Will President Trump’s Executive Order on Energy Independence Make a Difference for the Coal Industry?

Will President Trump’s Executive Order on Energy Independence Make a Difference for the Coal Industry?

By Jefferson Lai, Staff Contributor

In January 2016, then-Secretary of the Interior Sally Jewell signed Order 3338, putting a general “pause” on new federal coal leases.[1]  The Order also required the Bureau of Land Management (BLM) to conduct studies on federal coal program reforms and prepare a discretionary Programmatic Environmental Impact Statement[2] because regulations and procedures governing the federal coal program are decades-old and no longer reflective of today’s economic, environmental, and public health realities.[3]

On March 28, 2017, President Trump signed an Executive Order on Promoting Energy Independence and Economic Growth which, among other things, directed the Secretary of the Interior to “take all steps necessary and appropriate to amend or withdraw Secretary’s Order 3338[,] to lift any and all moratoria on Federal land coal leasing activities related to Order 3338[, and to] commence Federal coal leasing activities consistent with all applicable laws and regulations.”[4]

The following day, Secretary of the Interior Ryan Zinke lifted the 2016 moratorium on coal leases on federal lands.[5] However, when asked about the effect of the move on incoming coal lease applications, Secretary Zinke did not sound optimistic, attributing the lack of demand in the past few years to changing market conditions and an uncertain regulatory environment.[6]

Furthermore, according to Robert Murray, founder and chief executive of Murray Energy, the largest privately held coalmining company in the U.S., advancement in technology and competition from natural gas and renewables, rather than government regulation, is the culprit.[7] Asked what President Trump’s order will do for coalmining jobs, he simply said the President “can’t bring them back.”[8] Similarly, representatives of the New England region’s fossil fuel industry also recognize the unlikelihood of a coal resurgence because of affordable natural gas and increasingly competitive prices for hydroelectric, wind, and solar power.[9]

The numbers appear to support their doubts. Solar energy is on the rise with over half a million solar panels installed per day in 2015, a price decrease of 25 percent in 2016, and 97% growth from 2015 to 2016.[10] In the last year, renewable energy accounted for over 60% of total electricity generated in the U.S.[11] By contrast, coal-generated electricity has plummeted from 48.5% in 2007 to 30% in 2016.[12] In addition, data from Mine Safety and Health Administration showed that the number of working coalminers has declined by almost 30,000 from roughly 127,000 in 2008 to 98,000 in 2015.[13]

Moreover, executives believe that having more favorable regulations will not lead to coal companies regaining more than ten percent of lost market share at best, “nowhere near enough to return coal to its dominant position in power markets and put tens of thousands of coal miners to work.”[14] Nicholas K. Akins, chief executive of American Electric Power, said, “Our plans remain the same. . . . This industry is moving in a direction that really moves toward a clean energy economy. That’s what our customers expect, that’s what our shareholders expect.”[15] Also, Royal Dutch Shell Chairman Chad Holliday did not see President Trump’s order having much effect on improving demand for coal because “[t]he marketplace looks at the long-term consequences . . . [and] companies look at fundamental economics.”[16]

While President Trump’s Order has encountered widespread disapproval, not all share that sentiment. Rep. Jerry Paxton and Sen. Larry Hicks of Wyoming have guarded optimism that the President’s Order is the first step in the process of providing much needed billions of dollars in investment to build and fund new schools in the state. In an interview, Sen. Hicks said, “The important thing for Wyoming is, that is how we funded $1.5 billion in schools, with those coal lease bonuses. Going forward, after this last session, there is zero money in the account to build new schools.”[17]

Lastly, the President’s Order is likely to encounter legal challenges from various environmental groups and state governments. Environmental groups firmly believe that the EPA has the legal authority and responsibility to regulate carbon dioxide emissions, pointing to the U.S. Supreme Court thrice concluding “that carbon dioxide is a pollutant and qualifies as a ‘threat’ to human health.”[18] Tomas Carbonnel, lead counsel for the Environmental Defense Fund, also weighed in on the issue and said, “Once the administration undertakes this process, it will experience significant challenges in the courts and in public opinion if it attempts to roll back progress in that, that had been made.”[19] Furthermore, New York Attorney General Eric Schneiderman vowed to “lead a coalition of attorneys general from 16 states and the District of Columbia, as well as the chief legal officers of liberal cities including New York, Philadelphia, Chicago and Boulder, Colo., to challenge Trump’s executive order in court.”[20]

