Monday, December 5, 2016

Coal Is Being Killed By Overregulation: That's a Myth

For a while now I have been listening to Republicans talking about how the coal industry is being devastated by government regulations that have been implemented - by evil liberals. They talk about bringing jobs back by reducing regulations. Unfortunately, people take political sound bites as the truth.  Since The Donald was making speeches about bringing back coal jobs, and he has his own version of reality, I decided to do some research.
Before starting my research, I was under the impression that the coal industry had been devastated, maybe producing a quarter or half as much as it once had. I knew that many coal jobs had been eliminated; I figured that some of it was due to productivity improvements, but that most of the jobs were lost because of coal being phased out. It turns out that I had been duped by conservative politicians, as many people still are.
At the height of coal mining employment there were about 800,000 coal miners.  That was in ….. 1920. Coal mining employment has decreased steadily since 1920 (except for the period from 1970-1980 when employment actually increased by 50%).  Currently there are about 66,000 coal miners. That means that coal mining employment has dropped by 92% since its height. The coal industry must be in far worse shape than I thought, so let’s take a look at the overall coal industry.
Coal production went down from 1920 until about 1940, which we would expect since employment went down during that period. From 1940 until 1950, coal production went up a bit, probably due to the war effort and subsequent rebuilding.  During that period, the coal mining employment … decreased.  In 1950 coal production resumed its slide. However, in 1960, as Americans started adopting consumer appliances and electronics, electric usage started climbing steeply. Coal is cheap, so as electric usage increased so did coal production. Coal usage kept increasing until 1970 when the Clean Air Act was passed. The Clean Air Act of 1970 is what initiated serious regulation of power plants, and, thus, coal.  Surely the Clean Air Act must have dealt the death blow to this industry that’s been devastated by regulations.  No. Production of coal in this industry that’s been devastated by regulations kept increasing through the ‘70s.  In fact, it kept increasing all the way until 2006.  If you’ll remember, 2006 was near the end of the Bush administration, which furiously cut regulations.
Several things have led to the decrease in coal production since 2006, primarily electric usage and natural gas.  Electric usage, which had been increasing ever since its introduction, has roughly leveled off. Furthermore, since 1988, utilities have been steadily increasing the use of natural gas to fuel power plants.  In fact, on November 14th, the Wall Street Journal ran an article about how natural gas is displacing coal as the fuel of choice for power plants. In the article, Rebecca Smith says that power plant investors prefer natural gas over coal because natural gas plants can be built faster, cost less to operate, and are more efficient than coal plants.  Furthermore, shale gas has made copious quantities of inexpensive natural gas available well into the future. The truth is, only coal miners and coal companies want coal burning power plants.
For years, Republications have been telling coal miners that they’re losing jobs due to excessive regulation. That’s far from the truth. The number of coal miners was decreasing, even while coal production was increasing. What’s the actual reason that the number of coal miners has decreased 92% from its high in 1920? Pickaxes. In 1920, miners used pickaxes to mine coal, but modern coal miners use large, powerful equipment to mine coal. Esentially, as the need for coal increased, so did coal mining productivity. Modern coal miners produce 15 times as much coal as their counterparts did in 1920. It simply doesn’t take as many miners to mine coal as it used to. 
The Donald promises to add “millions” of jobs to the energy sector – including coal mining jobs. America currently has about 66,000 coal miners to produce all the coal it needs. If America added 66,000 coal miners, coal production would be doubled. We would have to build a large number of expensive, inefficient new coal plants - and billions of unneeded light bulbs to use up the extra electricity.


Most of the data from this post came from the U.S. Energy Information Administration’s Annual Energy Review: and the U.S. Energy Information Administration’s Coal Data Browser:

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