Gone, Baby, Gone: The Death of Appalachian Coal
It’s not just cheap natural gas. Even a coal industry revival wouldn’t help Appalachia.
Trump has promised to end the “war on coal” and bring the industry roaring back. The NY Times appropriately called this a “cruel promise,” because cheap natural gas has driven coal to its knees economically. That won’t change under Trump, who has promised even more fracking and gas production. But, as it turns out, even a revival for the coal industry wouldn’t help Appalachian coal miners and their communities. It’s not only cruel to give them false hopes. It also distracts from the need to help them adapt to their economic situation.
A new issue brief by Alan Krupnick at Resouces for the Future (RFF) lays out the stark economics of the situation:
“Western coal is far cheaper because it is strip-mined (rather than deep-mined), driving the underlying labor productivity differences (29.3 short tons per worker-hour in Wyoming’s Powder River Basin versus 1.6 short-tons per tons per worker-hour in southern Appalachia.). And western coal is more desirable to utilities because it has a much lower sulfur content (if somewhat lower energy content) than eastern coal, so helps meet standards for sulfur dioxide emissions under the Clean Air Act.”
The cost disadvantage of Eastern coal is so great that even doubling the federal royalty on Western coal would hardly help. That would lead to a 15% increase in coal production in Northern Appalachia and a 7% increase in Central Appalachia. And of course, Trump has no intention of increasing royalties for mining on federal lands — if anything, he’s going to open more federal lands for mining and further cut into the market for eastern coal. The basic fact is that the most accessible, cheapest coal in Appalachia is gone, and the cost curve is rising.
What about coal exports? Could a booming export market revive Eastern coal? The answer is no. Here, too,Eastern coal is at a disadvantage. The potential export markets are in Asia. So Western coal will have a transportation advantage in export to those markets, even assuming that Trump is successful in boosting U.S. coal exports. And a big surge in exports seems less feasible than it did a few years ago anyway, since China is working to deal with its horrendous air pollution problems.
It’s impossible not to sympathize with the plight of the people who used to depend on mining for their livelihoods. As the mayor of one Kentucky mining town said:
“‘Coal was our golden egg and it just no longer exists and people are struggling to make ends meet,'” said James Craft, Whitesburg’s mayor for the past 10 years.
“The impact has been absolutely devastating, with no discernible method of income for most of the people,’ Craft told FoxNews.com. We desperately need some infusion from the federal government.”
Currently, that town’s best hope is planned construction of a new maximum security federal prison. But that’s not something that can be duplicated on a massive scale. In areas that have unemployment rates twice or three times the national average, something more needs to happen. But that “something more” isn’t going to be the return of mining jobs. If he wants to help those people, Trump needs to come up with something new.
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Dan Farber has written and taught on environmental and constitutional law as well as about contracts, jurisprudence and legislation. Currently at Berkeley Law, he has al…
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As noted elsewhere, the efficiency of combined cycle natural gas plants (gas turbine top end, with a steam plant running as a bottoming cycle on the turbine exhaust) is much higher than a straight steam (Rankine cycle) plant running coal; the fleet average for coal plants is 10,428 Btu / kW-h (33% – a kW-h is 3,409 Btu) vice 7,907 (43%) for natural gas. Newer advanced turbines allow efficiencies exceeding 60% (5,681 Btu/kW-h) fire to wire.
Natural gas is also easier to handle in a lot of ways; a fluid vs. rocks – a pipeline can’t move rock, etc.
So even if natural gas was the same price per Btu (it’s usually cheaper) you can get almost twice as much electricity out of the same amount of energy and the other advantages make it even better.
Coal isn’t coming back.
As to jobs, it is worth noting that customizable automation can create good paying jobs that are preferably located near their markets, and this could partly revive employment in some of these areas. Such products would be any highly customized consumer product, such as “bespoke” suits, semi-custom furniture and so on (this is an old story in small ship construction, my area of expertise). This might also take advantage of some of the high income of the top 1% by having them buy high labor content luxury goods.
Basically, people in Appalachia need to move to where there are jobs.