Trump coal slump
Flanked by coal workers, President Donald Trump signed the American Energy Independence Executive Order last week, directing the Environmental Protection Agency (EPA) to review the Clean Power Plan, former President Barack Obama’s signature environmental policy. Unveiled in August 2015, the plan is intended to reduce carbon dioxide emitted from U.S. power plants 32 % by 2030. Because Trump cannot directly overrule this particular regulation, the EPA must come to a finding on whether it needs to be modified or repealed.
Shares of American coal mining companies jumped in response last Tuesday. Kentucky-based Ramaco Resources closed up more than 13 %, with impressive gains also made by Cloud Peak Energy and Peabody Energy.
As expected, the executive order prompted criticism from environmentalist groups and acclaim from business leaders and workers in the energy sector. Among the media outlets that heaped praise on Trump was the Wall Street Journal’s editorial board, which wrote that the president “deserves credit for ending punitive policies that harmed the economy for no improvement in global CO2 emission or temperatures.”
I believe the editors make a valid point that Obama’s plan accomplished too little at too great expense. However, there are two points on which I might disagree with others.
One, part of Trump’s goal here is to make America energy-independent, as the order’s name implies. Free of burdensome regulations, it’s believed, U.S. energy can be unleased, and we can become a net-exporting nation. The truth is that the U.S. has never been so energy-independent as it is now, even in the face of strict Obama-era rules and regulations. In January, the Energy Information Administration (EIA) forecasted that, even with the Clean Power Plan in place, the country would be a net energy exporter by 2026. Trump’s executive order is unlikely to move that target significantly. And remember, thanks to fracking and the recent lifting of a 40-year ban on oil exports, the U.S. is now a net petroleum exporter.
Two, Trump’s efforts are seen as benefiting the coal industry the most, but I think there are greater forces at work than regulations, as restrictive as they’ve become.