US Coal Struggles to Leave its Mark

Sally Wallis/Adobe Stock

Spend Matters welcomes this guest post from Jonathan Stokes, market analyst at Mintec.

When Donald Trump ran his presidential campaign in 2016, he did so with the pledge that he would transform the US energy market, cementing America’s place as an energy-providing superpower. The foundation of this new energy empire would be built similar to the industrial revolution, based on coal.

While the rest of the world moved towards a cleaner future, would America be taking a step back?

Pushing aside Barack Obama’s Clean Power Plan, Trump attempted to use policy to steer energy generation back towards coal, claiming the plaudits when production of coal in the US began to increase, following his November 2016 electoral victory.

This increase in production was matched by higher global demand as China cut production under new environmental legislation. In addition, US coal miners benefited from higher natural gas prices during late 2016 and from Cyclone Debbie halting Australian coal exports.

Coal looked like it had made its triumphant comeback driven by Trump’s policy making.

However, the US energy market had other ideas when it came to providing power. The percentage of coal burned for electricity generation has fallen by around a third between 2011 and 2016, with 39% of coal burned in 2014, 33% in 2015 and 30.4% in 2016. Coal production has also started to fall, as the US Energy Information Administration published figures showing year-over-year declines in December 2017. So what is picking up the slack?

The rise of fracking in the US has meant that a cheap abundant supply of natural gas exists on the domestic market. Alongside this, the significantly lower emissions have made it progressively popular amongst energy providers. Equally, renewable energies have increasingly made their presence felt in a country built on fossil fuels. Since 2010, the share of energy generated by renewable sources has grown by almost 50%.

As Trump moves away from the Clean Power Plan and boosts the US coal industry, the question remains: Will policy be enough to ‘Trump’ the looming demise of a struggling coal industry?

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