Trump Can’t Change Coal’s New Reality

America’s coal industry has struggled mightily over the past decade and has watched its share of the power market steadily decrease. President Trump promised to revive U.S. coal during his campaign and has made overtures towards following up on that promise in 2017, but he hasn’t yet accomplished anything of real value. If you believe the CEO of CSX, a railroad company responsible for hauling vast quantities of American coal, the energy source doesn’t have much of a future. The FT reports:

CSX, a freight railroad company with origins in the bituminous coal seams of Appalachia, will not buy a single new locomotive to pull coal trains, chief executive Hunter Harrison told analysts on Wednesday. […]

Lance Fritz, chief executive of the Union Pacific railroad, said in a recent interview that Mr Trump’s move to scrap Clean Power Plan regulations was unlikely to grow its coal business. “It takes away a headwind,” he said.

None of this will come as a surprise to regular readers, though it will certainly dishearten Trump’s base, which has been hoping for a much-needed domestic victory in the President’s war on what he calls the “war on coal.” But of course the truth is that coal hasn’t faltered because of overregulation or overzealous green initiatives put in place by Trump’s predecessor. No, this shift in our national power mix has come courtesy of market forces.

The shale boom unleashed a flood of new natural gas supplies, and that glut has driven prices of that fossil fuel to a point low enough where many coal producers can no longer compete on price. For everyone not intimately involved with the coal industry (the vast majority of Americans), that’s a welcome development—burning natural gas doesn’t pollute the local environment nearly as much as coal, and emits roughly half as much greenhouse gases. Moreover, this inter-energy source competition is helping keep electricity prices down for consumers.

If the President wanted to revitalize coal, he’d have to go after fracking. That seems implausible, even for him. Trump won’t back down from his “war on coal” rhetoric because it scores political points, but those with a real financial stake in what happens next to the industry can see the writing on the wall. For proof, look no further than the rail industry.

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