News
In Ohio Valley Visits, Trump Administration Pushes Policies Supporting Mining And Metals
By: Jeff Young | Becca Schimmel | Brittany Patterson | Ohio Valley ReSource
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In back-to-back events this week President Trump and his commerce secretary visited the Ohio Valley to tout administration policies aimed at propping up two of the region’s traditional but faltering industries — metals and mining.
The president used a Tuesday rally filled with West Virginia coal miners to unveil a new plan to ease pollution requirements on coal-burning power plants.
The next day, Commerce Sec. Wilbur Ross presided over the ceremonial start-up of a production line at a Kentucky aluminum company that has increased production in response to Trump’s tariffs on imported metals.
The administration is using regulatory rollbacks and extraordinary intervention in markets in an attempt to deliver on campaign promises to bring back the Ohio Valley’s beleaguered metal works and mining industries. But critics warn these moves come at a steep cost to the environment and other sectors of the economy and have little guarantee of lasting benefits.
Coal Comeback?
Speaking at a campaign rally in Charleston for state attorney general and U.S. Senate candidate Patrick Morrisey, Trump touted a coal industry “comeback” in West Virginia.
“The coal industry is back,” Trump told the cheering crowd, many of whom were sporting hard hats and carrying “Trump Digs Coal” signs.
From candidate to president, revitalizing the coal industry and putting miners back to work has been a staple of the president’s rhetoric. Appalachia has long been Trump’s preferred backdrop to rail against the regulatory “war on coal” and praise his administration’s efforts to reinvigorate the industry.
But statistics on the industry show a far more muted comeback, and analysts say it is unlikely to last.
The West Virginia coal industry has improved under Trump. Production is up nearly 27 percent since the middle of 2016, driven largely by an uptick in coal exports for steel production.
But other parts of the Ohio Valley have seen little change in coal employment. And a new report by West Virginia University forecasts coal production in the state will level off during the next two years and decline sharply during the next two decades.
Trump’s Power Play
Replacing the Clean Power Plan may be the administration’s largest action yet to boost coal. That Obama-era rule aimed to cut greenhouse gas emissions from power plants by more than one-third over the coming decades in an effort to stem the effects of climate change.
Trump’s previous Environmental Protection Agency Administrator, Scott Pruitt, announced last year in Kentucky that he would replace the Clean Power Plan with an alternate rule.
This week, the EPA unveiled the long-awaited replacement for the Clean Power Plan. The new Affordable Clean Energy, or ACE, rule takes a much narrower approach to regulating greenhouse gas emissions from the power sector.
Trump’s EPA envisions individual states taking the lead. Under the new proposal, states would have the authority to craft their own plans for how to reduce emissions at the power plant level.
Chris Hamilton with the West Virginia Coal Association expressed optimism.
“It will help, there’s no question about it,” he said. “We’re hopeful and we don’t see any reason that would serve as a barrier to investment and the future of coal.”
Environmental and public health groups pushed back against the new proposal. Bill Price, an organizing manager for the Sierra Club based in Charleston, said West Virginians should expect to see their air quality and health decrease because of the rollback of the Clean Power Plan.
“This plan that we’re calling the ‘Dirty Power Plan’ leaves it up to the states to decide how much or if they will reduce emissions from coal-fired power plants,” he said. “The history here in West Virginia is the regulatory agencies don’t do a very good job.”
James Van Nostrand, a law professor and director of West Virginia University’s Center for Energy and Sustainable Development, said the plan does not seem likely to dramatically change the outlook for coal. He said in an economic climate where natural gas is cheap and the price of renewable energy continues to fall, the appetite for investment in coal-fired power plants is small.
“Spending more money to make them more efficient just makes the price higher that you’ve got to receive in order to make these plants work,” he said.
The Trump administration’s analysis of the rule also predicts minimal change in the coal industry’s fortunes. The EPA finds the amount of coal produced in the U.S. is expected to drop, even with the Trump administration’s new Affordable Clean Energy rule.
