U.S. coal production, jobs see double-digit declines, future of Obama’s Clean Power Plan unknown

by Wesley Brown ([email protected]) 249 views 

As President Barack Obama’s Clean Power Plan hangs in the balance with the likely selection of a new U.S. Supreme Court justice under a Donald Trump presidency, U.S. energy officials said coal production, consumption and employment saw double-digit declines in 2015.

According to new data from the U.S. Energy Information Administration, U.S. coal production dropped by more than 10% in 2015 to 897 million short tons (MMst), the lowest production level since 1986. Production in all three major coal-producing regions (the Appalachian, the Interior, and the Western) declined, as consumption of coal for electric power generation, industrial, and other uses fell by 13% to 798 MMst in 2015.

Employment at U.S. coal mines fell 12% to about 66,000 employees in 2015, the lowest level since EIA began collecting coal mining employment data in 1978. The declining trend has continued into 2016 as indicated by the most recent weekly coal production data. U.S. year-to-date coal production as of Oct. 29, 2016, totaled approximately 607 MMst, 20% lower than the comparable year-to-date coal production in 2015.

On Wednesday, just as the EPA data was release, coal industry officials congratulated Donald Trump as the new president-elect and encouraged him to rein in transformative changes in the industry under the Obama administration.

“The coal sector has been devastated by lower demand and job loss in recent years due to the mounting impact of regulations pointed squarely at our industry. These regulations have significantly increased the cost of coal for electricity generation and industrial use, made it less competitive against other fuels, and resulted in the closure of a large number of coal plants,” said American Coal Council (ACC) CEO Betsy Monseu said.

Nationwide, the Appalachian region’s coal production in 2015 was 221 MMst, the lowest level since 1978. Coal production in Kentucky and West Virginia fell 21% and 15%, respectively, from 2014. The Interior region’s coal production declined for the first time in six years, falling to 167.4 MMst, 11% lower than in 2014. Illinois, the largest coal-producing state in the region, declined by 3.2% to 56.1 MMst.

The Western region’s coal production in 2015 decreased by 35.4 MMst to 507.4 MMst. In Wyoming, the largest coal-producing state in the United States, coal production decreased by 15.4 MMst to 375.7 MMst, the lowest level since 2002. Montana’s production was 41.9 MMst, 6.1% lower than in 2014.

In addition, total U.S. coal consumption in 2015 was 798 MMst, a decrease of 13% from 2014 and the lowest level since 1986. Power sector coal consumption fell in part because of increased competition from natural gas-fired and renewable electricity generation.

Coal consumption in the industrial, coke, and commercial and institutional sectors was 58.6 MMst in 2015, a 9% decrease from 2014. Coal consumption so far in 2016 is also declining, similar to the trend in coal production. Data for the first seven months of 2016 indicate that U.S. total coal consumption is 23% lower in 2016 than in the first seven months of 2015.

West Virginia and Kentucky had the largest declines in the average number of employees in 2015, decreasing by 2,840 (16%) and 2,013 employees (17%), respectively. Although there were fewer coal mine employees in the United States in 2015 than in 2014, the average production per employee-hour increased slightly to 6.3 short tons per employee-hour.

The coal industry’s decline comes even as the outcome of the Clean Power Plan is expected to be altered under the Trump administration, which has unveiled plans to kill the centerpiece of the Obama administration’s climate change policy and revamp the federal Environmental Protection Agency (EPA).

In late September, the full bench of the U.S. Court of Appeals for the D.C. Circuit heard oral arguments on the far-reaching federal Clean Power Plan as opponents and supporters argued their opinions known opinions before the court. The nearly four-hour “en banc” hearing before 10 members of the D.C. appeals court offered litigants a final opportunity to argue for or against the EPA’s precedent-setting mandate to force states to reduce carbon dioxide emissions by an average of 32% by 2030.

Originally, a three-judge panel of the federal appeals court had planned to hear oral arguments on the merits of the states’ case on June 2, but later rescheduled the September hearing. D.C. Circuit Judge Merrick Garland, President Obama’s Supreme Court nominee, did not participate.

According to most legal analysts, a vacant seat on the high court following the death of Justice Antonio Scalia will likely delay the Clean Power Plan docket until next year when Trump takes residence in the White House. Once a ruling is handed down, the losing side is likely to appeal and send the case back to Chief Justice Roberts and the high court for a final verdict. If a new justice is not seated at the time, a tie vote would uphold whatever ruling the 10-member federal appeals court decides.

In addition, with a new EPA administrator at the helm of the federal agency, the Trump administration will have the option of pulling the case now before the nation’s high court. During his campaign, Trump has said several times that he plans to get rid of the EPA and has called climate change a hoax.

Even with the likely death or major changes to the Clean Power Plan, many utility across the U.S. are already moving away from coal-fired power production. AEP, the Ohio-based parent company of SWEPCO, announced earlier this year it plans to shut down four coal-power plants across the Midwest.

On Wednesday, East Coast utility giant Duke Energy announced it has retired seven coal plants in the Carolinas, with plans in the early stages to demolish the Buck Steam Station and Riverbend Steam Station in Salisbury and Mount Holly, N.C., respectively, and continuing demolition of portions of the W.S. Lee Plant in Belton, S.C. At many locations, retired coal plants have been replaced by new, more efficient natural gas plants, Duke Energy officials said.

In August, the EIA said natural gas-fired electricity generation in the United States is expected to reach a record level this year, providing an average of 3.8 million megawatt hours per day in 2016, or 4% higher than in 2015.

Natural gas-fired generation first surpassed coal generation on a monthly basis in April 2015. Natural gas-fired generation has surpassed coal-fired generation in most months since then and is expected to continue to exceed coal generation through the remainder of the year, ultimately providing 34% of the U.S.’s electricity generated this year.

Coal’s share of the 2016 U.S. electricity generating mix is expected to be 30%, nuclear, 19%, and renewables, 15%. With a significant loss of coal demand made permanent due to plant closures, The ACC’s Monseu said it will be critical to protect the investments made in the remaining coal generation plants.