Americas, USA, Opinion, Politics

Broken Promises: The US Coal Industry is Dying

US Coal Industry Coal Miners

Coal was a dominant topic in the presidential race of 2016. Hillary Clinton vowed to go further down the road laid out by Obama, famously dubbed the “War on Coal” by Republicans (which isn’t accurate, but more on that later). This meant focusing on aid for retired and laid off coal miners in anticipation of a further decline and to soften its social implications, while also banking on reducing carbon emissions and strengthening renewable energy. Trump, on the other hand, posed as a close ally of coal miners in states dominated by coal, using them as cheap props at rallies while he promised them they would all get their jobs back. After over a year, none of his promises turned out to be true. The US coal industry is dying, and the current president is only making it worse for those he swore to represent, especially coal miners.

Coal is a topic of political contention. The US coal industry has been on a steady decline since the beginning of last century, with minor growth and spikes here and there. It’s always been a fluctuation of boom and downturn, with the downturn proving to be overall dominant.

Donald Trump: President of the Few

When looking at Democrats and Republicans, sentiments are divided. Most, but not all, Democrats see the future in renewable energies, and coal as one of the biggest strains on the environment. Democrats saw their responsibility, if elected, to dampen the fall of those that are affected by the inevitable decline of the industry and to reduce carbon emissions while further pushing renewable energy. Republicans, on the other hand, are still majorly banking on the US coal industry and its jobs. Regardless of the fact that the industry only employs around 50,000 people in coal mines and there was (and still is) little evidence to suggest that will change after having repealed Obama’s Clean Power Plan.

If we only take the process of electric power generation and include all jobs involved in coal, we would get 86,000 jobs in Q1 2016 according to the 2017 U.S. Energy and Employment Report. The solar industry employed 4.5 times as many people in the same period in the same sector, and if you add wind to this number, renewable energy has a workforce that is six times greater than coal.

So why are coal miners and employees so emphasized by Republicans, even though they are a comparably small group?

Coal Miners: A Workforce to Win Elections with

Republicans loved to call out former President Barack Obama for his War on Coal. Some Democrats did the same even. Most of them were dependent on votes from the coal states and that is exactly the point. The US coal industry doesn’t employ that many people, in fact, many multinational companies within the US employ many more, yet we don’t fall on our knees trying to save them when bankruptcies loom like we do with coal miners.

This has to do with the way the US coal industry is set up. Towns with coal mines are often exactly and only that – coal mining towns. If a coal giant goes out of business, almost the whole town goes under. The US has several cities and states solely built around coal mining, and securing their jobs (or claiming to) wins you votes there, votes that can prove to be vital in an election. President Trump won 4 out of 5 leading states in coal production to become president following his bold promises about coal (and clean coal in particular).

The “War on Coal” Lie

Obama put several regulations on the industry with his Clean Power Power, in what Republicans felt would undermine (pun not necessarily intended) the industry and kill it off. What many do not realize is, that the US coal industry hasn’t grown steadily and substantially in almost a century. Spikes in growth were usually short-lived and highly market dependent. In fact, according to the Columbia Center on Global Energy Policy, Obama’s regulations attribute to 5% of a decrease at most of what we are seeing now, but probably lower than that. Half of the decline in coal demand that we see in the US comes from the incredibly low price of natural gas due to cheap fracking techniques and a subsequentially lower demand for coal. Those two reasons alone attribute to a 75% reduction, and renewable energies are taking away almost another 20%.

So why does it feel to Republicans and citizens of those coal states as if it all went down for good since Obama started meddling with the holy king coal?

The Reason why the US Coal Industry is Crashing

We previously mentioned market conditions, plainly demand, which has been revitalizing the US coal industry a bit, peaking in 2011 and declining ever since. The reason for that was actually Chinese demand, which has been growing exponentially for a while, causing the US coal industry to go all-in on the prospect of sustained growth. It wasn’t even coal for power generation, but metallurgical coal, designed for melting steel to build housing in China. As said, the industry is used to operate in an environment of constant boom and downturn, so this was an opportunity many companies took to invest.

Unfortunately, that growth wouldn’t go on forever (and partially never even came) and amounted to the US coal industry shooting their own foot for even thinking it could. The War on Coal is not only on Obama, it was a deadly mix of naive business decisions that saw more investments than they could reclaim when the market plummeted, general market conditions, and other energy sources (like natural gas) that were either more promising, cheaper or both. It also doesn’t help that, though coal is a generally cheap energy source, many coal mining facilities and burning plants are old and comparably expensive to maintain.

It’d be foolish to claim the Clean Power Plan didn’t have an impact, with companies required to invest millions in order to meet the new standards. Regardless what you think about climate change, those regulations were an improvement for the health of the population, and therefore still needed even if you eliminate the Paris Agreement which Obama aimed for with the introduced regulations. If you consider its relatively low impact, there’s nothing here you could really regret, yet it was the perfect democratic scapegoat to turn the coal states around.

The Reality of Coal in the US: Deal with the Devil

Trump has not been able to revitalize the US coal industry. It added a few hundred jobs, give or take, since its inauguration, but those were lost with the inevitable decline and closing of further plants. The reality is not pretty: the US coal industry is gone and everything that Trump attempts to do is just prolonging the death and decline of coal at the expense of coal miners.

The reality is that coal mining is an extremely dangerous job, with possibly major implications for the health of the people involved. While it paid extraordinarily well – many of those fortunate to work these high-paying jobs are now paying an even higher price. Over the past years, several companies in the industry have filed bankruptcy, cutting back pensions that were regarded as “safe” in the past. The truth is that there are coal miners out there, that heavily relied on Obamacare due to pension and healthcare cuts, and are now double-screwed with it vanishing as well. Trump gave hope where none was, culminating in potentially doing more harm than to just let it run its course.

More Money for the Rich

Everything that the government put int those companies now will only serve the management, as it will often vanish on the battlefield of bankruptcy – either to pay lawyers, premiums or other related costs. If you were opposed to the government bailing out the banks or any other company in the past, you have to be double as opposed to the government bailing out coal companies. Unlike other endeavors, the US coal industry won’t bounce back and it is very unlikely to benefit anyone outside management to feast on a dead horse before jumping off.

None of it is likely to help those that are seeing their pension and healthcare pulled from underneath them after literally destroying their body in the mines. The only way to catch those is by having working social services and benefits that are able to catch those affected and to incentivize both retraining programs and new industry to come and settle in the regions affected. It won’t be a smooth transition, as coal is going to die sooner as new industries will be able to develop, but that is the only viable long-term plan.

Trump has consistently been focused on the upper 5% of the country, be through taxes or regulations (or their repeal), and he continues to do so at the expense of coal miners, not their benefit.

About Andreas Salmen

Born and raised in Germany, learned a job in IT and Business and ultimately decided that this wasn't exactly where my life was going to end. Left everything behind to become a writing backpacker instead. The world's crumbling away anyway so why not write about it and get a few good Instagram pics on the way, am I right?

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