Hogsback on Trump

HOGSBACK is hoping Australia’s political leaders have more success in preserving the country’s coal industry than Donald Trump has had in the US.
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Scott Morrison is no Donald Trump, even if he does play from the same populist playbook.

As election fever takes hold in the US and a reinvigorated Trump seeks a second term after overcoming the coronavirus, it is worth looking at his record in supporting coal and perhaps learning a few lessons. 

After promising to end the war on coal in the lead up to the 2016 election, Trump has overseen a drop in the share of power generated from coal in the US from 31% to 20%, while coal production is down 34%.

Also, some 5000 coal miners - or nearly 10% of the workforce - have lost their jobs while Trump has been president, according to Bloomberg.

If the coal industry declined so rapidly under a president who claimed to be coal-friendly, imagine how it would fare under Joe Biden, who is openly pro-renewables and no friend of the coal industry despite many former Democrat voters living in the coal producing states in the Appalachians.  

Hogsback is concerned about the Australian coal industry because what happens in the US is inevitably copied by the rest of the world.

Already we are seeing Peabody Energy - which operates in both the US and Australia - struggling at both a financial and an operational level as it hits US regulatory roadblocks that prevented it from merging with Arch Coal and being a more cost competitive producer.

Peabody has its own problems in Australia as it seeks a way of selling off its North Goonyella mine after an underground fire caused production to cease at its flagship Australian longwall mine. 

When US coal giants like Peabody come in and out of chapter 11 bankruptcy it is not encouraging.

That is why the Australian government should be applauded for recognising the need for coal-fired power in New South Wales, which is the strategic hub of the grid on the eastern seaboard.

Delta Electricity's Vales Point coal-fired power station in NSW will receive an upgrade as part of its share of the federal government's $134.7 million power grid fund announced in this year's budget.

The federal government is still negotiating the cost with its owners Trevor St Baker and Brian Flannery as it seeks to extend the life of its existing coal-fired power fleet.

The budget document said "[the upgrades are designed] to reduce emissions, improve reliability and provide additional dispatchable generation in New South Wales".

Scott Morrison is no Donald Trump, even if he does play from the same populist playbook.

Hogsback is hoping he will be prepared to back up the pro-coal rhetoric with real measures of support that ensure the coal industry continues to thrive and spur economic growth for the nation.