Black Death of US Energy Industry Could Finish Off Trump

It is very hard to ignore the upcoming U.S. elections. At stake is the choice of the head of the world’s leading economy, the person who influences U.S. media and in turn, the global press, and the commander in chief of a country with an astounding nuclear arsenal. It is still summer, but tensions in the American political arena are already heating up.

Donald Trump has the extreme misfortune of running for reelection in 2020, a year of crisis and instability. The events of the first half of the year are working against him: a heavy loss against COVID-19 (more than 150,000 people have died), an increase in unemployment by 22.6 million since March, and natural gas prices falling to 25-year lows amid the fossil fuel market crisis. Such a scenario makes Trump’s reelection extremely difficult. In this regard, Joe Biden is at a clear advantage, and will certainly exploit the Trump administration’s failure to resolve these crises to increase his own chance of election.

However, there is another extremely important factor that could tilt the electoral scales in one direction or another – a decline in coal production.

Its importance cannot be underestimated. During the 2016 presidential election, Hillary Clinton and her campaign relied on Hollywood celebrities, artists and media stars for all-around support. They portrayed Trump as the source of all imaginable sins, from racism to close friendship with Russian intelligence. The Republicans were smarter and won.

Trump relied on the middle class and the coal labor unions as one of the pillars of his campaign. While there is currently a global trend toward using renewable energy given the fact that fossil fuels are considered to be one mankind’s main problems, it has not gone unnoticed that 25 states in the U.S. mine coal – exactly half the number of states in the U.S.

If one superimposed a map of coal deposits onto an electoral map, one would see that coal mining regions coincide perfectly with states that support Trump. American miners opened the door to the Oval Office for Trump, and the candidate vowed to restore coal production and create jobs, putting an end to the industry’s decline. The chant “Trump digs coal!” resounded at almost every meeting among voters who believed in a better future.

The main threat to the coal industry and, coincidentally, to Trump’s presidential ambitions, was planted by Barack Obama, his predecessor. Obama believed in the promises of solar energy manufacturers and renewable energy. In February 2016, he signed the American Recovery and Reinvestment Act, which allocated $90 billion to stimulate carbon-free energy, and another $150 billion in private and state-supported green projects.

Under Obama, the national coal sector began to rapidly deteriorate and shrink. In 2011, the U.S. produced 1.1 billion tons of coal; in 2015 the volume fell to 896 million tons. The country finished the 2016 election year having mined 739 million tons of coal.

To his credit, Trump tried to fulfill his campaign promises. In 2017, coal mines produced 775 million tons of coal, while coal exports doubled from 51 tons to 97 million tons. During this period, the first supplies of Pennsylvanian coal were shipped to Ukraine.

Following that, the process stalled, and production began to decline again. In 2018, 755 million tons were mined; in 2019, 705 million tons. As such, in just one year, production fell by 7%. This was the worst indicator since 1978 under then-President Jimmy Carter’s administration, when Leonid Brezhnev was in power in the Soviet Union.

However, the most important outcome not shown by these figures is the impact the deterioration of the industry has had on the American people.

Over the past five years, coal mining has completely ceased in Kansas and Arkansas, while production in Wyoming, West Virginia and Pennsylvania (the three major coal states with a combined output of more than 60%) was cut by an average of 20%. In Arizona, the Navajo Generating Station was closed. The Kayenta mine was also shut, leaving more than 300 miners without work. The budget of the Hopi Reservation, where these facilities were located, at once shrank by $12 million, or 80%.

However, the Energy Information Administration of the U.S. Department of Energy is convinced that next year production will at least return to last year’s levels. The forecast presumes that natural gas prices will rise so strongly in 2021 that the use of coal for energy production will again become economically viable. It is completely unclear on what data the EIA specialists are basing base their analysis. However, such boastful expectations make it seem like the Republicans are using government institutions to reassure their target voters on the eve of the election.

Clearly the 2020 results on all production fronts will be even worse. COVID-19 has mercilessly destroyed not only the plans of oil and gas producers, but has hurt the budgets of all countries without exception. Larger economies which are more dependent on fossil fuels will suffer greater damage.

Today, the U.S. has accumulated a record 560 million tons of oil and lacks potential buyers. The number of working shale gas wells has decreased three times, the worst indicator since 1975.

Such a predicament does not make reelection any easier for Trump, because the strategy he used in his previous campaign is no longer relevant. The country needs coal and jobs, while Trump can only offer his Twitter posts and an endless mantra about American greatness.