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'Aggressive' move to boost coal adds to effort to dismantle Obama energy legacy


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'Aggressive' move to boost coal adds to effort to dismantle Obama energy legacy

This is part two of a two-part series examining how the Trump administration has worked to fulfill his campaign promise to revive the U.S. coal industry. This installment looks at pro-coal policies that have been enacted, while part one focused on the industry-friendly appointments to key administration posts.

President Donald Trump's rapid and broad support of the coal industry is pivoting from not just undoing the legacy of the Obama administration, but also proactively seeking to boost the sector.

A proposal from the U.S. Department of Energy to help certain coal plants recover their full costs was well-received by coal producers, but at the expense of much of the rest of energy sector. The policy is just the latest in a string of actions supporting the coal sector including moves to repeal the Clean Power Plan, reversing the Stream Protection rule, appointing officials sympathetic to the industry and even helping to arrange trade deals with other countries.

"Unlike past administrations, this one appears to have no positive agenda, other than to weaken and roll back environmental protections," said Jody Freeman, director of the Harvard Law School Environmental Law Program and a former official in the Obama White House. "They have no strategy to address public health risks, or manage energy security and climate change simultaneously, which is what the Obama administration tried to do. They are focused on dismantling, not building."

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Those in the coal industry who spent years fiercely opposing actions coming out of the White House have been pleased to find an administration ready to help.

"We will continue to work with President Trump's administration to preserve low-cost, reliable electricity in America, and to protect the thousands of jobs and family livelihoods that rely on the United States coal industry," coal producer Murray Energy Corp. said in an Oct. 4 statement.

Murray has declined to go into details about the company's interactions and influence in the White House, but CEO Robert Murray has attended multiple White House events in support of policies favorable to his company. He was a relatively early backer of Trump, calling him the "horse to ride" just a few days after a May 2016 trip in which Trump traveled to West Virginia and said he was bringing back coal production and coal jobs if elected president.

In an interview with S&P Global Market Intelligence, Murray, who once said he was one of Trump's "energy guys," laid out several priorities he would like to see the administration accomplish. Within months, the administration had achieved many of those initiatives, including pulling out of the Paris Agreement on climate change, though calls for drastic cuts to agencies have gone unfulfilled.

Murray Energy provided an updated list of desired actions because while Murray has been "extremely pleased with the actions taken" in order to protect coal, "there is much more which must be done." Murray's wishlist includes declaring an emergency in regard to grid reliability in a bid to protect coal, overturning an endangerment finding that allows the U.S. EPA to regulate carbon dioxide, eliminating rules limiting mercury and ozone from power plants and removing other restrictions on power plants.

More broadly, Murray is also seeking to eliminate tax credits for the wind and solar industry, repeal the Fair Labor Standards Act Overtime Rule and secure investments in "clean coal," though he does not include carbon capture projects in that definition.

Jud Mathews, a law professor at Pennsylvania State University's law school, said that while it is not unusual for an administration to undo the work of a previous president, the Trump administration seems to have been particularly aggressive in rooting out the environmental legacy of the past occupant of the White House.

"Administrations often will use the various levers they have to encourage certain kind of investments that are beneficial for one reason or another," Mathews said. "This administration seems to be really doing a frontal attack, at least in an environmental context, that the previous administration tried to do."

The latest move by Energy Secretary Rick Perry asking FERC to offer a boost to coal and nuclear power plants for reliability purposes was seen by many as the agency becoming even more aggressive in its support for coal.

"None of the actions before the DOE directive to FERC had any significant effect," said Richard Pierce, professor of law at George Washington University. "That action would have enormous effects. It would, among other things, massively increase U.S. emissions of carbon dioxide. The courts are highly unlikely to allow that to happen."

Freeman said she was particularly concerned about the lost time between Trump and another administration for progress on climate action. While the long-term effect of relaxing environmental rules will be difficult to gauge, she said efforts like slashing agency budgets, discrediting science and transferring and reassigning career employees could have lasting effects that are difficult for the public to see.

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Still, Freeman said, many of the changes and "pro-coal optics" are unlikely to change the underlying market dynamics of natural gas out-competing coal as a fuel source. She doubts the conversation changes much "among sophisticated players who recognize the market dynamics."

Luke Popovich, a spokesman with the National Mining Association, however, said members are reporting "brisk business and of course big improvement over last year at this time." He said that in the short term the future is brighter thanks largely to a change in the political environment.

He added that longer-term, coal's future is "more dicey" as natural gas prices are expected to remain rather low while renewable fuels continue to grow in market share.

"What's missing in the conventional wisdom is that this turnaround has likely occurred not only because of specific regulations lifted from our backs in the past six months, also it's due to just the rise in business confidence that comes from replacing a 'no-growth' government by a 'pro-growth' government," Popovich said.

Coal companies themselves have credited the Trump administration with some change in sentiment as well. Producers have publicly praised a visit from a top environmental official, suggested miners are more confident about their jobs and one company has even credited funding for its new thermal coal mine to the administration.

Moody's analyst Anna Zubets-Anderson said she thinks natural gas plants will continue to displace coal while renewable energy sources gain share as well. She said the policy changes offered by the Trump administration are unlikely to shift the planning of utilities making long-term generation decisions.

"It helps on the margins," she said.

As for the recent improvement in coal markets, Zubets-Anderson largely attributes that to market forces and lucky timing for a Trump administration promising a comeback.

"The coal industry is doing better now than a couple years ago, but the general sentiment of shying away from investing in coal, to me, has not changed," she said. "I'm not seeing a significant change in sentiment due to Trump administration policy."