During his campaign, President Donald Trump promised to repeal the Obama administration’s Clean Power Plan and to revitalize America’s coal industry.

At first glance, this may seem like a noble intention, putting struggling miners back to work and restoring America’s economy with jobs from its glory days. But it appears that our president is shortsightedly oblivious to one key component: Coal is dying.

And adding to that, Trump has never bothered to explain how he would stop the strong economic forces that are quickly making coal power obsolete.

Virtually no coal industry leader, lobbyist, or hack politician believes that coal has a viable future in the American economy.

Everyone else knows that it’s a dead industry walking. The only question now is how much money big coal could extract and how much damage it could do to our health, economy, and the climate before the industry sinks into the tar pit of history.

The only kernel of understanding deduced from Environmental Protection Agency (EPA) Administrator Scott Pruitt’s announcement last week was his statement that he intends to completely gut and emasculate the Clean Power Plan.

The Clean Power Plan was one of President Barack Obama’s central achievements during his second term. The plan established state-by-state targets for cutting 32% of carbon pollution from power plants by 2030.

Despite what the coal industry says, these were hardly radical targets. Rather, they were simply the slow acceleration of the inevitable decline that would have happened sometime in the near future anyway.

But politically, they were hugely important. They were a key part of the run-up of the Paris Agreement, validating our pledge as credible and allowing the other nations of the world to come together as a whole to build a new framework for dramatically cutting carbon pollution in the coming decades.

However, Trump has promised to pull the U.S. from the Paris Agreement and is doing everything he can to convince the American people that we can live in a 21st-century world with 19th-century power. It’s a move he’s pitched many times before, all pertaining to different issues — marketing that the past is the road to the future.

In some cases, this may be helpful. But in this case, it’s completely illogical.

And the rollback of the Clean Power Plan might not be as consequential as it seems. For one thing, no amount of deregulation will save the coal industry.

The simple fact is that the cost curves for renewable power, like wind and solar, are declining fast, while coal is getting more and more expensive to mine and burn. So, it’s highly unlikely that anybody will be able to build a new coal plant in America ever again.

Additionally, cheap natural gas has also gutted the coal industry. Why burn dirty coal when gas is cleaner, cheaper, and easier to transport?

But on the bright side, even without the Clean Power Plan, the U.S. is on track for meeting the climate goals set out by the Paris Agreement. Of course, keeping it intact would accelerate the progress, but it won’t hinder it.

While the Trump administration is taking a number of steps in bolstering coal-fired generation and rescinding climate regulations, electric utilities should still prepare for a very low-carbon future, former Energy Secretary Ernest Moniz stated at the National Clean Energy Summit a few weeks ago:

[Despite the White House’s withdrawal from the Paris Agreement,] there is no going back on the fight against climate and the innovation prize is enormous. We’re talking about multi-trillion-dollar markets. The real issue is that the U.S. needs to capture a big part of that market to keep its innovation edge.

So, why does the Trump administration think it’s so necessary to prop up coal? For months now, Energy Secretary Rick Perry has been trying to build a case, claiming that disappearing coal and nuclear plants have made the U.S. electrical grid less stable and more prone to blackouts.

Keeping them on life support through government-mandated higher prices would make our electricity systems more resilient, he claims.

But there isn’t a great deal of evidence to back up that claim.

After Perry commissioned a report on the issue in April, the Department of Energy’s (DOE) staff concluded that wholesale electricity markets — where utilities buy power before sending it to their customers’ homes and offices — were working just fine for the time being.

However, the DOE staff also theorized that the grid could potentially face serious reliability issues in the future as more coal and nuclear plants, which tend to run constantly and provide a constant source of electricity, power down.

The report also illuminated that blackouts during extreme weather events had drastically exposed weaknesses in the grid.

And Perry ran with this information:

In the wake of the devastation wrought by the Polar Vortex, Superstorm Sandy, and Hurricanes Harvey, Irma, and Maria, much more work needs to be done to preserve these fuel-secure generation resources that have the essential reliability and resiliency attributes needed to keep the lights on for all Americans in times of crisis.

In a nutshell: If the entire Midwest freezes over again, we need to make sure that there are plants with giant piles of coal around them to keep our electric heaters humming.

This is not a particularly convincing argument.

First of all, it’s worth noting that outside of those massive storms, power plants very rarely go offline because they can’t find enough stuff to burn.

Between 2012 and 2016, a mere 0.00007% of electricity disturbances involved a fuel supply shortage, according to an analysis by the Rhodium Group.

Coal probably isn’t the ideal solution to inclement weather, either. The dirty black lumps can freeze in extreme cold, rendering them completely useless.

As the report commissioned by Perry notes, coal plants still suffered widespread failures during the polar vortex, even if it did play a role in keeping the grid functioning.

Having a three-month supply of fuel on hand won’t necessarily help much during hurricanes, either, when the major problem tends to be downed power lines — as we’re seeing now in Puerto Rico.

If Trump wants to make sure people have electricity in an emergency, he should focus on figuring out how to keep houses connected even if they’re cut off from the grid.

Plus, there’s also just something mildly perverse about subsidizing coal to deal with superstorms that are fueled by global warming.

While the chances of making our electrical grid more stable are slim, forcing utilities to buy overpriced coal power will certainly make electricity more expensive for everyone.

John Hughes, president and CEO of ELCON — a trade group representing major industrial companies that buy electricity in bulk — gave the following statement regarding the current coal conundrum: “Rates would escalate phenomenally. In a normal situation, plants that can’t compete would go out of business. We see no reason for bailing out these plants.”

One reason would be, of course, for saving the handful of jobs in an industry Trump promised to protect, much to the planet’s peril.

On the other hand, billionaire, philanthropist, and former New York City Mayor Michael Bloomberg announced a new commitment of $64 million in support of Sierra Club’s Beyond Coal Campaign — just one day after the president announced his intentions of abolishing the Clean Power Plan.

Bloomberg had already invested $100 million in environmental protection and public health initiatives through his previous donations to the Beyond Coal Campaign and also through his open support to the environmental community over the years.

The partnership with Sierra Club has contributed to the decommissioning and retirement of over nearly 50% of the U.S.’ coal-fired plants. And, as a result, deaths from coal pollution have decreased a staggering 42% throughout the entire country.

The new funding will be used for maintaining the initiative’s progress, especially in the wake of the Trump administration’s proposed rollbacks of public health and environmental regulations.

After Trump announced his intentions to revive the coal industry to increase domestic energy production, Bloomberg labeled it as one of the worst ideas that have ever come from Washington.

He went on to comment that coal jobs aren’t coming back and that trying to force taxpayers to subsidize them back into existence will only lead to more death and disease. The Trump administration has yet to realize that the war on coal was never led by Washington, and therefore, Washington can’t end it.

And I couldn’t agree more. The term “war on coal” is a modern political euphemism analogous to the advent of motorized transportation being a “war on the horse and buggy” — it’s pure hyperbole.

Energy that’s produced from burning coal is dirty, leaves literally tons of residue, and is a finite resource — whereas wind, solar, and geothermal sources will last forever. Even natural gas is a cheaper and cleaner alternative to coal power for the time being.

There is virtually no future in the use of coal as an energy source and, therefore, no logical reason for continuing to use it.

A hundred years ago, coal was the engine and lifeblood of progress. But today, it’s the enemy of clean innovation and advancement.

And unfortunately for them, I don’t think that there’s anything Trump and his administration could do to halt its inevitable and welcome decline.

That’s all for now.

Until next time,

John Peterson
Pro Trader Today