Coal news and updates

Donald Trump’s holiday gift season actually starts in January, the 20th to be exact. From then he must deliver on all the promises he made in his presidential campaign over the past year or so.

One of those promises was to hand out sacks of coal, not to the bad kids, but ideally to every American. Get everyone using more coal: stop this fad for renewable energy, and keep the Environmental Protection Agency in check over clean-air regulations that reduce demand for coal.

 

Produce more coal and the miners in states such as West Virginia can get their jobs back, the thinking goes. That state has suffered the brunt of job cuts in that sector.

 

Employment in the US coal mining industry has dropped 40 per cent over five years. Of the 36,000 mining jobs lost in the country, almost half went in West Virginia.

 

Unfortunately for miners, Mr Trump also favours more exploratory drilling for oil and natural gas, especially in shale formations. Shale gas, along with oil, is a major US success story.

 

Gas production has surged over the past decade. That gas competes directly with coal in the generation of electricity. Though a switch to renewable energy is partly to blame, there is no doubt that soaring US gas production has meant lower coal output.

 

What is also true is that one of the states where local gas production has jumped the most in recent years is West Virginia. In 2015, it was behind only Pennsylvania and Ohio for increases in natural gas output.

 

It follows from all this that the rate of change in miners’ employment levels depends on the price of gas. Over the past decade, coal mining jobs have risen or fallen, with a six-month lag, with movements in the gas price.

 

Indeed, the wipeout in coal employment has begun to reverse in recent months. US gas futures have roughly doubled since the lows of February. In turn, coal mining employment shows signs of recovering, or at least the problem looks less bad than it did.

 

Really, Mr Trump should deliver lumps of coal to the gas drillers. Perversely, it seems that coal mining jobs would be more likely to return with less gas drilling if that meant higher gas prices.

Source: FT.COm