Announcing its plans to eliminate rules reducing carbon pollution from power plants, the Trump administration framed the repeal as necessary to prevent the demise of the coal industry and its miners. Predictably, environmentalists refuted this rationale, but they aren’t alone. Robert Murray, CEO of coal giant Murray Energy Corporation, is on record saying Trump “can’t bring (coal jobs) back.”
Coal executives recognize market forces, not laws, are driving coal to the margins. Ignoring that reality only deepens the harm to working people in coal country.
Far from the “War on Coal” alleged by Trump appointees, a government war supporting coal has been waged for many years, including subsidies that add up to about $1 billion annually.
Below-market fees charged for extracting coal from publicly-owned land in Montana and Wyoming by themselves constitute a gift to coal corporations comparable to all federal support for renewable energy.
Even so, coal produced only about 15 percent of all energy in the U.S. last year and the coal industry has faced declining market share and a string of bankruptcies and loss of market share over the past decade.
Low prices for natural gas, reductions in demand from abroad, and technological improvements are eroding coal’s market. Researchers from Columbia University found public health and environmental protections instituted under President Obama account for just 3 to 5 percent of coal’s declining sales.
Coal-dependent areas would be wise to heed the lessons of Rochester, New York, whose one-time top employer, Kodak, stubbornly resisted the market’s shift from film to digital photography. This led to the company’s demise and the devastation of the region’s economy.
When facing circumstances like Rochester’s, guiding change proactively, and not having the terms dictated to you, is the best way to adapt with minimal loss of jobs and wealth.
In Colstrip, Montana, where over half of the working-age adults are employed in the coal industry, outside utilities are shutting down coal-fired power plants. These shutdowns leave locals a shrinking window in which to build other businesses or flee the community.
Coal states across the country face a similar future, and while heel-dragging may help coal company owners maximize their profit in the short term, it does nothing for coal miners and their families.
A new strategy for these places is needed. Declining domestic demand no longer can be replaced by foreign buyers like China, which is leading the world in adding solar and wind capacity and is eliminating coal plants.
“We are setting ourselves up to miss the boat,” says Karl Unterschuetz, head of business development at Itek Energy.
“The U.S. is poised to be a global leader in renewable energy if we would just move away from coal.”
Itek, based in Bellingham, Washington, is one of only five major solar panel manufacturers in the U.S., and faces an uphill battle against competitors in China, Germany and other nations thinking forward on energy.
Renewable energy already succeeds in the marketplace, and is a high-value industry employing far more people than coal, with decades of growth to come.
Beyond embracing renewable sources of power, we can adapt to our changing economy by taking that billion-dollar handout currently pocketed by coal companies and invest it into infrastructure for entrepreneurial opportunities — such as high-speed internet — in coal communities.
The sooner government officials accept that coal’s life cycle has run its course, the greater the opportunity for coal communities to build positive alternatives and self-reliance, and perhaps avoid disaster.