[1] Denise A. Dragoo, Moratorium on Federal Coal Leasing Issued by Secretary Jewell, S&W (Feb. 23, 2016), http://www.swlaw.com/blog/environmental-and-natural-resources/2016/02/23/moratorium-on-federal-coal-leasing-issued-by-secretary-jewell/.

[2] Id.

[3] Secretarial Order No. 3338 (Jan. 16, 2016), available at

https://www.blm.gov/style/medialib/blm/wo/Communications_Directorate/public_affairs/news_release_attachments.Par.4909.File.dat/FINAL%20SO%203338%20Coal.pdf.

[4] Exec. Order No. 13,783, 82 Fed. Reg. 16,093 (Mar. 28, 2017), available at https://www.whitehouse.gov/the-press-office/2017/03/28/presidential-executive-order-promoting-energy-independence-and-economi-1.

[5] Iain Woessner, Interior Secretary Lifts Federal Coal Moratorium, Rawlins Daily Times (Mar. 30, 2017), http://www.rawlinstimes.com/news/interior-secretary-lifts-federal-coal-moratorium/article_fafff0d4-14b0-11e7-9736-c77822c45809.html.

[6] Id.

[7] Dominic Rushe, Top US Coal Boss Robert Murray: Trump ‘Can’t Bring Mining Jobs Back’, The Guardian (Mar. 27, 2017), https://www.theguardian.com/environment/2017/mar/27/us-coal-industry-clean-power-plan-donald-trump?CMP=share_btn_tw.

[8] Id.

[9] See David Abel, Trump Order Softens Laws on Climate Change, Boston Globe (Mar. 29, 2017), https://www.bostonglobe.com/metro/2017/03/28/trump-executive-order-overturning-climate-policies-draws-criticism/mG9hVh7jCbpDFQbGRypTgP/story.html.

[10] See Espen Stoknes and Tom Bowman, Trump’s Pro-Coal Orders Are Doomed to Fail, Time (Mar. 29, 2017), http://time.com/4709796/trump-epa-climate-fossil-fuels/; Solar Industry Data: Solar Industry Growing at a Record Pace, SEIA (last visited April 2, 2017), http://www.seia.org/research-resources/solar-industry-data.

[11] See Stoknes and Bowman, supra note 10.

[12] Daniel Gross, A Cruel, False Promise on Coal, Slate (Mar. 28, 2017), http://www.slate.com/articles/business/the_juice/2017/03/trump_s_executive_order_won_t_bring_back_coal_jobs_regulations_aren_t_what.html.

[13] Rushe, supra note 6.

[14] Clifford Krauss and Diane Cardwell, Policy Shift Helps Coal, but Other Forces May Limit Effect, The New York Times (Mar. 28, 2017) https://www.nytimes.com/2017/03/28/business/energy-environment/trump-coal-executive-order-impact.html?_r=0.

[15] Id.

[16] Tom DiChristopher, Trump’s Climate Change Executive Order Won’t Change Coal’s Fortunes, Shell Chair Says, CNBC (Mar. 30, 2017), http://www.cnbc.com/2017/03/30/trump-climate-change-action-wont-change-coals-fortunes-shell-chair.html.

[17] Woessner, supra note 4.

[18] Kevin Enochs, Main Points in Trump Climate Policy Executive Order, VOA (Mar. 28, 2017), http://www.voanews.com/a/trump-rolls-back-us-climate-policy-latest-executive-order/3785596.html.

[19] Id.

[20] Samuel Chamberlain, Dem AGs Vow to Fight for Obama Global Warming Plan After Trump Energy Order, FOX (Mar. 28, 2017), http://www.foxnews.com/politics/2017/03/28/dem-ags-vow-to-fight-for-obama-global-warming-plan-after-trump-energy-order.html.

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