Does Trump Really Dig Coal?
President Trump loves coal.
Or at least that's what he wants you to believe.
The President's support of coal has been unwavering. From the campaign trail to present day, Trump has been an extremely vocal supporter of coal.
|“I am thinking about the miners all over this country. We’re going to put the miners back to work. We are going to get those mines open. Oh, coal country. What they have done.”
— Donald Trump, May 2016
And Mr. Trump isn't all talk. The President has also taken action to support the industry. Two weeks ago, the Department of Energy announced another $100 million investment in its Coal FIRST initiative, which aims to support the development of cleaner coal technologies.
But for all of Trump's support of coal, it's very likely much of it is exaggerated.
And as energy investors, we should take that into consideration.
I think everyone would agree the man enjoys the use of hyperbole. I mean, show me one person (of sound mind) who'd say Mr. Trump doesn't exaggerate. It's just one of his schticks.
So I don't think it's out of the question to suggest the President is also exaggerating his love for coal and hopes for the industry.
Trump's coal rhetoric is always focused on saving or revitalizing the once-great coal jobs in small-town America. He's always going on about the hardships of coal country and how the liberals want to destroy their way of life. I'm sure you've heard it. But here's the truth...
The energy industry's movement away from coal isn't a recently politically motivated push, as Trump would have you believe. Fact is, the industry has been moving away from coal for a long time.
Coal mining employment in the United States peaked in 1923!
There was a resurgence in the 1970s with the fuel crisis. But even since that time, the coal industry has lost more than 40% of its workforce.
And, again, it's not because a bunch of hippies are worried about owls.
The demand for coal has decline largely due to cleaner and more affordable options, specifically natural gas.
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So the industry's movement away from coal would continue regardless of who's President.
And I think Trump knows that. Mr. Trump is not an idiot. He has got to recognize that sooner or later the world is going to stop using coal just as it did whale oil.
Moreover, Mr. Trump has to recognize that other jobs have been created as coal mining jobs are replaced.
So what is it all about?
Well, crowd pandering — what do you think?
It is most likely Trump is just using the struggling coal industry to strengthen his political career. It's an underdog he can root for.
And when the underdog inevitably loses, Trump can always give people the old “at least we fought the good fight” message.
Every once in a while, there will be news of a coal mine opening back up, employing maybe a few hundred workers. But do you want to know what's really happening to coal jobs under Trump's administration?
According to the Energy Information Administration, more coal-fired power plants were shut down during the first two terms of Trump's administration than the entirety of Obama's first term.
The era of coal is slowly coming to an end. Granted, the industry will continue to innovate to make coal cleaner and more efficient. But sooner or later, King Coal will eventually die off as alternatives innovate in tandem.
Donald Trump is temporary. The energy industry's move toward cleaner and more cost-efficient technologies is really what's unwavering.
Until next time,
As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bubble and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.
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