Monday, April 17, 2017


Hi -- I'm back. I thought this was one of the best weekends ever for this blog. Yastreblyansky, Tom, Crank, thank you.

This morning I see Club for Growth founder Stephen Moore wearing the cheerleader costume at The American Spectator:
Coal’s Colossal Comeback

President Trump is the king of coal.

Buried in an otherwise humdrum jobs report for March was the jaw-dropping pronouncement by the Labor Department that mining jobs in America were up by 11,000 in March. Since the low point in October 2016 and following years of painful layoffs in the mining industry, the mining sector has added 35,000 jobs.

What a turnaround. ‎It comes at a time when liberals have been saying that Donald Trump has been lying to the American people when he has said that he can bring coal jobs back. Well, so far he has brought them back.

There’s more good news for the coal industry. Earlier this month, Peabody Coal — America’s largest coal producer — moved out of bankruptcy, and its stock is actively trading again. Its market cap had sunk by almost 90 percent, during the Obama years. Arch Coal is also out of bankruptcy.

It turns out that elections do have consequences, after all.
Um, no, that's not right. As Jon Kemp of Reuters reported earlier this month, this isn't a Trump recovery for coal, and it's not much of a recovery in any case:
... [coal] production increased by almost 35 million tons in the third quarter of 2016, around 22 percent, according to the latest data from the U.S. Energy Information Administration.

And production is likely to have increased further in the fourth quarter, when the figures are published next month.

The increase in output should start to boost employment, with at least some of the 33,000 employees and contractors laid off between 2014 and 2016 likely to be rehired.
So only some of the jobs lost since 2014 are likely to come back. And the uptick started at a time when nobody believed Trump could win, in July-September 2016.

Coal's low point wasn't due to Evil Hippie Obama forcing everyone at gunpoint to go solar:
Coal producers were hit by a perfect storm of warm weather and a huge oversupply of natural gas during 2015/16.

The three months between December 2015 and February 2016 were the warmest winter on record, according to the National Oceanic and Atmospheric Administration.

Electricity generation fell by 4 percent compared with the same period a year earlier as warm temperatures cut heating demand.

But natural gas production was more than 2 percent higher than the previous winter as a result of the shale revolution.
Then natural gas production dropped starting in the spring of 2016, and coal became more competitive in price in the summer of 2016 -- long before the election:
Natural gas production has been falling year-on-year since May 2016 and gas prices have been on an upward trend since March 2016.

Gas has become steadily more expensive than coal. The delivered cost of gas moved above coal in July 2016 and by January 2017 gas was almost twice as expensive.
So now there's a coal bump. But as The Washington Post's Steven Mufson has reported, coal's long-term prospect's aren't great, and even if there's a comeback for coal companies, many of the coal jobs aren't coming back:
Some coal companies will survive, and some could thrive. Metallurgical coal will be needed for steel both in India and China as well as in the United States, especially if there is a boost in infrastructure spending. And thermal coal will still be used to generate electricity for years, even if at lower rates.

But in order to show profits, they will have to trim output from the oldest, least efficient mines in Appalachia (where Trump garnered crucial votes in the election) and shift their focus to the Illinois Basin and the Powder River Basin in Wyoming.

Those big open pit mines need fewer workers - doing nothing to help Trump bring back jobs for "our great miners."

"A lot of people conflate two primary things: the coal industry and coal jobs," said Chiza B. Vitta, a coal analyst at Standard & Poor's. "Even if the coal industry were to do better, that doesn't translate into coal jobs. Over time the process has become more and more efficient and they're able to mine with fewer and fewer people working."
So expect to hear that coal is roaring back. It isn't. Expect to hear that Trump deserves the credit for all the job increases. He doesn't.

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