Blog Posts > New Energy Regulations Won’t Bring Back WV Coal

New Energy Regulations Won’t Bring Back WV Coal

Written by Sean O'Leary on August 22, 2018

The Trump administration unveiled its replacement of the Obama Administration’s Clean Power Plan (CPP), the Affordable Clean Energy (ACE) rule. The goal of the CPP was to help curtail the harmful pollution caused by emissions from generation of electricity, particularly from coal-fired power plants, which is causing severe environmental and health problems throughout the world. While some view the adoption of the ACE rule as as a “victory for coal miners,” analysis of the rule from Trump’s Environmental Protection Agency shows the plan will do little to reverse the long-term decline of the coal industry in West Virginia.

Though a popular scapegoat among regional politicians and the coal industry, the Clean Power Plan was among the least of the coal industry’s problems in West Virginia. Thinning seams leading to lower productivitycompetition from more productive western coal basins and the rise of natural gas all played a major role in the coal industry’s decline in West Virginia.

With that in mind, it should be unsurprising that replacing the CPP with more industry-friendly regulations would have only a modest impact on the coal industry, particularly in West Virginia — and that is what the Trump administration’s analysis of the rule shows.

Appalachian coal production for electricity generation was projected to be about 70 million tons annually by 2025 under the CPP, and 58 million tons by 2030. According to the EPA’s analysis, the new ACE rule would increase that figure to 75 million tons in 2025, and only 61 million tons in 2030. By 2035, coal production in Appalachia would actually be slighter lower under the ACE rule compared to the CPP.

Modest Gains in Coal Production Under Trump ACE Proposal

Appalachian Coal Production Under Clean Power Plan and Affordable Clean Energy rule (million short tons, electirc power cost)

Source: EPA Regulatory Impact Analysis

Assuming West Virginia’s share of Appalachian coal production remains stable during this time period, the projections could mean that West Virginia would only see an increase in coal production of about 2 million tons in 2025, and roughly 1 million tons in 2030. To put that in context, West Virginia produced nearly 86 million tons of coal in 2017, and total coal production in the state has declined by 67 million tons since its most recent peak in 2007 (See Chart Below).

Trump ACE Proposal Does Little to Reverse WV Coal Decline

Estimated WV Coal Production Under Clean Power Plan and Affordable Clean Energy rule (million short tons)

These projections differ from WVU’s coal production projections for a few reasons. One the projections in the above chart compare coal production under the CPP plan and the ACE rule. The CPP was not incorporated into the WVU projections, resulting in slightly higher coal production figures in the WVU report. Also, due to the limitations of the EPA analysis of the ACE rule, separate projections were not able to be made for northern and southern West Virginia, which typically are impacted differently by regulations. This too also likely resulted in slightly lower projections than those in the WVU report.

Despite promises from Governor Justice that the ACE rule “will bring back energy jobs like you can’t imagine,” the estimated small growth in production is unlikely to translate into a major increase in coal mining jobs in West Virginia. West Virginia coal miners average 3.19 tons of coal produced per mining hour, or 6,635 tons per year if working full-time. Assuming coal-miner productivity remains stable, the estimated increase in coal production in West Virginia would lead to only an increase of about 300 coal mining jobs by 2025 and less than 200 jobs by 2030. And again, to put those gains in context, West Virginia had 13,000 coal mining jobs in 2017, and has lost roughly 10,000 coal mining jobs since 2011. And any increases in productivity or technology would result in even fewer jobs.

Small Increase in Coal Jobs Under Trump ACE Proposal

Estimated WV Coal Employment Under Clean Power Plan and Affordable Clean Energy rule

Source: WVBCP analysis of BLS and EIA data and EPA Regulatory Impact Analysis

Unfortunately, the reaction from some elected officials did not seem to match the stark reality of the future of the coal industryin the state. The repeal of Obama’s CPP and the implementation of Trump’s ACE rule may be a symbolic victory for coal, but it won’t bring many coal jobs back, as the Trump administration’s own numbers show.

Instead of waiting on coal to come back, West Virginia would be better served if its policymakers and elected officials focused on ways grow the state’s economy so it benefits everyone. This means putting more money, power and skills in the hands of working families, rather than relying on the false hope of returning to the glory days of a declining industry.

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