Tuesday, February 20, 2018

Can coal come back?

By Ken Hedler
April 1, 2017 at 11 p.m.

Workers use a loader to excavate lignite coal in the mine.

President Donald Trump said he was helping the coal industry with an executive order last week instructing regulators to rewrite key rules reducing U.S. carbon emissions and other environmental regulations from the Obama administration.

But Henderson City Councilman Steve Higginbotham, who was laid off last July from his job in the real estate department of Luminant's Oak Hill Mine near Tatum, said he doesn't think the president's order will bring back East Texas coal industry jobs in the near future.

"Even with Trump being pro-coal and helping the coal industry by loosening some of the EPA requirements, I feel like the coal industry will not come back because of the low natural gas prices," Higginbotham said last week.

It's a sentiment echoed by coal industry executives, who cheered looser regulations but are expecting little impact on their market share — and the jobs they provide. Regulatory relief could restore 10 percent of their companies' lost market share at most, they say — nowhere near enough to return coal to its dominant position in power markets and put tens of thousands of coal miners to work.

"At the end of the day, coal will still have to compete with a host of other fuels," said Rick Curtsinger, a spokesman for Cloud Peak Energy, one of the country's leading coal producers. "Utilities' long-term decisions are based on economics and the need for long-term certainty."

East Texas job cuts

East Texas has seen a steady string of layoff announcements from the operations that mine area coal and those that burn it to generate electricity. Most recently, Luminant, Texas' largest power producer, laid off 132 workers as it shuttered its Oak Hill lignite mine by the end of 2016.

But Higginbotham, who voted for Trump in November, said it was lower prices for natural gas, which also burns cleaner than coal, prompted Luminant to declare bankruptcy a few years ago, not regulations.

He said his layoff brought to an end employment that began 35 years earlier at the Dallas office of a predecessor company to Luminant, Texas Utilities. Though nearing retirement age, Higginbotham said he was planning at the time of his layoff to work an additional year and a half before ending his career.

Whether Trump's order brings back coal jobs several years from now remains to be seen, he said, adding he voted for Trump for several reasons, "not just because he was pro-coal."

He also acknowledged a future president could overturn Trump's order, just as Trump has been reversing President Barack Obama's decisions.

Trump's order drew praise from the Texas Mining and Reclamation Association for withdrawing the Clean Power Plan, which had been under a stay issued by the U.S. Supreme Court in February 2016.

"The president recognizes the deleterious consequences of the Clean Power Plan, which, if implemented, would have a detrimental effect on grid reliability, contribute to senseless job losses and result in increased power rates for hardworking Americans," the association said in a statement.

Electric generation

Luminant declined last week to comment on Trump's order or say what it might mean for earlier jobs cut or remaining jobs in Texas.

"We do not have a statement or comment as we do not yet know what impacts the executive order could have on our business," said Meranda Cohn, a spokeswoman for the company.

A subsidiary of Vistra Energy, Luminant announced waves of layoffs from its coal-fired power plants and mines over the past year. After the round of layoffs announced in October that included Higginbotham, the company told the Texas Workforce Commission in November it also had laid off 43 workers from its Martin Lake plant near Tatum.

Earlier in 2016, Luminant closed three small mines in North Texas — its Winfield, Monticello and Thermo mines — to make a switch from lignite to cleaner-burning coal from the Powder River Basin in Wyoming and Montana.

Like Luminant, AEP Southwestern Electric Power Co. relies on coal to generate power in East Texas.

SWEPCO spokesman Scott McCloud said in an email Trump's order would not change the company's plans to retrofit four coal-fired plants to comply with EPA mandates, nor would it affect SWEPCO's request for a rate increase.

The plants being retrofitted are Welch Plant units 1 and 3 in Pittsburg, Pirkey Plant in Hallsville, Dolet Hills Plant in Mansfield, Louisiana, and Flint Creek Plant in Gentry, Arkansas.

"Our previous coal plant requirements were related to compliance with the MATS (Mercury and Air Toxics Standards) rule and other EPA rules," McCloud said.

SWEPCO applied Dec. 16 to the Public Utility Commission of Texas for a 12.7 percent rate increase, which would increase the company's rates in Texas by about $69 million annually. The proposed environmental controls, at $34.4 million, accounted for the largest share of the costs it hopes to recover.

"AEP and SWEPCO are in the midst of an important transition to support a cleaner energy economy," McCloud said in a separate email. He said SWEPCO cut carbon dioxide emissions by 44 percent from 2000 to 2016.

Brian Murray, director of environmental economics at Duke University's Nicholas Institute, put it this way: Utilities "are not going to flip on a dime and say now it's time to start building a whole bunch of coal plants because there's a Trump administration."

But in East Texas' coal country, Trump's action to loosen regulations drew praise last week.

"Generally speaking for me, I would have a positive view on that," said Phil Cory, the mayor of Tatum. "I think all of us are concerned about clean air and clean water. At the same time, you can ruin our economy."

Cory, a retired minister and funeral director who has been mayor for 12 years, said he voted "in a reluctant way" for Trump and he is willing to "give the man a chance and wait and see what happens."

Sue Henderson, general manager of the Henderson Economic Development Corp., said she would love it if Trump's action helped bring back the area's coal industry.

However, she said, "From what I have been told, it does not sound very promising."



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