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Biden Can’t Save U.S. Coal, But He Can Help The Miners

Tuesday, August 4th, 2020

Margaret Thatcher hated the UK’s coal miners and especially their union. A series of brutal strikes divided the nation during her regime. But when the time came to deal with an overly expensive coal industry, she did not just lower the boom and walk away. She forced government owned electric companies to sign multiyear contracts to purchase coal. That gave coal mines an opportunity to improve productivity before contracts ended, and perhaps become competitive enough to save their businesses. And while they did become more efficient, natural gas suppliers became even more efficient than before, so coal could still not compete against gas. And so, despite their former clout, the UK’s coal mines closed and a once vital industry became all but extinct. Now Poland faces a similar problem. Regions of the country depend heavily on well paying, unionized coal jobs. A large, new coal-fired power plant could not get financing as banks and other lenders have reduced commitments to environmentally dubious projects. The government, eager at least to placate miners, announced plans to build a coal storage facility. Keep mining coal that isn’t immediately needed and put it in storage. This is the sort of strategy we might have expected the former communist regime to employ in order to meet arbitrary production targets. But ultimately the problem for Poland’s politicians isn’t about coal, the environment or electricity production. The problem is simple. Some regions of the country would collapse economically without coal mining and the associated power generation industry jobs.

That brings us to U.S. coal usage in electricity production, its principal use apart from steel production, which continues to decline. Vigorous support from the Trump administration has failed to offset coal’s deteriorating economics versus natural gas and renewables.

https://oilprice.com/Energy/Energy-General/Biden-Cant-Save-US-Coal-But-He-Can-Help-The-Miners.html
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