February 17, 2017 Read More →

In Seeking White House Intervention, Protectors of Arizona Coal Plant Battle Market Realities

Amy Harder, Russell Gold, and Timothy Puko for the Wall Street Journal:

President Donald Trump’s promise to help the coal industry could be facing its first big test: the decision earlier this week to close a large Arizona coal-burning power plant, and a demand that Mr. Trump prevent that shutdown.

Majority owners of the Navajo Generating Station in Page, Ariz., one of the biggest coal plants in the country, said this week they won’t keep running the plant after 2019 because it is more economic to buy natural-gas-fired electricity than to generate power by burning coal. These kinds of market-driven decisions, rather than regulations, have driven down coal use across North America in recent years.

But the president of the Navajo Nation—whose reservation is home to both the plant and the coal mine that serves it—says his tribe opposes the plant’s closure and the loss of 800 jobs that depend on it. He is calling on Mr. Trump to act on his promise to save the ailing U.S. coal industry with special treatment for Navajo Generating Station that would be akin to the kinds of concessions Carrier Corp. got for keeping jobs at a factory in Indiana.

Navajo Nation president Russell Begaye said he has been in continual contact with White House officials since the inauguration, including three or four times in the last week.

“We are going to seek a solution based on what we feel needs to be done,” Mr. Begaye said. “Tax breaks, subsidies, a real strong verbiage from the White House, from President Trump himself.”

While Carrier-like breaks from the government might help to subsidize the Navajo Generating Station, coal-fired power is struggling to compete with natural gas, and the coal sector’s outlook remains bleak.

If Mr. Trump follows through on campaign pledges to support coal mines and plants, he would be fighting against a market reality. An abundance of low-cost natural gas, a fuel that competes directly with coal to generate electricity, has caused permanent shifts in the U.S.

“The reason we’ve had such a decline in coal? It’s not the regulations. It’s natural gas,” said Hans Daniels, chief executive of Doyle Trading Consultants, a coal market analysis firm. “If you are in the water and you’re being attacked by sharks, you’re not going to worry about being stung by jellyfish.”

Since May 2013, when the last large coal-burning power plant was commissioned, 246 coal plants have been shut down in the U.S., according to federal data. Over the same period, 305 natural gas plants have opened.

Full article ($): Arizona Plant Poses First Test of Donald Trump’s Support for Coal Sector

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