The U.S. coal sector continued to struggle under the pro-coal Trump administration and will likely face new challenges on the political front under a Biden presidency and a U.S. Congress controlled by Democrats.

While President Donald Trump and the U.S. Congress rolled out several policies and legal actions favorable to the sector during his tenure, coal employment and production in the country hit record lows amid ongoing coal plant retirements. President-elect Joe Biden will enter office with ambitions to battle climate change among his top priorities, which could create headwinds for the carbon-intensive coal industry.

"We must come to grips with the fact that a new administration — one committed to a 'zero-carbon economy' and the 'Green New Deal' — will soon take over," West Virginia Coal Association President Chris Hamilton wrote in an open letter to industry supporters dated Dec. 30, 2020.

Hamilton warned that there are "forces at work every hour of every day plotting the demise" of the coal industry. He called on coal supporters to contact local, county, state and congressional leaders to express concern.

Wyoming Coal Association Executive Director Travis Deti said, "It doesn't look like there's much of a seat at the table" for the coal sector under a Biden administration.

"[During the Trump administration] we at least got our phone calls answered, and we could sit down across the table from agency personnel and talk through some issues," Deti said in an interview. "Frankly, we expect those doors to be closed again to us."

Average quarterly coal mining employment fell 23.6% from the first quarter of 2017, when Trump took office, to the third quarter of 2020, according to a recent S&P Global Market Intelligence analysis. Coal production fell 31.5% over the same period.

Mary Anne Hitt, the Sierra Club's national director of campaigns, wrote in December 2020 that the environmental group's efforts to transition the U.S. away from coal were highly successful despite opposition by the Trump administration and its allies. Hitt noted that nearly 100 coal plants have been committed to retirement since Trump took office.

"Of course to meet our climate goals, we still have 192 coal plants to retire before 2030, but with a more supportive incoming presidential administration and the increasing popularity of climate action in state and local governments, it's fair to say that we have a clear path to transition our country to run completely on clean energy by the end of the decade," Hitt wrote.

Plans to work with the administration

Some coal industry leaders are more optimistic, and before the election, several coal executives suggested that a Biden presidency would likely not do much to change the industry's general course.

National Mining Association spokesperson Conor Bernstein told Market Intelligence that the trade organization is hoping to engage with the incoming administration on shared priorities. This includes infrastructure reinvestment, which could boost demand for metallurgical coal used in steelmaking.

"Building back better begins with American supply chains and resources," Bernstein said. "In addition, with U.S. coal exports reaching more than 70 nations, we believe U.S. coal can and should continue to play an important role in providing energy security to our allies."

The sector is also hopeful that the administration will embrace carbon capture, utilization and storage technology as a way for the American coal industry to participate in a transition to lower overall greenhouse gas emissions. Such technology paired with coal has proven prohibitively expensive to date, and the availability of cheaper alternatives has prevented many companies from investing further.

"While it is clear the electricity grid is undergoing a transition, we believe coal-fueled electricity will still be needed for the foreseeable future," America's Power President and CEO Michelle Bloodworth told Market Intelligence. "We believe the transition to these fuel sources needs to be done gradually to ensure we don't go too far, too quickly and lose the dispatchable resources the grid will need for the foreseeable future."

Bernstein noted that the Biden campaign has called for accelerating development and deployment of carbon capture, utilization and storage technologies. Bloodworth and Bernstein believe that Congress has substantial common ground to build from in 2021, including on coal mining issues.

Betsy Monseu, CEO of the American Coal Council, said the organization's policy objectives remain largely unchanged. They includes retaining existing U.S. coal plants, advancing coal research and technology, and informing people about exporting U.S. coal to other countries.

Monseu also noted recent work by the U.S. Energy Department that could boost the future of the commodity in the country. That includes efforts to lower the cost of carbon capture technology; build coal plants that are "more flexible, highly efficient, and near-zero emissions;" produce rare earth elements from coal; and support technologies that convert coal to other products such as carbon fiber or graphite.

Hope for a market rebound

Whether or not the industry immediately faces regulatory or legislative obstacles, it does expect a reprieve from the market in 2021. Several analysts expect demand in the sector to bounce back from lows created by the COVID-19 pandemic as the economy begins to recover and electricity demand rises.

Monseu said financial pressures, lower gas production and pipeline constraints are a few factors suggesting gas prices may be high enough to encourage some gas-to-coal switching in the near term.

"Coal plants act as a market and operational hedge against natural gas," Monseu said. "They are fuel-secure resources that can fill in the gap when renewables are not available."

The sector will also likely continue to emphasize its message that coal is important for grid reliability. While the incidents resulted from a variety of factors, Bloodworth and Monseu both pointed to recent California power outages as a cautionary tale against moving away from fossil fuels.

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