Overall U.S. coal production is expected to decrease and in Appalachia, coal mines would produce at least 78 percent less coal in 2035 than they did last year.
EPA will accept comments on the rule for 60 days.
Man of Steel
Commerce Sec. Wilbur Ross, who made millions as a steel industry magnate, is a champion of the administration’s efforts to impose tariffs on imports of steel and aluminum. Ross was in Hawesville, Kentucky, on Wednesday to see for himself one of the ways the tariffs are playing out.
The Ohio Valley still provides more than 44,000 jobs in the steel and aluminum industries despite sharp declines over the years, largely due to foreign competition.
Century Aluminum, with a facility in Hawesville, is the country’s largest remaining primary aluminum producer. Ross visited for a ceremony as Century restarted a production line. The company is increasing production by 60 percent and adding about 275 jobs as part of their reinvestment in the smelter.
“We have all of the ingredients to succeed and all we needed was the fairly-traded market,” Executive Vice President Jesse Gary said. Gary credited the Trump administration’s tariffs with allowing his company to start up an idled part of the facility.
“That gave us the fairly-traded environment we needed in order to restart those lines and so it’s as a direct result of that.”
But tariffs are a double-edged sword, and other industries in the Ohio Valley are feeling the cuts.
Some have suffered from higher prices on raw materials, others from the retaliatory tariffs other countries have used to target some of the region’s major exports.
Agriculture, such as soy growers and hog producers, and the region’s auto industry, a major employer, have been especially hard hit.
Perry Bennett is the general manager for Asahi Forge of America, which uses imported metals for the auto parts it makes at a facility in Richmond, Kentucky. Bennett said even if the company could source some items in the U.S. they would still face metals tariffs.
“The problem would be we’d have to use Japanese raw material so we’d still be tariffed,” he said.
Many economists say tariffs generally have a negative overall effect on the economy, and they warn of a possible trade war with countries such as China. But Ross downplayed those threats.
“They export more to us than we export to them,” Ross said of China. “So if it ever came down to a tit-for-tat situation, they will run out of ammunition long before we do.”
Ross also addressed the threat of retaliatory tariffs targeting one of Kentucky’s best-known exports, bourbon.
“I think the real bourbon drinker’s going to have his or her bourbon even if they do charge them a little bit more,” Ross said. “Maybe they’ll take two sips less but I don’t think he’s going to go from bourbon to French wine so fast.”
Ross’ visit comes as an investigation into whether imported cars and parts might also be subject to tariffs.
Political Play
The Trump rally also supported the U.S. Senate campaign for Republican Attorney General Patrick Morrisey, who is challenging incumbent Sen. Joe Manchin. Manchin is the last remaining Democrat among the West Virginia Congressional delegation, and is viewed as vulnerable in a state that voted overwhelmingly for Trump.
The coal issue is central to Morrisey’s campaign. As the state’s attorney general he was a leader for a coalition of 27 states, utilities and trade associations in a legal challenge against the Clean Power Plan, arguing it was overly-broad. The U.S. Supreme Court halted its implementation.
Republican candidates also hope tariffs could be a winning issue in an industrial region that suffered from global competition in a free trade era.
As the midterm elections approach, the Trump administration is clearly eager to remind voters of its efforts to fulfill campaign promises.
A Trump campaign visit to support Kentucky Rep. Andy Barr’s reelection is in the works. Barr faces a tough challenge from Democratic nominee Amy McGrath , a former Marine fighter pilot.
On Friday Trump plans to visit Ohio for an event with Senate candidate Jim Renacci, who is challenging Democratic incumbent Sen. Sherrod Brown.
Also on Friday, Trump’s Transportation Sec. Elaine Chao, wife of Majority Leader Sen. Mitch McConnell, is scheduled to visit northern Kentucky to highlight infrastructure investments in the area.