In the Mix: How Will Trump’s Administration Shape America’s Energy Profile?

In the Mix: How Will Trump’s Administration Shape America’s Energy Profile?

By Lily Ricci, Staff Contributor

Last week, Congress kicked-off the Republicans’ avowed war on environmental oversight by dusting off the Congressional Review Act[1] to axe two Obama-era environmental regulations. First on the chopping block was a rule that would have prevented coal ash from being dumped into rivers and streams adjacent to coal mines.[2] Second was a rule put forward by the Interior Department that restricted the burning of natural gas during drilling operations, a practice commonly known as flaring, on public-owned lands.[3] House and Senate sponsors of the respective rollbacks rationalized their actions by claiming both rules hamper domestic energy production and hurt U.S. jobs.

Energy independence has been a rallying cry for both sides of the aisle ever since President Richard Nixon coined the term in 1973. As with most things these days, how the United States achieves that independence is a subject of great contention. Under President Obama, energy independence was part-and-parcel with the American Recovery and Reinvestment Act of 2009 (ARRA). In one of his first speeches as President, Mr. Obama stated that the ARRA “will begin to end the tyranny of oil in our time.”[4] Energy independence under President Obama meant focusing on renewables, weaning Americans off coal and oil, and exploring unconventional drilling methods, such as fracking, in a tempered, if not optimistic, manner.

The Trump Administration takes a different approach. The White House website touts “An America First Energy Plan,” which promises to lift the regulatory burdens that “for too long” have held America back.[5] The website is explicit about President Trump’s commitment to eliminating the Climate Action Plan (which includes the Clean Power Plan) and the 2015 Waters of the United States Rule (which is pending a Supreme Court decision regarding proper forum).[6] The America First Energy Plan focuses on using nonrenewable sources that reside on U.S. soil by bringing back coal and tapping vast shale reserves, “especially those on federal lands.”[7]

Like a lot of things coming out of the Trump Administration, a dual coal-natural gas platform has many in the industry scratching their heads. Natural gas is the United States’ second largest source of electricity after coal, meaning that coal and natural gas are competitors in the same market.[8] Inevitably, Mr. Trump will have to focus his efforts on one form of fuel over the other.

Coal was an undeniable centerpiece in Mr. Trump’s campaign, but whether Mr. Trump will be able to deliver on ‘bringing back coal’ is a questionable pronouncement. When speaking about Mr. Trump’s pledge to revive the United States coal industry, Robert Murray, “the king of American Coal,”[9] suggested President Trump “temper his expectations”[10] – a sentiment shared by other coal executives.[11]

As suggested by the White House website, gutting the Clean Power Plan is the way to bring coal back from the brink. But coal didn’t die the day the Obama administration rolled out the CPP. The U.S. coal industry has been in decline since long before Mr. Trump was even a passing political thought. A combination of environmental concern, automation and the tapering of heavy coal-burning manufacturing have been a reality for decades.[12]

For one thing, demand for coal has steadily declined. Coal exports peaked in 2012, and 94 coal-fired power plants closed in 2015.[13],[14] Like many American industries, coal is also a victim of mechanization. In 2015, there were 65,971 coal mining jobs compared to 100,000+ in wind energy.[15] In 2016, the number of American jobs in the coal mining industry dropped to just over 50,000, compared to 100,000+ in wind energy sector.[16],[17] Even with the removal of regulatory hurdles, coal is unlikely to make a comeback.

However, the slashing of Obama-era legislation does pave the way for the new administration to capitalize on home-grown energy by pushing natural gas to the forefront. A reduced regulatory burden coupled with an industry-friendly (or a non-existent[18]) EPA would mean an open road for natural gas, particularly in the field of fracking. As a result of expanded production from shale formations and states transitioning from coal to natural gas in anticipation of the CPP, there is significant momentum behind natural gas.[19] The United State Energy Information Administration estimates that natural gas-fired generating capacity is likely to increase over the next two years, possibly overtaking coal as the United States number one source of electricity by 2018.[20]

Regardless of the favored mix, renewable energy is conspicuously absent – a disheartening but unsurprising reality.

