Trump’s energy order hints at a coal comeback – Liam Denning

Key topics.Trump's order may classify coal as a critical mineral.AI-driven energy demand revives coal debate.High costs and gas competition challenge coal's future..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Liam Denning___STEADY_PAYWALL___.The US Geological Survey lists 50 minerals designated as "critical." Some, such as lithium or graphite, are well known but many are obscure (looking at you ytterbium). You won't find coal there and nor will you find it mentioned in President Donald Trump's new executive order to "Increase American Mineral Production." But it is lurking there between the lines..Trump is invoking emergency powers under the 1950 Defense Production Act to encourage domestic production of a range of critical minerals, which are used in numerous defense, industrial and energy transition applications, and where the US has become dependent on Chinese supply and processing. Former President Joe Biden issued a similar order. A White House official told my colleagues at Bloomberg News that the minerals designation this time could also cover coal. The order's language backs that up, referencing the USGS list but adding a few more such as gold and copper before just slapping on the catch-all "and any other element, compound or material as determined by the Chair of the National Energy Dominance Council." The chair of this newly established "tiger team," as he calls it, is Interior Secretary Doug Burgum. I suspect coal might make it onto his list..Burgum has been vocal about his support for coal since even before he took the job. A prominent theme in his Senate confirmation hearing was the need for "baseload" power — that is, not solar and wind — to ensure the US won the artificial intelligence arms race with China. On that point, he noted that "we have the technology to deliver clean coal." More recently, he told Bloomberg News on the fringes of an energy conference in Houston that the US should reopen shuttered coal plants..The latter is an important point because it forces us to consider why those plants were shuttered. The overwhelming answer is cheap natural gas from the shale boom (which has also been a problem for nuclear power). Since 2000, coal has lost about 35 percentage points of market share in US power generation, with gas picking up about three quarters of that. I doubt the natural gas industry, which has generally cheered on Trump and Burgum, would appreciate federal aid for a competitor they have on the ropes..Coal is expensive, with an average capital cost of over $4,000 per kilowatt of installed capacity — roughly double even the surge pricing we are seeing right now for new gas turbines. Is part of that capital cost due to the extra environmental controls required to keep a lid on coal's toxic particulates? Absolutely. And, yes, an administration that seeks to aggressively roll back environmental protections might find a way — under emergency waivers, for example — to ease those costs somewhat. But no lawyer in the world can make coal cleaner than it actually is and private capital would still have to be persuaded that it is worth sinking hundreds of millions of dollars into plants that last 10 times as long as a presidential term..Coal consumption has dropped by about two-thirds since 2008. Far from being too dependent on imports, the US is a net exporter. Coal imports during the first nine months of 2024 were equivalent to 0.5% of consumption, according to figures compiled by the Energy Information Administration. The vast majority came from Canada and Colombia. Chinese coal was all of 0.02% of consumption. And while the absolute stock of coal held by utilities has fallen over time, it has increased relative to demand..Projected growth in electricity demand from AI-focused datacenters is providing a lifeline to existing coal-fired power stations to some degree, keeping them open longer than otherwise through a combination of capacity payments and higher output. But the mainstream conversation about powering AI revolves around a combination of gas, renewables and nuclear power. In keeping with the 'intelligence' aspect of all this power, there is also a lot of work happening around using smarter electricity demand management, rather than just new supply, to fortify the grid (see this fascinating new study out of Duke University's Nicholas Institute for Energy, Environment and Sustainability)..Trump made a big show of supporting "beautiful" coal and the industry's miners during his first term, even considering a plan to force utilities to hold minimum stockpiles to boost demand, which never made it to a formal proposal. His "energy emergency," combined with this latest, expansive minerals order — and Burgum's evident favor — suggest the administration may well use national security concerns and the talismanic invocation of AI to be bolder this time. While lobbyists might cheer, private capital's response would be less effusive, I suspect. In any case, should Trump use Cold War powers to force coal onto the grid to develop AI, it will be the most ludicrous juxtaposition of three different centuries imaginable..Read also:.Kusile fraud: Six arrested in Eskom corruption bustNew nuclear and gas power unlikely in SA's near futureTransforming SA's energy future: Why we should say goodbye to big power stations.© 2025 Bloomberg L.P.

Trump’s energy order hints at a coal comeback – Liam Denning

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