Latest posts by H. Sterling Burnett (see all)
- Sugar Subsidies Should Go—Consumers And Candy Manufacturers Would Benefit - May 17, 2018
- Crazy and Crazier: Climate Change in The New York Governor’s Race - May 13, 2018
- Why Do Polar Bears Cry? - May 8, 2018
Though I won’t say President Donald Trump is directly responsible for the United States’ continued global oil and gas dominance, or the resurgence in coal’s fortunes, I don’t think its entirely coincidence either, since I’m fairly certain the previous White House occupant would have tried to stop any comeback for coal and did everything he could to limit oil and gas’s success.
Trump is reopening the National Petroleum Reserve in Alaska for business, and revisiting the various rules and regulations that contributed to coal’s decline. Under Trump, investors can have some confidence that if the coal industry and coal fired power plants struggle, the market, not federal interference, will be to blame.
U.S. oil and natural gas dominance was discussed in a June 2017 Energy Information Administration (EIA) report. The EIA wrote,
“Despite low crude oil prices and a 60 percent drop in the number of operating oil and natural gas rigs, U.S. petroleum supply still increased by 1.0 million barrels per day in 2015,” the report said. “U.S. natural gas production increased by 3.7 billion cubic feet per day, with nearly all of the increase occurring in the eastern United States.” As a result, according to EIA the United States remained “the world’s top producer of petroleum and natural gas hydrocarbons in 2015.”
Concerning coal, wishful thinking and pronouncements by climate alarmists and other anti-fossil-fuel activists opposed to President Donald Trump’s efforts to bring about a resurgence in the U.S. coal industry proved insufficient to halt economic reality. As natural gas prices have risen recently, coal use has surged at U.S. power plants. Reuters reports a rise in natural gas prices has stabilized production, improved natural gas export prospects, and reduced demand for natural gas electricity generation. This led to an increase in electric power production by coal-fired power plants.
During the first six months of 2017, natural gas prices for next-month delivery at Henry Hub were 46 percent higher than in the first half of 2016, while gas prices paid by electricity producers increased by 39 percent. Gas-fired power plants responded to higher prices by cutting generation 15 percent below the same period in 2016. Over the same period, coal-fired power plants picked up the slack, increasing their electricity generation by approximately 7 percent.
Higher gas prices stabilized domestic natural gas production and, combined with less use at electric power plants, freed up more natural gas for export to foreign markets, where U.S. gas prices are still considerably lower than prices paid for natural gas abroad. Reuters reports U.S. gas exports increased nearly 50 percent in the first four months of 2017.
Under Trump, soon we may even be talking about increased coal exports.