*Deep breath, pre-thread*
As we close the book on four years of President Donald Trump, I think it is safe to say that the administration not only failed its campaign promise to “put the miners back to work” and “get those mines open.” The industry is in worse shape than ever.
As we close the book on four years of President Donald Trump, I think it is safe to say that the administration not only failed its campaign promise to “put the miners back to work” and “get those mines open.” The industry is in worse shape than ever.
While COVID-19 is responsible for a lot of the recent drop and some of that will come back, the decline continued pre-pandemic. This wasn’t as obvious due to bump in export demand (that started before Trump) masking impact of steady coal plant retirements for a few months.
Some of the administration's own actions, particularly Trump’s actions on trade, can be tied to some of the harm to the U.S. coal sector. https://www.spglobal.com/marketintelligence/en/news-insights/trending/52IAZGDbLDYftEAoi-EJ4w2 Murray Energy, whose CEO was a big backer of Trump, cited the trade war as one of factors leading to its bankruptcy.
And, one of the sector’s biggest hail mary passes in the past few months was an attempted joint venture of giants Arch Resources and Peabody Energy. A Trump appointed judge upheld a decision of the FTC that killed the merger: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/rejection-of-peabody-arch-jv-raises-questions-about-powder-river-basin-s-future-60569767
The market is tough to overcome. But a big reason coal didn’t come back can be tied to hamfisted attempts to support coal. Few policies ever looked promising and nearly all either failed or had a minimal impact.i.e.: https://www.spglobal.com/marketintelligence/en/news-insights/trending/E9LxD_sxnDrQLakOAi3aUA2 or https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/coal-sector-disappointed-as-court-ruling-may-pave-way-for-biden-climate-rules-62180282
One of the problems was so many of Trump’s efforts made such little difference. You can lift moratoriums and regulations, but you apparently can’t force people to make a multi-decade bet on a fuel that seems to be on its way out the door.
Now, to be fair, many coal companies knew the industry wasn’t coming back. https://www.spglobal.com/marketintelligence/en/news-insights/trending/GW0flA5pdXpGv6dabIRQ6A2
Bob Murray, about Trump before 2016 election: "[Trump] wants to bring the mines back and I told him that was not possible. ... I don't think it will be a thriving industry ever again." (Apparently a lot of people didn’t want to hear this, so they didn’t.) https://www.spglobal.com/marketintelligence/en/news-insights/trending/MOqXtgORpU4PpeCX4QU2Fw2
While you still heard the occasional rumble from coal country citizens/lawmakers about Trump’s love of coal, executives of the companies were largely done trying to pretend the industry’s fortunes would improve under more Trump by late 2020: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-coal-executives-not-expecting-reversal-in-prospects-to-come-from-white-house-61140452
Over past few years, I think coal execs woke up to idea power co's were business partners, not friends. I regularly contacted utilities in wake of Trump roll outs/news. Consensus: retirements continue, no new coal plants. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/coal-sees-diminished-role-in-us-presidential-race-with-odds-slim-for-new-plants-61025223
And https://www.spglobal.com/marketintelligence/en/news-insights/trending/jBk1CImsuwbyL7lN4VifJw2
And https://www.spglobal.com/marketintelligence/en/news-insights/trending/jBk1CImsuwbyL7lN4VifJw2
Notably, one area Trump administration could have helped coal miners was an emergency temporary standard for COVID protections. With Biden taking office, miners are hopeful again they might get the protection they asked for months ago: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-miners-may-get-new-covid-19-protections-in-early-days-of-biden-administration-62136819
Lastly, just a few random, notable milestones that occurred under the “Trump Digs Coal” era:
A company that touted to be the first thermal coal mine to open under Trump went bankrupt. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/paringa-s-ky-coal-unit-moves-toward-liquidation-after-sale-attempts-flop-60550976
A company that touted to be the first thermal coal mine to open under Trump went bankrupt. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/paringa-s-ky-coal-unit-moves-toward-liquidation-after-sale-attempts-flop-60550976
Trump’s biggest supporter went bankrupt. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/murray-energy-executives-saw-ailing-coal-company-as-own-piggy-bank-8211-creditors-58440831
One of the more messy and impactful bankruptcies for workers (Blackjewel) started under the administration. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/a-smoking-hole-in-the-ground-blackjewel-s-coal-bankruptcy-plan-raises-concern-62123047
The nation’s largest coal miner said they would likely avoid greenfield projects in the US going forward: https://www.spglobal.com/marketintelligence/en/news-insights/trending/UJxk-uezPq0suwdw9B0rfw2
Anyway. Back to digging up coal news. Despite some hope for a brief demand rebound, looks like things are about to get much rougher for coal. Between Biden, markets, expiring tax credits, aging plants, ESG focus, etc. the sector has been and is in a highly unenviable position.