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Groups push for painless coal transition plans; Zinke heads for the door

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Groups push for painless coal transition plans; Zinke heads for the door

This week, power generators and the bodies that regulate them were presented with more options for a transition away from coal as the Trump administration continued its post-midterms shakeup with the announced exit of Interior Secretary Ryan Zinke.

Following up on a November report from the Sierra Club, this week Energy Innovation, an organization with a mission to "accelerate progress in clean energy," released four policy briefs aimed at helping regulators, utilities and investors work together to make sure customers benefit from a transition away from coal power generation.

However, some generators did not need the nudge toward an exit from coal. This week, New Mexico utility regulators approved a PNM Resources Inc. utility's long-term plan for power generation and delivery, including retiring the remaining units at the San Juan Generating Station by the end of 2022.

Retirements across the U.S. have continued despite strong support for coal power from the Trump administration, though this week saw the announced departure of another vocal industry supporter, Ryan Zinke. The Interior secretary announced his exit amid a series of investigations into his travel, political activity and potential conflicts of interest.

Despite losing a strong supporter of fossil fuel production on federal lands, the industry is expected to find an ally in Zinke's likely stand-in, Deputy Secretary David Bernhardt, a former oil and gas lobbyist. Like Andrew Wheeler, the former coal lobbyist temporarily running the U.S. Environmental Protection Agency since Administrator Scott Pruitt stepped down, Bernhardt is expected to continue his predecessor's deregulatory agenda, perhaps even more effectively given his experience from years of lobbying the agency he may now helm.

However, the administration's energy agenda could soon hit a roadblock with the appointment of New Jersey Democrat Frank Pallone as the incoming chairman of the House Energy and Commerce Committee, a panel with jurisdiction over issues broadly affecting Americans, including healthcare and biopharmaceuticals, energy and climate change, and telecommunications and information technology.

Pallone has pledged to pursue an aggressive agenda when Democrats take control of the U.S. House of Representatives in January, including addressing climate change and restoring environmental protections that have been cut by the administration.

Despite waning coal demand at home, this week the International Energy Agency said it expects global coal consumption to remain stable through 2023, growing about 0.2% annually.

The agency wrote in its report "Coal 2018: Analysis and Forecasts to 2023" that growth in India and other Asian countries is expected to offset the declining demand for coal in Europe and the United States as the world's coal consumption rises from 5,355 million tons of coal equivalent in 2017 to 5,418 million tons of coal equivalent in 2023.

That might prove beneficial for producers with access to the Asian market but limiting to U.S. producers that have largely looked to customers in Europe for export demand. This week, an S&P Global Market Intelligence analysis of coal exports to major European consumers showed that eastward traffic has continued to slow in recent years, falling 40.6% from 2012 to 2017 as many nations began moving away from coal-fired power generation.

In anticipation of further sector decline across the globe, the World Bank released a report last week outlining ways to prepare for what happens when the industry disappears from communities that have depended on it. In a report titled "Managing Coal Mine Closure: Achieving a Just Transition for All," the bank examined the shift in global markets and the resulting layoffs as operations folded or cut back on staff, devastating communities where coal is the dominant industry.