Donald Trump is wrong again — it’s not government regulation that’s killing off the coal industry. It’s the marketplace. Even if that could be reversed, today’s coal mining is much less labor-intensive. It would never be a jobs bonanza. The idea that coal is suffering from some enviro-radical "war on coal" may still sell to the fake news crowd, but in the real world coal’s share in power-generation continues its long-term decline, supercharged by cheap natural gas as much as by government action.
As noted by Devashree Saha of the Brookings Institution in December:
In 2000, coal accounted for 51.7 percent of electricity generation, compared with just 15.8 percent for natural gas. By 2015, coal’s share had dropped to 33.2 percent, while natural gas rose to 32.7 percent of total generation.
Beyond that, there’s the dramatic development of renewables, the undisputed fuels of the future. As Bloomberg News explained last April:
Government subsidies have helped wind and solar get a foothold in global power markets, but economies of scale are the true driver of falling prices: The cost of solar power has fallen to 1/150th of its level in the 1970s, while the total amount of installed solar has soared 115,000-fold. [Chart.]
Sure, government policies have played some role in coal’s decline, but not the predominant one. Even old-fashioned bottom-line capitalists have no good reason to throw in with Trump on this fight — their money is increasingly going to renewable energy. "Renewables are beating fossil fuels 2 to 1" in power capacity investments, Bloomberg noted. [Chart.] And, of course, if you include the social costs of coal — especially the premature deaths that run into the tens of thousands each year — it becomes ridiculously expensive, like almost everything Trump puts his name on.
Consider the most recent release of the Sustainable Energy in America Factbook, earlier this year. It reported the following:
- Since 1990, more than 90 percent of cumulative generating capacity additions has been renewable energy or natural gas, and, in the past 10 years, over half (54 percent) of total additions have been dedicated to renewable energy resources.
- At the same time, the retirement of coal-fired power plants continues to shrink that fuel’s contribution to the power mix: 2016 saw 7 gigawatts of coal-fired capacity disconnect from the grid, after a record 15 GW retired in 2015. Another 12 GW are currently scheduled to retire within the next five years. These retirements are due to a confluence of factors, including competition from low-priced natural gas and aging boilers. As a result, coal provides a smaller share of U.S. power than ever recorded, with only 30 percent of electricity generated by coal-fired units in 2016. This figure contrasts with 48 percent in 2008 and represents the lowest share held by coal in at least the past 70 years.
Furthermore, the report continues, the retirement of coal-fired power plants and the construction of replacement plants fueled by natural gas, wind or solar is a structural change that, to use technical language, "should assure some permanency to U.S. decarbonization." In plain English, coal is dying.
The death of coal is a long-term process, to be sure: Last year marked the first moment when natural gas generation overtook coal, and short-term market fluctuations could reverse that temporarily. But the long-term trends are clear: Coal is in long-term decline, and the best thing we can do about it is manage it more wisely and compassionately — especially regarding the coal miners Trump pretends to love, rather than the coal investors — his Commerce Secretary Wilbur Ross, most notably — with whom his loyalty actually lies.
The decline in coal’s market share wreaked havoc in the industry, as reflected in two stories from SNL Financial in June 2015. One reported that, “The market value of publicly traded U.S. coal companies was sliced nearly in half over the past year, falling almost 50% since August 2014 amid deep market turbulence.” The other found that “more than three dozen coal operations have been forced into bankruptcy in just over three years.” It went on to explain:
A review of bankruptcy filings by SNL Energy found that most of the operators turning to the bankruptcy courts in the U.S. are primarily doing so in Central Appalachia. The coal mining region has been hardest hit by market pressures as the region's increasingly difficult geology has left neighboring coal basins with a competitive advantage as the entire sector battles increased regulatory scrutiny, weak export markets and inexpensive natural gas.
Ross is one of the very few who’s made out handsomely in this situation. In a December post for Random Lengths News, I wrote:
Ross is actually a specialist in making money of off stripping once-vibrant economic sectors — primarily steelmaking, coal-mining and textiles.
For example, on Sept. 24, 2004, Ross’s International Coal Group — a conglomeration of investors along with A.T. Massey Coal Co. — shut down six union mines taken over from Horizon Natural Resources in a bankruptcy proceeding, while keeping its non-union mines open. International Coal Group paid $786 million for the mines, but only because a federal bankruptcy judge voided $800 million in health insurance benefits owed by Horizon to more than 3,000 active and retired United Mine Workers of America union members.
