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BIG HIT FOR US COAL PRODUCTION: One of the largest U.S. coal miners is taking steps to wind down its production of thermal coal, used in coal-fired power plants, another signal of coal power’s shaky economics as more utilities move toward cheaper natural gas and renewables.
Arch Resources announced Thursday it would shrink production from its Powder River Basin mines. It expects to produce less than 55 million tons of coal from those mines this year (down from nearly 75 million tons in 2019). Over the next two to three years, the coal miner says it could slash those production levels in half as it’s looking for a buyer to offload those assets.
“We view this systematic winding down of our thermal operations – in a way that allows us to continue to harvest cash and to fund long-term closure costs with ongoing operating cash flows – as the right business solution in the event we are unable to find an appropriate buyer,” said Paul Lang, Arch Resource’s CEO, in a statement.
The coal company also reported net losses of $191.5 million in the third quarter of this year.
Sign of the times: Powder River Basin coal was always seen as more resilient than Appalachian coal to air pollution regulations, but economics and increasing climate change concerns in recent years have now dealt a blow.
More and more utilities are announcing plans to shutter most or all of their coal-fired power plants over the next decade as they chart a course for large emissions cuts.
U.S. coal production has declined steadily since its peak in 2008, and last year, production fell to its lowest level since 1978, according to the Energy Information Administration. The EIA is expecting an even deeper production decline this year.
A Biden victory could bring an even quicker drop for coal: Democratic nominee Joe Biden’s aggressive climate plans, including a goal to achieve carbon-free power by 2035, would only accelerate market trends leading to coal’s decline, Moody’s Investor Service said in a research note this week.
Under the clean electricity standard Biden proposes, “coal-fired power plants would be hit harder and more quickly than other fossil fuels (including natural gas),” the note said.
Nonetheless, Moody’s expects thermal coal demand will continue to decline even if President Trump wins reelection. The Trump administration has tried to boost coal, helping preserve some demand for thermal coal, but the efforts have been “insufficient” to revive the coal market, the investor service said.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
AS WE TOLD YOU…EUROPE REJECTION OF US GAS: Ah, yes. We told you this could happen (maybe we didn’t expect it so soon). The French government has blocked a proposed $7 billion U.S. LNG deal because it was worried the shale gas poised to be transported through the export facility is too dirty, according to Politico.
France’s government intervened to “delay, if not outright cancel,” an agreement between a domestic company, Engie, to buy LNG delivered from NextDecade’s planned Rio Grande export facility in Brownsville, Texas. The government, which has a part ownership stake in Engie, worried U.S. natural gas producers emit too much methane at the West Texas oil and gas field that would supply the gas to the export facility.
This could just be the start: The incident highlights a growing concern among natural gas exporters and analysts, covered by us last week. That is, the Trump administration’s rollbacks of methane regulations from oil and gas operations could make U.S. LNG less competitive globally, especially if Europe moves forward with imposing methane emissions standards on imports.
Charlie Riedl, executive director for the Center for Liquefied Natural Gas, even said Biden, if he were to win, could be a silver lining for U.S. LNG if he reimposes direct regulation of methane. “As we see mandates coming from the EU, they are going to want to know our government is involved with reducing methane,” he recently told Josh.
DEPARTMENT OF INTERESTING TIMING: Energy Secretary Dan Brouillette announced yesterday the Trump administration approved seven applications for companies to export LNG from their facilities through 2050.
These are the first applications approved through an Energy Department policy finalized in July allowing companies with existing LNG export licenses to non-free trade-agreement countries to export natural gas through 2050, instead of just for 20 years, as is currently allowed.
“Increased LNG exports means more American energy production, more energy security, and more American jobs,” said Brouillette, who touted that U.S. LNG exports have more than quadrupled in the Trump administration, making it the third biggest exporter.
CARBON TAX REPUBLICAN FITZPATRICK FIGHTS TO KEEP SEAT: Rep. Brian Fitzpatrick will have the distinction of being the only Republican in Congress who backs a carbon tax if he can hang on to his seat covering the Philadelphia suburbs, Josh reports in pre-election profile this morning. Previous supporters of the policy are planning to retire or have lost their seats.
