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Analysis

Trump’s populist energy ambitions

by Oliver Thew

Trump’s populist energy ambitions

 

Donald Trump based his presidential campaign on the assurance he would ‘make America great again’. His nationalist rhetoric was aimed at those people who felt they had been left behind by economic globalisation.

One such group is workers in the coal industry, which saw a decline over the last decade in the light of increased regulation and the rise of more efficient energy alternatives, especially liquid natural gas. In 2003 coal accounted for half of domestic power generation. In 2015, it accounted for just one-third, with almost the entire difference made up by gas. Total coal mining capacity shrank to 1.2m tonnes in 2015 from 1.4m tonnes in 2008. Since 2010, 259 of the nation’s 523 coal power plants closed or announced their retirement.

Trump campaigned heavily in Wyoming, Pennsylvania, West Virginia, Kentucky and Illinois, which account for 71% of domestic coal production and where voters backed him by overwhelming margins. Meanwhile, Hillary Clinton faced heavy opposition after claims she would put coal miners out of business by replacing fossil fuel-based energy production with renewable systems. This culminated in an unemployed coal miner confronting her at a televised town hall meeting in West Virginia. Clinton has described attacking the coal industry as the biggest regret of her campaign.

Conversely, a key component of Trump’s plan was to increase domestic energy production, specifically coal and other fossil fuels, in addition to nuclear power. According to Trump, the aim is make the US not only ‘energy independent’ but ‘energy dominant’, and to ‘end the war on coal’.

Coal-friendly cabinet
Trump’s administration is one of the most fossil fuel-friendly administrations in US history. Rick Perry, former Texas governor and drilling advocate, runs the energy department, which he once famously said he would abolish. Scott Pruitt, climate change denier, Oklahoma attorney general and friend of the state’s shale-industry, is head of the Environmental Protection Agency.

Ryan Zinke, Montana Republican and former chief executive of an oil and gas consultancy, oversees US federal land and national parks as interior secretary. Rex Tillerson stepped down as head of ExxonMobil to become secretary of state.

To boost domestic production and job creation in the coal industry, Trump has begun dismantling much of the regulation established during Barack Obama’s presidency. In February he signed a bill repealing the stream protection rule, which restricts coal companies from burying new streams. In March Trump signed an executive order vowing to roll back other Obama-era climate change policies, including the clean power plan which limits carbon pollution from coal-fired plants.

These actions have drawn criticism from scientists, regulators, grid operators, environmental and health organisations, Democrats and parts of the Republican party, renewable energy companies, and even liquid natural gas companies. But Trump has no intention of trying to win favour with these groups. Support for Trump in coal mining parts of the US remains strong, and those who supported his nationalist and protectionist campaign welcome his decisions to repeal unpopular Obama-era regulations. A late-October survey put Trump’s approval rating at 83% among Republican voters.

Small gains, large losses
There is a perception among coal mining communities that jobs are being created. This is, in small part, true. For the first time in years a new coal mine, in Pennsylvania, has opened in the US. Coal production was 12% higher in the first three quarters of 2017 compared to the same period in 2016.

But these gains are small compared to the sector’s overall loses. The new mine will employ only 70 people when it reaches full capacity. Coal mining is a sliver of the US economy, employing around 52,000 Americans as of September 2017, down more than 70% since the 1990s. Power plants continue to close across the country – 251 since 2010 and 12 since Trump took office. Analysts say US domestic production may decline by as much as 40m tonnes over the next year, with prices failing to increase sufficiently to benefit shareholders or stimulate new investment.

Despite this, the administration is pushing ahead with its agenda. In September Perry directed the federal energy regulatory commission to create rules that would favour coal plants. Zinke wants to allow coal mines to operate nearer to national monuments and in national parks. In June, Trump withdrew the US from the Paris climate accord. In October, Pruitt said the ‘war on coal is over’ and announced he would sign a rule overriding Obama's clean power plan.

Renewable energy answer
Trump’s aspiration to make the US ‘energy dominant’, boost economic growth and create jobs is understandable. But supporting coal production is a step backwards. An alternative energy policy exists which can meet the same goals and appeal to his supporters, while addressing the problems associated with climate change. This is the renewable energy option.
The US department of energy reports that solar energy employs more US workers than coal, gas and oil combined – 374,000 people over the year 2015-16 or 43% of the sector’s workforce, compared to the fossil fuel workforce of 187,117. In the last 12 months, wind energy employed an additional 102,000 people across the US. In Wyoming, one of the major coal producing states, there is a shift towards renewable energy. The bureau of labour statistics predicts that ‘wind energy technician’ will become the fastest growing occupation in the state, more than doubling over the next seven years.

There are three clear areas where the administration can act. It can increase the production of biogas and oils; support the development of renewable energy technology in the private sector; and provide funding for the re-training of unemployed coal workers.

These issues are surmountable, but require a long-term commitment from the government and will meet resistance in coal mining communities.
Trump’s efforts to remove regulatory barriers are only slowing the decline of the coal industry, not reviving the sector. Supporting renewable energy could revitalise those states where coal was once dominant and ensure US ‘energy dominance’ for years to come.

Oliver Thew is Programmes Manager at OMFIF.

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