[1] The Congressional Review Act, 5 U.S.C. § 801, accelerates the pace at which legislation moves to the floor of the Senate and allows regulations passed within 6 months of the end of the prior presidency to be invalidated with a simple majority vote in both chambers of Congress.

[2] See Matthew Daly & Kevin Freking, GOP Votes to End Rule Stopping Coal Debris From Being Dumped in StreamsTime (Feb. 1, 2017), http://time.com/4657438/congressional-republicans-environmental-regulations-coal-streams/.

[3] See Matthew Daly, House Overturns Obama Administration’s Methane Gas Emission Rule, Time (Feb. 3, 2017), http://time.com/4659832/congress-overturns-methane-gas-emission-rule/.

[4] Macon Phillips, Serious About Energy Independence, The White House.Gov (Feb. 5, 2009), https://obamawhitehouse.archives.gov/blog/2009/02/05/serious-about-energy-independence.

[5] IssuesThe White House.Govhttps://www.whitehouse.gov/america-first-energy (last visited Feb. 6, 2017).

[6] Amy Antoniolli & Daniel J Deeb, Supreme Court to Decide Proper Forum to Review WOTUS Rule Challenges, Nat’l L. Rev. (Jan. 19, 2017), http://www.natlawreview.com/article/supreme-court-to-decide-proper-forum-to-review-wotus-rule-challenges.

[7] Issues, supra note 5.

[8] Our Energy System, Nat’l Acads. Sci., Eng’g & Med., http://needtoknow.nas.edu/energy/interactive/our-energy-system/ (last visited Feb. 6, 2017).

[9] Timothy Puko & John W. Miller, Robert Murray: The Last Man Betting on Coal, Wall St. J. (Mar. 15, 2015), https://www.wsj.com/articles/robert-murray-the-last-man-betting-on-u-s-coal-1426636891.

[10] Ben Poken, Trump Appears to Push Contradictory Gas and Coal Boosting Plans, NBC News (Jan. 27, 2017), http://www.nbcnews.com/business/economy/trump-appears-push-contradictory-gas-coal-boosting-plans-n712646.

[11] See Clifford Kraus & Michael Corkery, A Bleak Outlook for Trump’s Promises to Coal Miners, N.Y. Times (Nov. 19, 2016), https://www.nytimes.com/2016/11/20/business/energy-environment/a-bleak-outlook-for-trumps-promises-to-coal-miners.html (“Any exuberance has to be tempered,” said Richard Reavey, vice president for government and public affairs at Cloud Peak Energy, a major Western coal producer. “The view should be cautious optimism.”)

[12] Id.

[13] Id.

[14] See Devashree Saha & Sifan Liu, Coal Plant Retirements Will Contrinue Despite Trump’s EPA Pick, Brookings (Dec. 19, 2016), https://www.brookings.edu/blog/the-avenue/2016/12/19/coal-plant-retirements-will-continue-despite-trumps-epa-pick/. (Massachusetts plans to retire its largest remaining coal fired plant this year, Maryland is set to retire 22-percent of its current coal capacity by 2020, and Minnesota is planning to retire four coal-fired generators by 2025 (representing 35% of the state’s coal capacity).

[15] Annual Coal Report, Energy Info. Admin., http://www.eia.gov/coal/annual/ (last visited Jan. 6, 2017).

[16] See Kraus and Corkery, supra note 11.

[17] See Bailey Lipschultz, U.S. Oil and Gas Prices May Tumble on Trump’s ‘Energy Revolution’, Bloomberg (Feb. 6, 2017), https://www.bloomberg.com/news/articles/2017-02-06/u-s-oil-gas-prices-seen-falling-with-trump-energy-revolution.

[18] H.R. 861, 115th Cong. (2017).

[19] Today in Energy, Energy Info. Admin. (Jan. 30, 2017), https://www.eia.gov/todayinenergy/detail.php?id=29732.

[20] Id.

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