Climate change is not a dominant issue in his race, but Fitzpatrick is offering proposals that challenge GOP orthodoxy in order to win the support of college-educated suburban swing voters who value environmental protection and pragmatism.
Fitzpatrick, a 46-year-old former FBI agent, is an accountant by trade who understands the economic costs of ignoring climate change, friends and allies say, and appreciates carbon pricing for its efficiency.
“When you are a Republican, being against all forms of taxes is very dogmatic. Nobody likes taxes. But a carbon tax is the most cost-effective way to reduce emissions. Brian recognizes that,” said former Rep. Ryan Costello, a fellow centrist Republican who opted not to run for reelection in Pennsylvania’s nearby 6th District.
Supporters expect Fitzpatrick to succeed because he has managed to earn respect from the Left, and not piss off the Right, with his climate advocacy. His carbon tax position, “will only help Fitzpatrick the way it helped me,” said former Rep. Carlos Curbelo, who lost his southern Florida House seat in the blue wave of 2018.
CONSERVATIVE GROUP DROPS $$ ON HOUSE REPUBLICANS: Citizens for Responsible Energy Solutions, which, relatedly, has endorsed Fitzpatrick even though it opposes a carbon tax, is launching a new multi-state $500,0000 digital ad campaign today in support of House Republicans.
The ads, running across social media platforms through election day, credit incumbent Republicans for seeking to “grow the clean energy economy through support of greater advanced energy research, development, and deployment.” The ads are supporting Reps. Dan Crenshaw of Texas, Garret Graves of Louisiana, Cathy McMorris Rodgers of Washington, Tom Reed of New York, Mike Simpson of Idaho, and Elise Stefanik of New York.
OBAMA STUMPS AGAINST TRUMP AND HIS APPOINTEES: Former President Barack Obama, campaigning for Biden in Philadelphia last night, attacked Trump’s EPA and Interior appointees for their backgrounds as lobbyists.
Obama suggested the “destructive” deregulatory agendas carried out by EPA Administrator Andrew Wheeler and Interior Secretary David Bernhardt are motivated by their background representing fossil fuel interests.
“The Environmental Protection Agency that’s supposed to protect our air and our water is right now run by an energy lobbyist that gives polluters free reign to dump unlimited poison into our air and water,” Obama said. “The Interior Department, that’s supposed to protect our public lands and wild spaces, our wildlife and our wilderness. And right now that’s run by an oil lobbyist who’s determined to sell them to the highest bidder.”
Obama also plugged Biden’s $2 trillion climate change agenda, noting his former vice president would “pay for it by rolling back that tax cut for billionaires.”
GRADING CLEAN ENERGY JOBS: Clean energy workers benefit from higher-than-average median wages, a greater likelihood of healthcare and retirement benefits, and higher unionization rates than many other private sector jobs, according to a new report Thursday from Environmental Entrepreneurs, the American Council on Renewable Energy, the Clean Energy Leadership Institute, and BW Research.
Clean energy jobs — which include everything from wind turbine technicians and solar panel installers to clean energy electricians and construction workers — see median hourly wages that are roughly 25% higher than the national median wage, the report finds.
Those wages are also competitive with fossil fuel jobs. Coal, natural gas, and petroleum jobs pay about $24.37 an hour, compared to solar and wind jobs that pay roughly $24.85 an hour, the report says. Energy efficiency jobs pay about $24.44 an hour.
AMY CONEY BARRETT AGAIN DODGES ON CLIMATE AGAIN: Trump’s nominee for the Supreme Court repeatedly defended her refusal during her confirmation hearing to give her direct views on climate change in responses to written questions from Senate Democrats.
“The Supreme Court has described ‘climate change’ as a ‘controversial subject[]’ and a ‘sensitive political topic[],’” she stated several times in her written responses. “As a sitting judge, it would be inappropriate for me to weigh in further on the matter.”
As a reminder, Barrett declined to offer her views on climate science during her confirmation hearing last week, telling Sen. Kamala Harris that climate change is a “very contentious matter of public debate.” Her response drew immediate criticism from Democratic senators and environmentalists, who said her refusal to acknowledge mainstream climate science is disqualifying.
