The revitalization of the American coal producing industry was one of the key messages in the campaign of the US elected president. Moreover, Donald Trump declared he didn’t believe in climate change caused by people and promised to withdraw America from the Paris Agreement on Climate Change. Governing the country will most probably be nothing like the campaign and in an interview for NYT Trump said he would maintain an open attitude. What are the options of the new administration in Washington?

Large coal companies in the United States actually started bankruptcy procedures in the current year. In the same one, according to data disclosed by the Energy Information Administration (EIA) coal production in 2016 was 700 million tons, but down from more than 1 billion tons in 2014. The decline of the coal industry came throughout the growing environment concerns at global level, promoted by the Obama administration in the United States, and especially in the context of lower production costs of other cleaner energy resources.

Despite a possible withdrawal from the Paris Agreement, the US administration will have no certainty that the coal industry comes back on a strong upward trend. Eliminating or providing a more permissive legislative framework for the production of oil and gas, another element promoted by the new US president, the opening of federal lands for extraction activities and unlocking the offshore projects cannot, from this perspective, but help to stimulate increased competitiveness of energy resources, thus affecting the chances of development of the coal industry.

In the context of open and cost free competition with less polluting resources, coal is unlikely to advance towards the revival desired by the elected president. In this case, however, the symbolic power of decisions made in energy policies in correlation with environment protection may be more relevant. Simple messages of a change of approach from America can work towards changes in strategy and approach globally, leading to the questioning of compliance and long-term sustainability of an agreement reached with great difficulty and following complex and lengthy negotiations. A potential withdrawal of the United States in the first year after the signing of the Paris Agreement (the other option being to wait a minimum period of 3 years and comply with the agreement for another year), would create a global shock wave from this point of view.

The availability of a diverse and rich range of extremely competitive energy resources in terms of price is an attribute of America, but not of many other countries, such as China. (Romania also benefits from an energy mix and a vision for 2030 that is based on this reality.) Or, if in the context of this offer being available, the revival of coal in the US will not be extremely easy, countries holding large reserves of coal may adopt, given a potential American withdrawal from the Paris Agreement, a more intensive use of coal. For example, China’s motivation to continue their commitment towards the Paris Agreement is expected to diminish significantly in the case of non-application of the Agreement or withdrawal of the American side from the agreement.

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This article was first published in the printed edition of energynomics.ro Magazine, issued in December 2016.

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