Spend Matters welcomes this guest post from Rajiv Joarder, knowledge team leader at Mintec.
Coal, as a fossil fuel, has been the focus of negative press for years, certainly when regarding carbon emissions. Despite this, President Donald Trump promised throughout his campaign to bring back jobs to the American people, coal mining being one of them.
He pledged to get rid of environmental laws, which limited the use of burning coal as an energy source. He has now started this process. President Trump signed an executive order in March titled “Presidential Executive Order on Promoting Energy Independence and Economic Growth.”
Previously, he has claimed that climate change was hoax invented by the Chinese to give them an edge over production in the global economy. The U.S. currently employs around 50,000 people in the coal industry and is the fourth largest exporter of coal in the world, just behind Australia, Indonesia and Russia.
Coal prices have been on a steady downward trend since late 2012. But lately, the price of coal in the U.S. has risen by 36% since the beginning of October 2016 and is expected to go up further. So has Donald Trump delivered on his campaign promise?
Well, not yet. He has simply ordered a review of the sector. The price increases are actually due to increased demand from China. After storms hit Australia on March 23, destroying coal mines and infrastructure, coal mines declared force majeure, which allowed the U.S. to come in and fill the void. But this situation is only temporary, as it is too expensive to mine and ship the coal all the way from the U.S. to Asia.
Top coal bosses are skeptical on how much Trump can revive the industry, even if they start using coal internally for manufacturing and in electricity generation. Even China has capped the number of coal-fuelled electric generators due to pollution and the wellbeing of the general public.