The Institute for Energy Economics and Financial Analysis today dismissed job-production claims that the Trump administration made this week with its rollback of emissions regulations and federal mining policies.
Tom Sanzillo, IEEFA’s director of finance, said the coal industry especially remains unlikely to recover, regardless of what the administration does.
“Market forces overwhelmingly favor natural gas-fired electricity generation and renewable energy, and the trend away from coal will continue,” Sanzillo said. “Coal is simply being outpaced. It is an industry in decline, and the fundamentals are inescapable.”
IEEFA research indicates momentum is all but unstoppable in a global energy transition that has brought structural change to coal markets and that has driven U.S. consumption of coal down 27 percent since 2005, from 1.02 billion tons to 739 million tons in 2016, its lowest level in almost 40 years. The outlook for U.S. coal remains dim (see IEEFA Report: IEEFA U.S. Coal Outlook 2017: Short-Term Gains Muted by Prevailing Weaknesses in Fundamentals), and will continue to be shaped by five forces in particular in 2017:
Sanzillo noted the broad absence of demand on the part of utility companies and public service commissions for new coal-fired plants. And he said the coal industry’s gambit to promote “clean coal” technology is ultimately doomed by the reality that such schemes remain unproven and stand to remain economically unviable ever if they were ever to come to fruition.
“Our research finds no U.S. utility adding now or in the future to its coal-fired rate based. This trend will continue to cripple the coal industry and it will unfortunately bring further economic distress to communities that rely on coal mining,” Sanzillo said. “The new energy economy brings opportunity, however, and localities and regions that are in transition require and welcome forward-looking investment now.”
He said likewise the administration’s reversal of a moratorium on taxpayer-subsidizes federal leases to coal companies will not affect core trends.
“We see zero impact on employment,” Sanzillo said.
Media contact: Karl Cates [email protected] 917-439-8225
The Cleveland-based Institute for Energy Economics and Financial Analysis (IEEFA) conducts research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.
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