How does this sort of mentality translate into taking care of miners and bringing back their jobs? Short answer: it doesn’t.
Don’t believe me. Believe Robert Murray, who is the founder and CEO of Murray Energy, the largest privately held coal mining company in the U.S. Murray sued to block Obama’s Clean Power Plan, and is personally pleased with Trump, whom he recently met with. But a recent Guardian headline said it all: “Top US coal boss Robert Murray: Trump 'can't bring mining jobs back'.” The story explained:
Trump has consistently pledged to restore mining jobs, but many of those jobs were lost to technology rather than regulation and to competition from natural gas and renewables, which makes it unlikely that he can do much to significantly grow the number of jobs in the industry, said Murray.
“I suggested that he temper his expectations. Those are my exact words,” said Murray. “He can’t bring them back.”
But that’s all right — or at least it could be, on two main counts: First, renewables are a source of many more jobs, and second, coal mining is so harmful that easing out of it with a sensible transition plan would leave everyone in coal country better off in the end.
On the job front, Kristen Kleiman, writing for the Climate Trust, laid out the basics:
In 2010, there were approximately 86,000 coal mining jobs — that equates to a loss of almost 30,000 workers in less than a decade. Contrast that rate with the jobs created by a low carbon economy. In 2010, renewable energy accounted for about 175,000 U.S. jobs. According to a recent U.S. Department of Energy (DOE) report, as of January 2017, that figure had grown to almost 800,000 workers employed in low carbon electricity generation. Most of the job growth in renewables can be attributed to solar and wind development. Of those 800,000 jobs, 374,000 were in solar and 102,000 in wind for a total of 475,000 jobs — more than two and a half times the number of jobs six years ago. And the outlook is positive. The DOE reports solar employment increased by 25% in 2016, while wind employment increased by 32%.
These new jobs are not just good for those who get them, but for their communities, too:
Growth in the solar industry means the creation of blue-collar jobs that stay local and cannot be outsourced to other countries. These professions involve locally based workers who, in turn, spend their money locally. And, importantly, jobs are in suburban and semi-rural areas where jobs are needed the most.
Of course laid-off workers from a dying industry need government support transitioning into a growing one. Government has a key role to play. But that role is working to facilitate moving everyone together in the direction the market is already taking us. As Kleiman notes, Massachusetts is the 26th sunniest state but ranks second in solar employment, with more than 15,000 jobs in 2016. The reason:
Because the state provided progressive tax and feed-in tariff incentives to bolster a renewable energy industry which, in turn, provided much-needed jobs in manufacturing and in trades like plumbing and electricity. Over half of Massachusetts’ solar jobs were in installation and 14% in manufacturing, with an average hourly wage of $21.
In contrast, the two most sun-drenched states, Arizona and New Mexico, “rank 7th and 27th in solar jobs respectively,” she notes. They had all the natural advantages, “but without the right incentives to attract early-stage capital, they have largely missed the boat.” The longer politicians cling to the past, and ignore the future, the more they will cheat people out of opportunities, the way these two states have done.
But there’s another dimension to the argument, as J. Mijin Cha explained recently in the American Prospect:
From a climate perspective, there is no doubt that coal mining should be phased out. Yet it is also true that coal mining should be phased out to protect workers and communities. From the beginning, coal mining exploited workers and communities. ...
For nearly 70 years in the post-Civil War South, tens of thousands of incarcerated men were forced to work in coal mines. The vast majority were black men convicted of minor offenses or “Black Code” statute violations that were passed to reassert white control in the aftermath of the Civil War.
The pay was atrocious — less than a dollar a day — and none of it went to the miners themselves. In addition to prisoners, child labor was exploited as well. Social progress in mining was a long, slow process. “While the Bureau of Mines was established in 1910, it was not given authority to inspect mines until 1941,” Cha notes. Even to this day, safety violations run rampant:
A 2014 NPR and Mine Safety and Health News investigation found that over the preceding 20 years, thousands of mine operators failed to pay safety penalties; indeed, most unpaid penalties were between two and ten years overdue. Among the study’s findings, the 2,700 mining company owners failed to pay almost $70 million in delinquent penalties and mines that didn’t pay their penalties had a 50 percent higher injury rate.
And then there’s black lung disease, which, after a long period of decline following passage of the 1969 Coal Mine Health and Safety Act, is now rising again. “Black lung disease is being seen in miners younger than 50,” Cha notes. “The inability of the 1969 act to protect these coal miners from a lifelong debilitating disease indicates that the legislation’s protections are inadequate to the conditions in today’s mines or, as evidenced by the high level of safety violations, are not being enforced — or both.”
