President-elect Donald Trump said he would preserve and bring back coal jobs. Given greenhouse gases, concerns about the environment and the fact most U.S. coal is ‘dirty,’ that may be easier said than done.
Unless, of course, the president-elect convinces Congress to seek tax breaks for facilities that capture carbon dioxide and deliver it to the oil industry to be used in underground oil production. That could turn things around quickly.
One Company That Could Prosper
Kemper County, Mississippi’s power plant, owned by The Southern Co. (NYSE:SOC) is one such facility originally designed to capture about 65% of its carbon-dioxide emissions and sell them to oil companies which would use them to extract crude oil from deep underground wells.
The Kemper project was approved in 2010. Thanks to construction and technology issues, the cost of the project has grown to nearly $7 billion. Current plans call for the power plant to achieve full commercial operation early in 2017.
Tax Credits Key
Democratic Sen. Heidi Heitkamp of North Dakota has already met with Trump to discuss what she called, “a realistic path forward for coal.” As Heitkamp noted, referencing the $7 billion cost so far, unique projects like Kemper can be problematic but the economic impact of clean coal is too important to ignore.
Legislative measures proposed so far could bring Atlanta-based Southern anywhere from $695 million to $4.5 billion according to calculations by Friends of the Earth. One of the group’s climate campaigners, Lukas Ross, called the Kemper project a “financial disaster” adding that the project does not merit federal subsidies.
Obama’s Last Minute Lump Of Coal
Meanwhile, the Obama administration just issued an eleventh-hour regulation on coal which takes effect Jan. 19 and represents what critics call one of those ‘job-killing’ rules Trump vowed to overturn when he takes office Jan. 20.
Known as the Stream Protection Rule, this is something the Obama administration has been working on for 6 years. It’s supposedly about keeping American waterways clean. Opponents call it a power grab aimed at allowing regulators authority to make coal too expensive for anyone to mine.
And The Winner Will Be …
Although Trump has not specifically addressed Obama’s so-called ‘stream rule,’ his pick for Interior secretary, Rep. Ryan Zinke of Montana is a fervent backer of coal mining and has already called for Congress to block the rule.
To unwind the rule once it becomes law would be time consuming. A quicker route for Republicans would be to block recently passed rules before they take effect. Such could be the case with this rule, although the time frame is quite short.
On the other hand, Trump has said that he favors clean air and water without unduly harming business.