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McConnell: Trump probably cannot save Ky. coal industry

Senate Majority Leader Mitch McConnell said rolling back the Obama administration's environmental rules would not be enough to bring back the coal industry in eastern Kentucky.

In an interview with McClatchy newspapers published Jan. 18, the Kentucky Republican said Congress would work with the incoming Trump administration to "remove as many of the government impediments as possible and give the coal industry a chance to survive."

McConnell's home state has been battered by a downturn in coal production and by declining natural gas prices that have helped natural gas become more competitive.

Kentucky coal production remains 60.1% off from levels reported in the U.S. coal market's peak in late 2011. Employment has fallen similarly, with 65% fewer coal mining jobs reported to the U.S. Mine Safety and Health Administration since the market peak.

"The recovery of the coal industry in eastern Kentucky and in other regions will not be completed overnight," Kentucky Coal Association president Tyler White told S&P Global Market Intelligence. "Our association is optimistic about the direction the Trump administration will take with regards to the coal industry. [President-elect Donald Trump's Cabinet nominees] give great promise to helping restore an even playing field where the government is not picking winners and losers."

McConnell has frequently blamed President Barack Obama and the U.S. EPA for coal's decline in Kentucky, declaring in a 2013 speech on the Senate floor that his state was "being ravaged by the EPA's excessive, overly burdensome regulations on coal."

McConnell offered a similar assessment of Trump's potential just after the election, telling reporters at a Nov. 11, 2016, news conference that it was hard to tell whether the GOP would be able to restore the industry "because this is a private sector activity."

Trump made coal mining jobs a centerpiece of his campaign, repeatedly promising to reopen shuttered mines and put miners back to work by repealing regulations often cited as detrimental to the coal industry. His message resonated in Kentucky, where he received 63% of the vote.

However, some analysts and industry leaders have expressed doubt that Trump can reverse the sustained decline in coal jobs, much of which has been attributed to automation, public concern about the environmental effects of burning coal and the collapse of the American steel industry.

Murray Energy Corp. CEO Robert Murray has made claims that 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."

Retired coal executive Nick Carter told S&P Global Market Intelligence in November, while he was serving as interim president of the Kentucky Coal Association, that a lot of the decline in production was a "rightsizing" of supply to meet demand.

"We will never see [recent highs in coal production] in our lifetimes again, I don't believe, unless the (EPA's) Clean Power Plan is amended in ways that let new coal power plants to be built," Carter said. " ... We're going to end up with a much smaller industry, one that has rationalized itself with regard to production."

The National Mining Association, though, still sees ways Trump can help the industry recover, at least partially.

"Whether Trump can bring coal back to its glory days is irrelevant," spokesman Luke Popovich told S&P Global Market Intelligence. "The important thing is his pledge to revitalize coal employment and improve the coal economy with specific plans to lift the Obama era regulatory burden from the industry and the communities and working families it supports. This starts with nullifying the [Stream Protection Rule] via a CRA and voiding the federal coal lease moratorium via executive action. Finally, his administration can address deep flaws in the CPP in the unlikely event it survives court challenge."