President Donald Trump shakes hands with West Virginia Gov. Jim Justice, whose business ventures have included numerous coal mine operations, on Aug. 4. Justice took to the stage in Huntington, W.Va., alongside Trump to announce that he was changing parties from Democrat to Republican.
Source: AP Photo/Susan Walsh
After posing with a "Trump Digs Coal" sign on his way up to the stage, President Donald Trump touted a coal comeback to supporters packing a West Virginia arena Aug. 4.
"I love the people of this state," Trump said. "I love your grit, your spirit and I love our coal miners and they're coming back strong. ... As president, we are putting our coal miners back to work. We've ended the war on beautiful, clean coal. We've stopped the EPA intrusion."
While the effect on the trajectory of coal's long decline is not yet clear, the Trump administration has ushered in many changes cheered by the industry. He is in the process of dismantling the Clean Power Plan affecting power plants, and he signed a congressional repeal of the Stream Protection Rule passed in the final days of the Obama administration.
Data shows that the U.S. coal industry has added only a handful of jobs — 258 net across the country — during the first and second quarters of the year, while total production has declined slightly. However, in West Virginia, the claim is fairly well-supported by U.S. Mine Safety and Health Administration data.
A recent analysis showed nationally, average coal mine employment is up just about 0.5% over the prior quarter while production declined for the second straight quarter, this time by about 5.9%. Coal jobs in West Virginia are up 18.3% year over year in the second quarter, according to a new S&P Global Market Intelligence analysis of federal data, and up about 12.2% compared to the fourth quarter of 2016. The year-over-year increase represents about 2,132 jobs, while the increase from the final quarter of 2016 represents about 1,493 jobs.
West Virginia coal production has also grown. With mines accounting for about 99.9% of all first-quarter production reporting second-quarter data, production is up 24.1 million tons, down slightly from 24.2 million tons in the second quarter but up 22.8% over last year.
Production from the state's Northern Appalachia coal mines, with its many producers using highly efficient longwall mining machines to extract thermal coal, has been somewhat flat since a nationwide coal rebound that began in the last half of 2016. In Central Appalachia, however, production has spiked. That region is rich with metallurgical coal, which has enjoyed a boom since international pricing after several quarters of plunging international demand and prices.
Trump was joined on stage by West Virginia Gov. Jim Justice, a coal mine executive, to announce the governor's party switch from Democrat to Republican. On Aug. 1, Justice's office sent out an email touting that "Jim Was Right" because coal had rebounded and severance taxes were going up. During his speech Justice said he has been talking with Trump about an idea related to boosting coal and manufacturing, but he did not go into details.
Arch Coal Inc. reported on its earnings call July 27 that metallurgical coal prices stabilized in late June and bounced back up a bit after a declining off a recent high. The company, like many selling into the met coal market, has its eye on China, which Arch CEO and Director John Eaves said appears on pace to increase coking coal exports by 20% or more in 2017. The improved pricing and thus opportunities for U.S. metallurgical coal producers, Eaves also pointed out, have been driven by "high-profile mine outages," but he also warned of some additional metallurgical tons coming online.
Trump specifically pointed to a recent report that coal exports, a relatively small portion of the overall market in the U.S., had increased 60%.
"The change you voted for is happening every single day," Trump told the West Virginia crowd.
Eaves said thermal coal — the bulk of U.S. tonnage — is still in "recovery mode," though there are signs of optimism. Growth in U.S. thermal coal is likely to be muted, as many utility companies have said they have no plans to build coal plants in the near future, leaving producers only to hope that current unused capacity might be dispatched.
"Remember, our industry builds assets that last for decades; a new administration in the White House can last four or eight years. So, our members are thinking they don't see any prospect for coal at this time," Karen Obenshain, director of fuels, technology and commercial policy for the Edison Electric Institute, said in late May. "We need to have options to build coal in the future, but at the moment we just don't see it, at least in our members."