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Trump’s Plan Won’t Reverse Coal’s Decline

President Trump on Tuesday signed an executive order rolling back steps taken by his predecessor, Barack Obama, to reduce carbon emissions and fight climate change. In particular, Trump ordered the Environmental Protection Agency to begin the process of repealing the Clean Power Plan, an Obama-era regulation that would impose strict new limits on emissions from coal-fired power plants. “My administration is putting an end to the war on coal,” Trump said ahead of the formal signing ceremony.

Trump touted the move as a way to boost economic growth, improve energy security and bring back thousands of jobs in coal country, where voters backed Trump by overwhelming margins in November. Environmental groups countered that the order would do little for the economy while doing potentially irreversible damage to efforts to combat climate change.

In the short term, the new order probably has little practical effect, good or bad. That’s because the Supreme Court temporarily blocked implementation of the Clean Power Plan last year. (Its main provisions weren’t meant to take effect until 2022 in any case.) But assuming that some version of the rule would ultimately have taken effect, Trump’s move could have significant long-term consequences for both the energy industry and the environment. (Trump’s rollback will almost certainly face its own legal challenges.)

Those consequences, however, are more complicated than both Trump’s supporters and opponents often portray them. Here’s what we know about how Trump’s order will affect the coal industry and its workers — with the important caveat that, like almost everything in energy, these projections are subject to substantial uncertainty.

Repealing the rule won’t reverse the coal industry’s decline

Trump — along with many of his supporters in coal-producing states — blames Obama’s environmental policies for the coal industry’s struggles. And it’s true that U.S. coal consumption dropped precipitously during Obama’s time in office. But the timing is largely coincidental: Coal’s biggest problem isn’t regulation — it’s natural gas.

For decades, coal was the dominant source of electrical power in the U.S. But starting in the mid-1990s, the twin technologies of hydraulic fracturing (“fracking”) and horizontal drilling led to a surge in natural-gas production, which in turn pushed down prices. That, along with other factors — gas-fired power plants are cheaper to build and operate than coal-fired ones, for example — led power companies to burn more gas and less coal. The shift has been remarkably fast, at least by energy industry standards: In 2003, according to the U.S. Energy Information Administration, coal accounted for half of all U.S. power generation. In 2015, it accounted for just a third, with nearly the entire difference made up by gas. In 2016, natural gas surpassed coal as a source of U.S. electrical power, a shift the EIA concluded was “mainly a market-driven response to lower natural gas prices.”

That trend probably isn’t going to reverse anytime soon. In fact, if Trump follows through on plans to ease restrictions on fracking on federal lands, gas production could increase even more, making coal even less competitive. Meanwhile, wind and solar power have gotten dramatically more efficient in recent years and are threatening to further erode coal’s market share.

Repealing the rule might slow coal’s decline

Just because the rise of natural gas is the primary cause of coal’s decline, however, doesn’t mean it is the only cause. The EIA last year found that environmental regulations “have played a secondary role” in coal’s falling market share. And coal’s regulatory woes were only going to get worse: The Clean Power Plan likely would have forced electrical utilities to make costly upgrades to reduce emissions from coal plants. That probably would have led companies to shutter some coal plants that might otherwise have stayed open.

Those closures could have a significant impact on the industry. According to EIA projections, both coal production and coal-fired power generation will drop sharply starting in 2020 if the Clean Power Plan takes effect. If it doesn’t, both production and generation are forecast to stay relatively flat.

But repealing the rule might not help coal miners

Repealing the Clean Power Plan might help the coal industry, but that doesn’t necessarily mean it will do much good for the coal miners Trump says he wants to help. That’s because coal miners face another challenge familiar in other industries: automation. Employment in the mining industry has been falling for decades, a decline that long predates the recent drop in coal production.

The problem for workers is that there is no easy way out of this bind. If automation continues, many of them will lose their jobs even if the industry rebounds. But if automation slows, that will make coal production more expensive, making it less competitive with natural gas.

Trump isn’t doing much to help workers overall

At Tuesday’s ceremony, Trump was surrounded by smiling coal miners. But other Trump policies could hurt miners and their communities.

The preliminary budget that Trump released this month, for example, would eliminate funding for the Appalachian Regional Commission, a half-century-old partnership meant to promote economic growth in West Virginia, Kentucky and other Appalachian states. The budget would also eliminate the Economic Development Administration, including its program that focused on helping coal country. And it would make steep cuts in funding for job-training programs, some of which serve workers in declining industries such as coal.

Such programs have, at best, a mixed record of success — the Appalachian Regional Commission has plainly not reversed the region’s economic decline. During the campaign, Hillary Clinton proposed a $30 billion plan to revitalize coal country; many experts were skeptical of that plan, too. But the coal industry’s decline isn’t likely to reverse anytime soon — and Trump, so far, hasn’t proposed any policies to help the workers whose jobs have disappeared.

Ben Casselman is a senior editor and the chief economics writer for FiveThirtyEight.

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