Calling it a "bad deal," President Donald Trump confirmed June 1 that he will ditch the Paris agreement, while the battered coal industry expressed divided views on the controversial global climate accord.
The president made the announcement from the White House Rose Garden, with U.S. Environmental Protection Agency Administrator Scott Pruitt and other administration officials in attendance.
"In order to fulfill my solemn duty to protect America and its citizens, the United States will withdraw from the Paris climate accord ... but begin negotiations to re-enter either the Paris accord or an entirely new transaction with terms that are fair to the United States, its businesses, its workers, its people, its taxpayers," Trump said.
The president provided estimates from NERA Economic Consulting that the Paris deal would cost the U.S. up to 2.7 million jobs by 2025 and sharply decrease domestic coal and natural gas production. The deal also would provide an advantage to other countries, allowing China to continue building coal plants and letting India raise its coal production while the U.S. coal industry struggles, Trump said.
"This agreement is less about the climate and more about other countries gaining a financial advantage over the United States," Trump said. "I was elected to represent the citizens of Pittsburgh, not Paris," he added.
However, the U.S. coal industry had been somewhat split on the potential downsides of the Paris Agreement on climate change. On the one hand, many saw the agreement as a direct attack on coal and miners, while others saw the opportunity for the U.S. to inject talk of technology such as carbon capture and storage into international negotiations, securing more long-term prospects for coal under the assumption that attempts to lower carbon dioxide emissions will continue.
"The president is a tremendous advocate for coal and its essential role in America's future energy mix, and we are confident that he will factor that strong support into his decision on the Paris agreement," Arch Coal Inc. spokeswoman Logan Bonacorsi said in a statement.
Richard Reavey, Cloud Peak Energy Inc.'s vice president for government public affairs had warned in April that "things are not going to get better in terms of the international approach to climate policy without the U.S. at the table." He said remaining engaged would allow the U.S. to push policies that would stop "persecuting coal."
On the judicial side of the industry, the Western Organization of Resource Councils, or WORC, and Friends of the Earth are reviving a 2014 lawsuit, filed against the U.S. Department of the Interior, in response to Secretary of the Interior Ryan Zinke's decision to stop the programmatic environmental impact statement process for the federal coal leasing program.
"For a federal agency to ignore the huge new body of knowledge acquired since 1979 is just whistling past the graveyard," said Bob LeResche, chair of the Powder River Basin Resource Council and past chair of WORC. "This is not how a responsible nation operates."
The week also saw the U.S. Department of the Interior extending the deadline for nominations for its Royalty Policy Committee until July 3. Interior Secretary Ryan Zinke created the committee to examine the value taxpayers get for developing resources on federal and tribal lands, after the moratorium on new federal coal leases was lifted.
This week Seaport Global Securities LLC's noted "massive weakness" in Powder River Basin coal prices the last month, a phenomenon attributed to bloated stockpiles and a mild winter.
"According to our contacts, stockpiles are still bloated, but they're getting progressively better rather than progressively worse," the analysts wrote.
The financial services firm also suggested the closely watched quarterly benchmark for metallurgical coal pricing might be a tool of the past.
Analyst Mark Levin wrote in a May 29 note that the largest player in the seaborne metallurgical coal space, BHP Billiton, has been pushing customers away from quarterly met coal pricing for the past few years.
"Should the quarterly pricing system go away, we think it would be a good thing. If the last five years have proven anything, it's that the met price is simply too volatile to lock in a price for three months," Levin wrote.
Lastly, Alpha Natural Resources Inc. announced it divested substantially all of the assets of two separate operations in central West Virginia, a coal mining complex and a natural gas operation. The divestiture is part of Alpha's strategy of selling nonstrategic assets as the company aims to its make its operations leaner.
"With these significant divestitures, we will transfer 28 mining-related permits, reduce surety bonding by approximately $3.5 million, eliminate future reclamation spending at these sites, and further reduce our annual holding cost for inactive and idle properties by approximately $1.1 million," Alpha CEO David Stetson said May 30. "Additionally, $2.7 million in self-bonding will be eliminated as part of these sales, which will assist [Alpha] in meeting its obligations to the state of West Virginia."