Barrett’s relationship with the oil industry: Barrett, in her written responses to senators, also noted she has recused herself from cases involving four major Shell Oil entities “in an abundance of caution” because her father worked as an attorney for the oil major. She declined to say, however, whether she would recuse herself from cases involving the American Petroleum Institute, despite Sen. Sheldon Whitehouse pointing out her father had been an “active member.”
“The question of recusal is a threshold question of law that must be addressed in the context of the facts of each case,” Barrett said.
2021 BIOFUELS MANDATE MUST ACCOUNT FOR COVID, OIL-STATE SENATORS SAY: “Put simply, EPA must not mandate blending too much biofuel into a dwindling fuel supply,” wrote 15 Republican senators, led by Sen. Shelley Moore Capito, in a Wednesday letter to Wheeler.
Their letter comes as the EPA is weighing at what level to set requirements under the Renewable Fuel Standard to blend biofuels into the fuel supply. The agency’s proposal isn’t likely to come before the election, as the issue puts Trump in the middle of farmers and the oil industry, two typically solidly red constituencies.
In the run-up to the election, Trump has taken steps to boost biofuels, with an eye to Iowa where the presidential contest looks closer than in 2016.
The oil industry, including American Fuel and Petrochemical Manufacturers and the American Petroleum Institute, were quick to praise the Republican senators’ letter, reiterating that higher biofuels mandates would risk refineries shutting down and hurt consumers. The Renewable Fuels Association, however, said the oil-state senators are asking the EPA to violate the law, arguing they’re using the pandemic as an opportunity to undermine the RFS.
DEMOCRATIC BILL WOULD HALT FOSSIL FUEL INVESTMENTS: Sen. Jeff Merkley of Oregon introduced legislation yesterday to prohibit financial companies from making new investments in fossil fuels. Merkley, a liberal supporter of the Green New Deal, introduced a second bill that would block U.S. government assistance to countries or entities that support fossil fuels.
“It’s time to prioritize the interests of the American people and the planet above the wishes of fossil fuel CEOs who want to hold our economy hostage,” Merkley said.
CLIMATE RESILIENCE BOOSTS CITY’S COMPETITIVENESS: City governments should deepen their work on addressing climate change effects, such as wildfires, intense storms, and sea level rise, not only to avoid the risks but also to attract more investment, private sector capital, and residents, the Center for Climate and Energy Solutions said in a new report today.
Companies, investors, credit rating agencies, and the real estate industry are all starting to pay more attention to cities’ resilience efforts, and they’re raising questions for cities that don’t have plans to address their climate risks, said Amy Bailey, C2ES’ director of sustainability and engagement and lead author of the report. She told Abby city budgets are starting to take hits as intensifying extreme weather events damage city infrastructure.
At least some cities are beginning to quantify the economic benefits of climate resilience, Bailey added. Miami Beach, for example, is assessing the benefits of actions like elevating the roads to address sea level rise, which would protect homes’ property value and city’s property taxes, she said.
The Rundown
Wall Street Journal Carbon pledge lifts wind and solar stocks in China
Bloomberg Exxon CEO plans layoffs, underscores faith in fossil fuels
NPR Millions of homes are at risk of wildfires, but it’s rarely disclosed
Bloomberg Peak gas is coming to the U.S. sooner than anyone expected
Calendar
FRIDAY | OCT. 23
11 a.m. The United States Energy Association will host an online press briefing to examine energy after the 2020 election.
TUESDAY | OCT. 27
10 a.m. The American Gas Association will host a briefing to present observations on the natural gas market as the U.S. moves into the 2020-2021 winter heating season.
WEDNESDAY | OCT. 28
4:30 p.m. ClearPath and the Clean Air Task Force will host an online event titled, “Universities Going Nuclear,” which will explore reactor projects at Abilene Christian University, the University of Illinois, and the University of Tennessee Knoxville.
THURSDAY | OCT. 29
12 p.m. Citizens for Responsible Energy Solutions Forum will host an online event titled, “The future of industrial emissions: A lighter climate footprint for heavy industry”
