Analysis

America’s King Coal Hopes to Reign in China

Environmental regulations and a boom in natural gas are destroying the oil industry.

When he was still a candidate for the presidency, Barack Obama famously predicted in 2008 that under his administration, “if someone wants to build a coal power plant, they can, it’s just that it will bankrupt them because they are going to be charged a huge sum for all that greenhouse gas that’s being emitted.”

As president, Obama failed to enact the sort of cap-and-trade legislation that would have taxed emissions but constructing new coal plants has become virtually impossible as a result of new environmental standards.

The regulatory obstructionism of the current government is only in part to blame for coal’s struggles however. Gas’ huge success is killing the competition.

Improvements in drilling techniques are unlocking vast shale gas and oil reserves across the American northeast in states that used to be dominated by coal and steel production.

In this part of the country, also known as the Rust Belt, the coal workforce has shrunk by 90 percent in the last forty years. Now, energy companies are planning billions worth of investments to revitalize the natural gas industry.

Coal is forced to turn elsewhere and there is a huge market to be found in China. Coal fuels almost 80 percent of China’s electricity. Although it has the second largest proven coal reserves in the world after the United States, in 2009, China became a coal importer for the first time in its modern history. But a fraction of its imports are American.

China doesn’t represent a big market for the United States either. Last year, less than 7 percent of American coal exports left the country via Pacific Ocean ports. The vast majority of exports is still headed for Europe. Yet there are huge coal reserves situated nearby in the states of Idaho, Montana and Wyoming.

Plans are underway to build six major new port facilities in Oregon and Washington to ship more coal to China but again, the industry is facing pushback from environmentalists.

In the absence of a federal framework to curb emissions, the leftist state governments in the Pacific northwest will likely be tempted to impose restrictions of their own as soon as coal export terminals start appearing on their coastlines.

In Portland, Oregon on Monday, environmental activist Robert Kennedy Jr. predicted that increased oil exports would leave the state “with a legacy of pollution, poison and corruption.”

Coal doesn’t share its wealth. It keeps it for itself and it makes a few people billionaires by impoverishing everyone else. Coal is crime. Do not let it come through this community.

Members of President Obama’s Democratic Party are in the majority in the state legislatures of Oregon and Washington. The governors of both states are Democrats. It’s likelier that they will listen to the likes of Kennedy than advocates of coal, whatever the cost to the industry.