Modeling Trump's coal conundrum
An analysis by an energy-focused consultancy circulated Tuesday concludes that President Trump's sweeping push to bolster fossil fuels across the board by cutting regulations and production constraints means natural gas will likely keep and even expand its advantage over coal in electricity markets.
Why it matters: The Brattle Group's analysis, which was presented to the Energy Bar Association Tuesday, highlights a major tension running through Trump's pro-fossil fuel initiatives: Helping coal is tougher when you're supporting natural gas too.
What they examined: Brattle forecast the production and employment effect of pro-coal policies, like killing EPA's big power industry climate rule and rolling back mining regulations, in concert with the Trump administration's wider support of fossil fuels.
The bottom line: Their analysis predicts that the pro-coal efforts in isolation would indeed likely boost production of coal used for power generation and mining jobs, compared with what's expected under the baseline of Obama-era rules in the near-term (2020) and medium term (2030).
- However, combined with policies that affect oil-and-gas producers, like making more areas available for drilling and cutting royalties, Trump's overall approach (the "pro-fossil" case in the chart above) is actually forecast to be worse for coal than the Obama policy baseline.
The gritty details: The report shows that the across-the-board support for fossil fuels will cut coal production by 220 million tons in 2020 and 210 million tons in 2030 compared with the Obama baseline, leading to net mining employment losses of 13,000-16,000 jobs.
- Yes, but: Like any effort to predict the future, a few dollops of caution are warranted here, and the presentation notes that the findings are "preliminary results" based on "what if" scenarios.
Wild card: Those potential outcomes do not include the effect of the new Energy Department proposal to bolster revenues for coal and nuclear plants in some markets based on their "resilience and reliability" contribution to the grid.
- Whether and how much the proposal would bolster coal-fired power generation depends on variables including gas prices and how exactly the policy would be structured under the Federal Energy Regulatory Commission, an independent agency.