During his campaign, Donald Trump promised struggling coal mining communities that he would bring back all the jobs that have been disappearing over the past decades.  Outlining his energy agenda last May, Trump told coal miners to “get ready because you're going to be working your asses off!"  These promises, along with pledges to revive shuttered factories, are widely credited with Trump’s narrow electoral college victory in Rust-Belt and Appalachian states desperate for any light at the end of the economic tunnel.

Even by Trump’s low standard of factual accuracy, his promises to coal miners look particularly hollow. Don’t take my word for it, listen to Robert Murray, one of the country’s top coal barons and a fervent Trump supporter: "I've suggested to Mr. Trump that he temper his expectations."  Murray sees no possibility to rebuild the industry to its recent peak and expects the most that Trump could accomplish would be to stem coal’s decline in the US.

Out of the Money

The independent Institute for Energy Economics and Financial Analysis, which closely tracks the coal industry, believes that even Murray’s goal is too optimistic and that US production is likely to continue to decline in 2017, if at a slower pace than recent years.

Why?  Let’s start with simple economics. As Bruce Nilles, Director of Sierra Club’s Beyond Coal Campaign, recently noted:  “The economics of coal are increasingly bad.” State governments, utilities commissions (and now likely the Federal Government) can try to prop up failing coal plants, but they can’t evade the simple truth that coal is no longer cost-competitive with other ways of providing energy to the grid.

As Michael Liebreich and Angus McCrone with Bloomberg New Energy Finance put it: “Whatever President Trump may say, U.S. coal’s main problem has been cheap natural gas and renewable power, not a politically driven “war on coal,” and it will continue being pushed out of the generating mix.”

Cheap gas has gotten most of the credit in the energy and financial press for coal’s demise, and analysts have noted the inconsistency of Trump’s promises to dramatically grow production in both the gas and coal sectors, since they directly compete for power generation.  And increasingly, renewable energy is out-competing coal and even gas as the lowest cost source of energy.  To again quote Liebreich and McCrone:

“The good news is that renewable energy has – at least on a levelized cost of electricity… basis – clearly achieved the long-awaited goal of grid competitiveness. More than that, in many countries it now undercuts every other source of new generating capacity, sometimes by very considerable margins.”

Even fossil-fuel giant British Petroleum forecasts a rosy outlook for renewable energy, predicting that wind, solar and other renewables will account for 40% of new energy growth through 2035.

Coupled with these economic trends is the simple fact that US coal companies have fewer customers interested burning their product.   Out of 523 coal-fired utility plants in 2010, 246 have already either shut-down or agreed to binding schedules to cease operating.  This reduction is even more dramatic when you look at the reduction in coal-fired units (every utility plant is composed of a number of units).  Well more than half of the generating units (701 out of 1274) are slated for closure.

A dramatic example of this trend occurred this month when the largest coal-fired plant in the Western US, the Navaho Generating Station in Arizona, announced that it was stopping operations by 2019.  In announcing their decision to shutter the plant, the owners stressed coal’s poor economics, stating that they had “an obligation to provide low-cost service to our more than 1 million customers, and the higher cost of operating [the power plant] would be borne by our customers.”

With existing coal plants announcing closure plans on virtually a weekly basis, almost nobody is building new coal plants in the US.  One rare outlier, Mississippi Power’s $7 billion Kemper Power Plant, is an exception that proves the rule, finally opening while mired in cost-overruns and litigation.  Most coal plants are at or nearing the end of their useful lives, ensuring a rapid decline for the industry unless Trump can magically reverse the laws of economics.

How about Exporting Coal?

Can exports bail out the coal industry? Not likely. The US Energy Information Agency, long bullish on coal’s prospects, recently reported that coal exports in 2016 were down 20% to their lowest level since the financial crisis in 2009, and were expected to fall further in 2017.  Despite a short-term spike in global coal prices, attributable to China cutting its own coal production, the International Energy Agency and independent analysts expect global coal consumption to peak, and US exports to play a shrinking role in world markets. Goldman Sachs has gone even further, predicting that coal’s decline was “long-term” and “irreversible” based on trends in energy markets.

It is no secret that coal company stocks have been a terrible investment this decade.  The 13 largest US producers lost 92% of their value in the four years from 2011 to 2015, with many of the biggest companies (including Peabody, Arch, and Alpha) declaring bankruptcy.  Although coal stocks have been rallying recently on hopes that Trump’s election will buoy their prospects, they are still far below recent highs.  And major players are fleeing the industry. For example, Consol Energy, the largest US producer of bituminous coal for 90 years, is taking advantage of the market blip to shed its remaining coal assets.  Not exactly a vote of confidence for coal’s long-term prospects.

What about Jobs?

So with declining markets and gaining competition, it is hard to see any way the coal industry can grow. Further, Trump’s promises ignore the fact that coal industry employment has been declining for decades, even during times that coal production was increasing.  As reported in the New York Times, there are “now just over 50,000 jobs in the American coal mining industry, down from a peak of more than 250,000 in 1980.”  Compare this to the 374,000 people who are currently employed in the booming solar industry.

The causes for declining coal employment are familiar: increased productivity, automation, and a shift from labor intensive deep mines to surface mining.  Appalachia has been particularly hard hit, as accessible coal seams have played out and most production has moved to the Powder River and Illinois basins.

The bottom line: Trump’s promise to reopen coal mines and revitalize coal-dependent communities is as phony as many of his other pronouncements.  As Eric De Place from the Sightline Institute observes:  Trump “can't bring back coal jobs in any meaningful way unless he's capable of inventing a time machine." It’s past time to focus on 21st Century job-creation strategies for these workers, not raise false hopes chasing the chimera of a coal renaissance.

Ross Macfarlane managed Climate Solutions’ Business Partnership Program, which helped build support in the Northwest corporate community for strong climate and energy policy and private investment in solutions. He also led Climate Solutions’ Sustainable Advanced Fuels Program, which focused on  accelerating the adoption of low-carbon alternatives to petroleum fuels in transportation. Ross was a partner at Preston Gates & Ellis (now K&L Gates), where he managed the environmental law practice and represented a wide range of public and private clients and was recognized as a “Superlawyer” in the areas of Environmental, Transportation and Public law. A Northwest native, Ross is a graduate of Pomona College and University of Washington School of Law.‍