Industrial plant in Buchanan County, VA.
The New York Times yesterday (19-November-2016) published a piece detailing the truth about the future of coal workers. Titled “A Bleak Outlook for Trump’s Primises to Coal Miners”, it is worth a read for those truly concerned about coal workers in West Virginia, Pennsylvania, and Ohio.
From the piece (emphasis mine):
The United States coal industry and the jobs that support it have been in decline for decades as a result of environmental concerns, automation in mining and slowdowns in manufacturing industries that burned coal for power.
And these days, no matter who is president, coal is at the mercy of market economics. Coal’s No. 1 rival is cheap, cleaner-burning natural gas — which could become an even more potent competitor under the incoming administration. The probable easing of restrictions on pipeline building and loosening of rules on gas exploration and production would mean more natural gas reaching the market.
“I don’t think the Trump presidency will have a material impact on bringing coal miners back to work,” said Ted O’Brien, a coal analyst at Doyle Trading Consultants, a leading energy industry research firm.
The bleak outlook for coal may explain why some of the industry’s executives have been reluctant to comment on how the Trump presidency may help their business: They may be wary of raising false hopes among their workers. And many may be reluctant to repeat past industry arguments that climate change was a hoax. Instead, coal producers would rather have tax incentives to support environmental improvements for coal-fired plants, as a way to ensure coal’s long-term viability even beyond a Trump administration.
Beyond the declining demand for coal, there has been an even more fundamental factor behind the shift in coal mining employment, which peaked decades ago. As with those in many industries, jobs in mining have fallen victim to automation. High-tech shears can now shave coal from underground seams — work that formerly required hundreds of miners. Surface mining, which has been increasing in recent years, has also replaced many workers with heavy machinery.
As a result, there are now just over 50,000 jobs in the American coal mining industry, down from a peak of more than 250,000 in 1980.
“The industry is simply not going to produce the number of jobs that were historically available in the coal fields,” said Patrick C. McGinley, a law professor at West Virginia University, who focuses on coal issues.
Other marginal measures the Trump administration might be able to take on coal’s behalf, industry executives say, include rolling back the rules that protect streams from surface mining and easing those for leases and royalties on coal mined on federal lands.
This bleak outlook for coal workers is echoed in this 2015 research piece by Wood-Mackenzy, an energy industry research firm (emphasis mine):
Close to 17% of forecast 2015 US coal production is at risk of idling or closure, totalling 162 million short tons (Mst), as these mine’s total cash costs plus sustaining capital expenditures exceed current market pricing, according to Wood Mackenzie’s latest coal market outlook.
Wood Mackenzie says that the majority of the coal at risk is produced in Central Appalachia where approximately 72% of the total output is unprofitable. Years of declining productivity, thinning seams, increasing strip ratios, more stringent government regulations, and a high paid workforce have taken their toll and made Central Appalachia the highest cost region within the US. Other US regions also have substantial amounts of coal at risk, ranging from 47% of production in Southern Appalachia to a low of eight percent in both the Western Bituminous and Powder River Basin. In aggregate, this equates to approximately 14% of US thermal coal production and 58% of metallurgical coal production being at risk.
However, Wood Mackenzie emphasizes that for prices to rise, fundamentally one of two things must happen: either the global demand for steel and power must increase or the supply of coal must decrease. Hazelton adds, “The growth prospects for steel demand remain tenuous at best as many countries’ economies remain fragile. The recent strength of the US dollar also encourages non-US producers to grow their production as a strengthening US dollar compared to their local currency effectively lowers their costs of production when denominated in US dollars.“
The facts are that the demand for coal is not going to increase as a result of any of Donald Trump’s promises. If anything, his blundering in foreign affairs and China will further reduce demand for coal. Automation is already taking away jobs. Coal workers are already viewed as “highly paid” — expect increased pressure for them to further reduce wages.
Suffering coal workers in West Virginia, Pennsylvania, and Ohio are in fact about to learn that their decision to put Donald Trump in the Oval Office will make their lives worse rather than better. They will lose, not gain, jobs. They will lose, not gain, wages. More mines will close. Meanwhile, more miners will die from toxic chemicals dumped into the environment. More miners will die or be injured on the job as the new administration slashes oversight and regulation of the coal industry. More of their children will be trapped in the misery of poverty as schools in the region continue to decline, college becomes less and less accessible, and the local economy spirals ever downwards.
The election of Donald Trump is good news for coal mine owners and industry executives. Those small groups will see huge reductions in their taxes while they are freed to “diversify” by shifting their investments to more profitable industries. Coal workers have just been conned by today’s best con-man and turned their backs on their strongest protectors.
Those who genuinely care about coal miners know that life in this region is about to get many times worse for them.