Will Coal Really Make a Comeback Under Trump?
Among the topics that received little attention during the seemingly endless U.S. presidential campaign was energy policy. Perhaps that was due to a bright line between the two candidates and their parties.
On the Democratic side, Hillary Clinton supported the energy policies of the Obama administration and promised to “put a lot of coal miners and coal companies out of business.” President-elect Donald Trump promised to “bring coal back 100%.”
While a Trump administration together with a Republican-controlled Congress may be able to repeal the Obama administration’s Clean Power Plan, it remains to be seen whether that alone will return coal mining to Appalachia.
The Republican party platform promises to “do away with [the Clean Power Plan] altogether,” and chides the Democrats for not understanding that “coal is an abundant, clean, affordable, reliable energy resource.”
It is arguable that the coal industry in Appalachia can be saved by a Trump administration or anyone else. The demise of Appalachian coal is primarily due to cheaper and cleaner coal from the Powder River Basin of Wyoming and Montana. A recent article by Steve Cicala at the University of Chicago’s Energy Policy Institute details how the coal industry got to this point.
In the near term, though, coal stocks are on the upswing and alternative and renewable energy stocks are on the downswing. Coal miners CONSOL Energy Inc. (NYSE: CNX) and Cloud Peak Energy Inc. (NYSE: CLD) were both trading up sharply in Wednesday’s premarket session.
Cloud Peak mines coal only in the Powder River Basin, which may account for the fact that it has been one of the industry’s survivors after the bankruptcies of Arch Coal, Peabody Energy and Alpha Natural Resources. Shares traded up more than 12% in Wednesday’s premarket to $7.38, above the stock’s 52-week range of $1.08 to $6.88.
CONSOL’s coal resources are located in Appalachia, and the company’s stock price was up more than 8% this morning, at $18.40 in a 52-week range of $4.54 to $20.66. CONSOL spun off 20% of its coal mining business last year into a publicly traded company, CNX Coal Resources L.P. (NYSE: CNXC).