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Coal caucus chair bullish on opportunity, certainty under Trump

As the U.S. Congress moves to close for the year, the chairman of the Congressional Coal Caucus, Rep. David McKinley, R-W.Va., told S&P Global Market Intelligence that he is bullish about the chances to revive the beleaguered industry and, above all, deliver on the promise of sector jobs.

"This is one of those black-and-white issues," McKinley said referring to the choice between President-elect Donald Trump and Democratic candidate Hillary Clinton. "It was a choice we had to make and I believe that President Trump will be able to accomplish much of what he's trying to do."

Throughout the presidential campaign, Trump remained a favorite of coal-producing communities, promising to roll back Obama administration regulations often cited as detrimental to the sector while pledging to "put miners back to work."

McKinley said he did not expect a full return to coal production and employment levels of the past, "where we're not using automation," but he believes there are opportunities to bolster the industry in the years ahead, including opening the door to exports.

In practice, this means supporting the development of technology that decreases emissions from coal-fired power plants and exporting that progress to markets where coal is expected to increase or remain a substantial part of the energy mix, namely India and China.

By sharing that technology, McKinley said, he hopes to establish the U.S. as a leader in the field and clear the way for increased demand for domestically produced coal. McKinley said he had spoken with members of the Trump transition team about this goal and emerged confident that they would find an ally in the White House after Jan. 20.

"We have great facilities that could find ways of cleaning our natural gas, oil and coal as we produce it," he said. "And what I'd like to know is how we can export that technology — become the masters of that to reclaim the mantle of leadership in energy efficiency and clean coal."

McKinley complimented the selection of former Texas Gov. Rick Perry to head the U.S. Department of Energy, which would be responsible for advocating for more funds to support lower emission technology, most notably carbon capture and sequestration.

By exporting that technology to energy consumers in India and China, McKinley argued, the administration could clear the way for more industry jobs in the U.S. through increased demand for U.S. coal.

Further, McKinley said he hoped that progress abroad, combined with a promised pushback on Obama administration regulations like the U.S. EPA's Clean Power Plan, could persuade some to turn to coal once again for power generation.

"Once we get back to sensible regulations, you'll see a return of coal-fired power plants back here — probably not in a great amount," he said. "I think you'll see it come back, but we've got to find a way to burn it cleanly."

McKinley downplayed apprehension among some utilities about increasing coal's share of their energy mix, especially in light of low-cost natural gas.

Echoing other utilities from over the last year, representatives from Dominion Generation Corp, Duke Energy Corp., Dynegy Inc. were all asked on Dec. 6 at one of the industry's first post-election conferences how many coal-fired power plants they expected to be built in the next 10 or 20 years.

"Zero," they all answered.

While understandable, McKinley said such apprehension is a result of regulatory pressure and uncertainty during the Obama administration.

"If you've been beaten for eight years, not knowing if tomorrow there's going to be another regulation coming that's going to compound your problems with production, there is certainly an understandable reluctance to switching back to using coal again or starting to build new coal-fired power plants again," he said.

Under Trump, the caucus chair said, the power industry could expect more certainty about its regulatory future and could be more willing to give coal a second look.