Trump's orders may not save coal industry

President Donald Trump signed executive orders on Tuesday that begin the process of rolling back the climate regulations adopted by his predecessor, but he may be too late to help a coal industry damaged by economic trends and growing support among citizens and businesses for cleaner forms of energy, analysts said.

These trends - particularly low natural gas prices and cheaper renewable energy - and state policies aimed at reducing greenhouse gases could bring the country close to the goals set by President Barack Obama's Clean Power Plan, even if the rules that sought to cut carbon dioxide emissions are undone by Trump.

More than 30 states have adopted policies to encourage the development of wind, solar and other renewable technologies. Renewable energy is expected to account for 20 percent of U.S. power production by 2025. Less costly, cleaner burning natural gas continues to supplant coal among power producers.

"The marginal cost of gas for producers and getting it to market costs so much less than coal," said Ed Hirs, an energy economist at the University of Houston, who noted that natural gas prices are expected to drop. "It's enough to put coal out of business."

Many power and coal companies objected to Clean Power Plan on the grounds that it would do just that - force the shutdown of coal-fired power plants around the country and cripple the coal mining industry. Trump, a climate change skeptic despite the overwhelming scientific consensus, campaigned on rolling back environmental rules, reviving the struggling U.S. coal industry and unleashing the oil and gas sector. In signing his much anticipated executive order, he heralded a new day for the U.S. energy industry. Standing on a stage with a group of coal miners, Trump evoked the spirit of his 2016 presidential campaign, calling the miners "tough guys."

"We will unlock job producing natural gas, oil and shale energy. We will produce American coal to power American industry," Trump said at the Environmental Protection Agency's headquarters in Washington. "We will create so many energy job that will lead to incredible prosperity all throughout our country."

The executive orders are just the first step in rolling back Obama's polices. Undoing the rules will require a lengthy regulatory process, including public comments, and will almost certainly end up in court.

Legal challenges to the Clean Power Plan by industry groups, Texas and other energy-producing states are still pending, but Attorney General Jeff Sessions is expected to ask the D.C. Circuit Court of Appeals to hold off on a ruling while the administration reconsiders the policy. But the administration will face a wall of Democratic state attorneys general and environmental advocates, who argue that the EPA is obligated to regulate greenhouse gas emissions in some form or another under a 2007 U.S. Supreme Court ruling.

While the Clean Power Plan would have sped growth in clean energy and the reduction of emissions, dismantling federal climate regulations probably won't stop an inexorable spread of clean energy across the country and the decline of coal, energy analysts, economists and environmental activists say.

"There has been this kind of misconception that the Clean Power Plan (alone) will drive renewable growth," said Andrew Bischof, a senior equity analyst at the Chicago-based research firm Morningstar.

Instead, a future without the Clean Power Plan will not differ greatly from a future with it, said Bischof, who authored a report this month on the rise of renewable energy despite the threats to the Clean Power Plan. Morningstar's report predicts that the U.S. will come close to meeting the Obama administration's goals even without its plan, driven instead by states with aggressive renewable energy standards and consistently low natural gas prices. Coal-fired power plants might remain in business longer, but the country will not add coal-generated capacity as long as natural gas prices remain at or below $3 per million British thermal units.

Morningstar's forecast - considered radical by some in Washington - is not ironclad. It hinges on low natural gas prices, which could rise and turn utility companies back to burning more coal.

Trump's executive orders are undeniably a setback to the national movement toward green energy, some analysts said, and it remains in serious doubt whether market forces alone are enough to get the United States to the emissions cuts agreed to by Obama under the Paris climate accord, said Jason Bordoff, a former special assistant to Obama and now director of the Center on Global Energy Policy at Columbia University. In 2015, representatives from nearly 200 nations met in Paris to craft standards that would reduce carbon emissions and keep the average global temperature increase under 2 degrees Celsius.

"I don't think we're going to see people building new coal plants, even with the actions we saw today," Bordoff said. "But it may well put the Paris targets out of reach, even if we continue to make progress in that direction."

Morningstar's analysis echoes predictions made years ago by economists that market trends, not just federal regulations, would drive the changing energy mix, analysts said. The cost of mining, shipping and cleaning coal cannot compete with natural gas prices, which hit a near 20-year low in 2016. Even with a slight rise in natural gas prices expected for 2017, forecasts show prices dropping further still over the long term, according to an analysis released Tuesday by the New York-based investment firm Morgan Stanley.

Texas is already a model of how an energy market handles renewable energy and natural gas without the pressures of the Clean Power Plan, said Jim Marston, the vice president of clean energy initiatives for the Environmental Defense Fund, a national environmental research group. Even as state officials have fought federal climate initiatives, including the Clean Power Plan, cheap, abundant natural gas and expanding wind power have Texas on track to achieve most of the Clean Power Plan's goals, including a 32 percent reduction of greenhouse gases, Marston said.

"If the state does nothing else, we were going to get there," he said. "And that's true of a whole lot of other states."

Meanwhile, many corporations are considering the potential impact of climate change on their business while more investors are asking companies to consider and account for the impact of climate change on future earnings as they plan ahead. On Tuesday, Anheuser-Busch InBev, the world's biggest beer maker, said it plans to get all of its electricity from renewable sources by 2025.

Former EPA Administrator Gina McCarthy said in an interview on CNN Tuesday that Trump's executive order on climate change "sends a horrible signal." She added, however, that "despite what this executive order says, the clean energy trend in the U.S. has left the station and it is not going to return."