also well above the $2.00 price that gas touched in the first quarter of 2016 when plants decided to sit on their coal units and simply burn all gas.
Should gas slip above $3 for an extended period, there would be a slowdown in conversion of plants to natural gas, particularly older plants in the Midwest. But even that won’t stop coal’s slide. In 2015, a volatile gas market saw prices spiking well above $4, and yet not one watt of coal capacity was added. Instead plants continued planning for and executing gas conversions, though they used more of their coal capacity.
As of 2016, production capacity in the US electricity market was 450 million kilowatts gas, 260 coal, 115 renewables, and 100 nuclear. For a decade, gas and renewables have been moving up, coal has been going down. There is absolutely no doubt that those trends will continue. The only real question is how gas and renewables will divide their market as wind and solar continue to decrease in cost.
Oh, and the Wall Street Journal wants to get in one final dig by hinting that other countries aren’t as clean as they pretend to be.
This is all horrifying to the climate-change lobby, but they might note that U.S. coal exports are rising to countries that claim climate-change virtue. Exports to France increased 214% during the first quarter of this year amid a nuclear power plant outage. Other European countries like Germany and the U.K. are utilizing U.S. coal to stabilize unreliable renewable sources and make up for electric capacity lost from the shutdown of nuclear plants. First-quarter coal exports were up 94% to Germany and 282% to the U.K. Et tu, Angela Merkel.
A 214 percent increase in coal exports to France? Why those fakers. How much power do they get from coal anyway? None. Or at least, less than 1 percent. France does get 8 percent of its power from fossil fuels, but coal is only used by a few isolated “campuses” mainly as a back up supply. The massive increase the WSJ is talking up? It’s less than 0.5 million tons. Germany took just over one million. The UK just less than one million. For all these countries, coal rates as a niche product, so little used it doesn’t justify even having a coal mining industry.
In fact, you could not justify the cost of a single mine on the total sales to France, Germany, and the UK combined.
Talking up these tiny amounts as if they represent some big change is distorting, deceptive, and downright crooked. But then, that’s the nature of the entire article.