Historically, the United Mineworkers of America has played a key role in making mines safe, and the union remains an important factor.
A Stanford University study published in 2012 found that unionized mines were substantially safer than non-unionized mines. Among the findings, the study found that unionization predicts an 18 percent to 33 percent drop in traumatic injuries and a 27 percent to 68 percent drop in fatalities. However, the number of mines that are unionized is on the decline. For the first time in nearly a century, unionized mines have completely disappeared in Kentucky.
As already noted, Trump’s commerce aecretary has helped contribute to this increasingly dangerous situation. There is simply no history of concern for miners’ welfare to be found on the industry side, or in the Trump administration. In fact, the negative health impacts of coal mining stretch far beyond what has traditionally been recognized. In Appalachia, the costs associated outweigh the economic benefits for the region as a whole, and are concentrated where production is highest.
More than a decade ago, Michael Hendryx began a series of studies of coal's health impacts in Appalachia. His 2009 paper, "Mortality in Appalachian Coal Mining Regions: The Value of Statistical Life Lost" co-authored with Melissa Ahern, "examined elevated mortality rates in Appalachian coal mining areas for 1979–2005," and concluded that the "human cost of the Appalachian coal mining economy outweighs its economic benefits." (The value of a statistical life has been calculated by a number of different methods, all reflecting the value that people themselves place on putting their lives at risk.)
This work drew the attention of Harvard researchers, and in 2011, Hendryx and Ahern joined a team of 11 researchers, headed by Paul Epstein, publishing an exhaustive study, “Full cost accounting for the life cycle of coal,” which included a much broader accounting of the costs involved, including damage due to climate change, public health damage from air pollution, fatalities due to rail accidents transporting coal, the public health burden in Appalachia due to coal mining, government subsidies and the lost value of abandoned mine lands.
The researchers estimated that "the life cycle effects of coal and the waste stream generated" are costing the public $300 billion to $500 billion every year. “Accounting for the damages conservatively doubles to triples the price of electricity from coal per kWh generated, making wind, solar, and other forms of non fossil fuel power generation, along with investments in efficiency and electricity conservation methods, economically competitive.”
Of course, wind and solar costs have continued to fall dramatically since then, and are now fully competitive or better, even without considering the externalized costs. Now that market forces by themselves favor shifting away from coal, it should clearly be government’s responsibility not to fight the inevitable, but to ensure the most just and equitable transition.
Toward this end, Cha points to a plan developed by Robert Pollin and Brian Callaci “that would ensure a just transition away from a polluting economy for fossil fuel workers.” Their article describing the plan last year argued: “A combination of better jobs and pensions will remove one political obstacle to a green transition — and it’s the right thing to do.” It is, they say, both a matter of simple justice and a matter of strategic politics. Given the justified political resistance if nothing is done, they write:
It follows that the global climate stabilization project must unequivocally commit to providing generous transitional support for workers and communities tied to the fossil fuel industry. The late U.S. labor leader and environmental visionary Tony Mazzocchi pioneered thinking on what is now termed a “Just Transition” for these workers and communities. As Mazzocchi wrote as early as 1993, “Paying people to make the transition from one kind of economy to another is not welfare. Those who work with toxic materials on a daily basis … in order to provide the world with the energy and the materials it needs deserve a helping hand to make a new start in life.”
This is particularly true in light of how many burdens and broken promises these workers have already been made to bear, and are still bearing today. Pollin and Callaci estimate that their "just transition" program would cost $500 million per year, about "1 percent of the annual $50 billion in new public investment that will be needed to advance a successful overall U.S. climate stabilization program." That modest annual commitment "would pay for income, retraining, and relocation support for workers facing retrenchments as well as effective transition programs for what are now fossil fuel–dependent communities."
That's pocket change in federal budget terms. Indeed, the authors point out it could be raised simply by setting aside some of the gains the federal government itself is expected to reap by raising its own efficiency standards, which are expected to save about $1.3 billion a year:
So the heavy lift here is not paying the cost of a just transition. It’s the cost of not paying it — a cost we’re paying right now. We’re paying it in all the ways that calculated by Epstein, Hendryx, Ahern and their colleagues, and in ways that can’t be counted as well. Those other ways have contributed to the poisoning of our body politic, along with the poisoning of our air and water. It’s time we stopped paying the deadly price for coal, and began paying the price for a more humane and efficient future.
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