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US coal industry ready to say goodbye to Obama


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US coal industry ready to say goodbye to Obama

The U.S. coal industry is preparing to say goodbye to one of its greatest enemies.

"His legacy will show that he is the greatest destroyer that the United States of America ever had," Murray Energy Corp. CEO Robert Murray said of President Barack Obama as he is now days away from leaving the office.

While coal jobs and production would both find room for growth in the early months of Obama's presidency, both took a dive that started in the final quarter of 2011 and continued through most of 2016. While crashing metallurgical prices and the surge in availability of natural gas also paved the way for the replacement of coal, environmental restrictions placed on mining and burning coal accelerated plant retirements.

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At mines, in coal company hallways and on the floor of coal conferences, Obama has been blasted for the demise of the industry. Murray claims Obama destroyed nearly half of the U.S. coal industry in his time in office — including what he said includes 411 coal-fired power plants, with another 56 potentially closing because of pending regulations.

"None of it can be reversed. None of it," Murray said. "This is permanent destruction by Obama and his Democrat supporters."

The sentiment runs deep. National Mining Association spokesman Luke Popovich said he suspects Obama's legacy on coal will be defined as the "first attempt by any president to deliberately destroy through regulation a major source of U.S. energy."

"Basing his legacy on a reputation as the 'climate change' president was a fundamental mistake for the leader of a fossil-energy-rich nation," Popovich said. "His hostility to the fossil fuel economy, in general, was a significant fact in his party's unexpected loss to a rival who promised if elected to systematically dismantle this legacy. I would add that he and his regulators will likely be responsible for the loss of more high-wage employment opportunities than any federal officials in post-war history."

Longview Power LLC CEO Jeffery Keffer oversees the Longview power plant, one of the newest and cleanest in the nation. While he views the Longview as an example of what coal could be if new plants were built to be cleaner, he said he is not sure that the market dynamics of low-cost natural gas and new gas plants coming online will allow any sort of regulatory relief to benefit coal's return.

"Perhaps it can serve to hold the market steady for a time, but the coal power production industry is facing a severe problem in that most coal-fired power plants are 30 to 40 years [old] and approaching the end of their useful life," Keffer told S&P Market Intelligence. "Unless something is done to replace the existing coal fleet with modern, efficient clean coal plants like Longview, this may end up being merely a hiatus before the economic demise of the industry, as has occurred in some other countries."

Keffer points out a quote that has been a go-to for an industry frustrated with the president.

"So if somebody wants to build a coal power plant, they can. It's just that it will bankrupt them because they are going to be charged a huge sum for all that greenhouse gas that's being emitted," Obama said, later elaborating on a version of a cap-and-trade system and means for promoting carbon capture technologies for coal.

That promise, Keffer said, was kept, largely in part because of some help from a boom in shale gas prices. He pointed out that it was notable the U.S. EPA resisted efforts to impose stronger restrictions on fracking for natural gas.

"With a huge boost from the success of the natural gas fracking industry, the Obama administration succeeded in bankrupting most the coal industry as he promised in 2008," Keffer said. "The regulatory actions taken by the EPA, Interior and Labor departments, all of which served to drive up the cost of coal mining and power generation, met the perfect storm of rapidly dropping natural gas prices."

The regulatory hurdles faced by the coal industry have been hefty. Limits on power plant mercury emissions put a huge dent in coal's U.S. market share. As late as mid-December, the Obama administration showed it was not done reining in coal by finalizing the Stream Protection Rule. The controversial rule adds restrictions to mining near streams, but the industry claims it goes too far.

Defending the rule is a primary concern for the organization, said Mary Anne Hitt, director of the Sierra Club's Beyond Coal program. The group has been successful in driving its agenda forward under Obama in a lot of areas.

"I think the big accomplishments from my vantage point are either closing or shrinking a lot of air and water pollution loopholes that the industry had secured for itself over many decades," said Hitt. "Whether it's the mercury standards for power plants or the Clean Power Plan carbon standards for coal plants, prior to the Obama administration, the industry had been allowed to dump all of that pollution into our air and water for free so regular people were paying for that pollution. That is something that began to turn around while President Obama was in office."

Still, the Sierra Club did not achieve everything they wanted under Obama. Particularly, she said, the Sierra Club failed to end the practice of mountaintop removal, a method of mining coal at a very large scale that has been linked to certain environmental and health concerns.

"We pushed very hard for very egregious loopholes to be closed and we succeeded on some fronts and others we didn't quite get there, but we made progress and that's what's important to note," Hitt said.