In his economic speech Monday in Detroit, Donald Trump once again stood up for the coal industry and claimed that President Obama was responsible for huge job losses in coal country – a trend that a future president Clinton would continue.
“As a result of recent Obama EPA actions coal-fired power plants across Michigan have either shut down entirely or undergone expensive conversions,” Trump said. “The Obama-Clinton war on coal has cost Michigan over 50,000 jobs. Hillary Clinton says her plan will ‘put a lot of coal companies and coal miners out of business.’
“We will put our coal miners and steel workers back to work.”
Just a day later, newly released data from the federal government offers another perspective.
Sure, some Obama era regulations have been bad news for the industry. More broadly, coal is in a uniquely poor position, among energy sources, in the new environmental era that the world is now entering. Any utility company making decisions about its future energy mix will be thinking about this.
But equally bad news for coal has come in the form of very cheap natural gas, which has arrived in this country precisely because the fracking-driven shale gas industry — with which Trump is also seemingly aligned — has thrived during Obama’s presidency.
Sure enough, new data from the U.S. Energy Information Administration on Tuesday found that cheap natural gas is not only continuing to compete strongly against coal for a larger share of our electricity generation, but that it is perhaps faring better than ever in that competition.
“EIA estimates that the amount of electricity generated using natural gas reached a record high during July, surpassing the previous record set in July 2015,” the agency reported in its latest monthly Short Term Energy Outlook. “The record natural gas-fired generation was driven by competitive economics compared with coal (despite recent natural gas price increases) and by warmer-than-normal temperatures that boosted overall electricity generation.”
EIA now forecasts that natural gas will supply 34 percent of U.S. electricity in 2016, and coal just 30 percent. This is a simply stunning change for the typically slow-moved energy sector. In 2003, by comparison, coal was at 51 percent of our electricity and gas at just 17 percent.
This figure from EIA captures it well – look how much the blue bar, representing coal, has shrunken over time, even as the yellow bar, representing natural gas, has grown:
The new 2016 projection represents an even bigger gain for gas than EIA was forecasting as recently as March, when it thought gas would supply 33 percent of U.S. electricity, and coal 32 percent.
At the same time, the agency also downgraded still further its forecast of U.S. coal production in 2016. That is now expected to total 732 million short tons, a dramatic plunge from 895.4 short tons just last year.
“In 2016, coal production is expected to decrease by 163 [million short tons] (18%), which would be the largest decline in terms of both tons and percentage since at least 1949,” noted the agency. Back in April, in contrast, EIA was forecasting production of 752.5 million short tons, which would have merely been “the largest annual percentage decline since 1958.”
In sum, the terrible news for coal continues, but fracking has been doing the same thing to the nuclear industry as to the coal industry, so much so that New York state has now put in place a subsidy that appears to have successfully rescued one nuclear plant so far.
Someday in the future, it’s likely that renewable energy’s continual growth will become the major challenge to fossil fuels like coal — but that just hasn’t been the story so far. It has been a challenge, but the biggest challenge has been from another fossil fuel — gas.
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