Energy Economist Says Coal Isn't Coming Back

Apr 22, 2017

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At a presentation at the University of Wyoming’s Energy Innovation Center, an energy economist argued that the coal industry will likely never recover to previous levels. That’s despite a small rebound in the first quarter of this year because of a cold winter.

Trevor Houser is a partner with the Rhodium Group, an investment management and policy research group. In his presentation “Can Coal Make A Comeback?” at the Energy Innovation Center, Houser said there are several strikes against coal: low natural gas prices, more renewable energies sharing the market, and a flat demand for electricity.

Even if the Trump administration removes environmental regulations, Houser said only about four percent of coal’s 30 percent decline can be attributed to federal environmental regulations. He said Wyoming has weathered busts before, but this one is different.

“For the state’s coal sector, I think this bust is for real and it’s not coming back,” said Houser.

“It’s time for folks to have a serious conversation about economic diversification and what comes next, and what can create sustainable sources of job creation, pathways for kids growing up in Wyoming that will keep them in state.”

Houser said by acknowledging coal’s permanent decline, there is an opportunity to make the discussion of economic diversification less political.

“[Before] if you wanted to talk about diversification it meant that you were waving a white flag in the war on coal. Now I think there’s space for a conversation in coal communities about ‘Yes, And…’ Like if I live in Gillette, continue to work in the coal industry as long as it’s commercially viable, and let’s think about what types of other investments can be made to bring new sources of job creation into the community,” Houser said.

Houser also pointed out that Wyoming does have some advantages over Appalachian states that were also hit by the coal downturn. He said Wyoming’s flat, open land and relatively educated workforce make it more appealing to investors and developers.