In Arizona, Trump’s promise to save coal jobs is colliding with reality

It was May 2016 in West Virginia coal country. Amid a deafening roar of support, Donald Trump, his energy palpable, donned a coal miner’s hard hat and gesticulated shoveling the combustible blackish rock that has epitomized the rise and fall of blue collar jobs all throughout America. He had just become the presumptive Republican presidential nominee, and he was eager to proclaim a new era, a Great America, beginning with the restoration of coal jobs to their rightful place in U.S. manufacturing.

“For those miners, get ready because you’re going to be working your asses off,” he promised.

He reiterated that vow during his speech to a joint session of Congress on February 28, telling the American people that dying industries “will come roaring back to life.”

But that promise is colliding — and fast — into a wall of economic reality in Arizona, a state that delivered to him its 11 electoral votes last November, but which is now poised to lose its biggest coal plant.

The decision to close the Navajo Generating Station, a coal-powered plant near Page, Arizona has become the first real test of Trump’s promise to save coal jobs.

On February 13, owners of the Navajo Generating Station voted to decommission the plant by the end of 2019, concluding is too expensive to continue operating. The closure would impact 430 workers directly and an additional 325 employees at Peabody’s Kayenta Mine, which supplies coal to the plant.

Salt River Project, the plant’s operator, said that decision came after realizing the “rapidly changing economics of the energy industry, which has seen natural gas prices sink to record lows and become a viable long-term and economical alternative to coal power.”

“SRP has an obligation to provide low-cost service to our more than 1 million customers and the higher cost of operating NGS would be borne by our customers,” Mike Hummel, deputy general manager of SRP, the plant’s operator, said in a news release.

In an email to the Arizona Capitol Times, SRP spokesman Scott Harelson said moving forward, the energy from NGS will most likely be replaced with “natural gas-fired generation” provided by existing wholesale market supply and new power plants.

The Navajo Nation and SRP are in the middle of negotiations to keep the plant open at least until 2019.

Harelson said the decision to operate the plant for another two years is meant to provide additional time for NGS’ stakeholders to prepare for the change.

“This enables the Navajo Nation or others to seek others to consider operating NGS after 2019,” Harelson said.

Russell Begaye, President of Navajo Nation, has hunkered down to try to keep the plant open.

Mihio Manus, communications director for the president and vice president of the Navajo Nation, said Begaye is lobbying in Washington, D.C. and has met with Trump administration officials in an effort to keep NGS in operation past 2019.

More specifically, Begaye wants to keep the plant operating until 2030 or even 2044. Begaye has also met with several Arizona officials, including U.S. Sen. John McCain.

Manus said Begaye has articulated to officials that “keeping the operation open is in line with Trump’s wishes to support the coal industry.”

“The intent of the Navajo Nation, at this point, is to see the continued operation of NGS,” he said, adding that he is hopeful the ongoing negotiations would work out and that the plant would survive.

But while some are optimistic that Trump will follow through on his campaign promise, others are not so quick to jump onboard.

Indeed, it will difficult for the president to stimulate growth in an industry that has seen better days.

According to a report released in 2016 by the U.S. Energy Information Administration, coal production, which has been declining, reached its lowest point last year since 1981. In recent years, the coal industry has suffered multiple bankruptcies. Many attributed dwindling coal production to new environmental regulations, changing market economics, and automation.

Sen. Bob Worsley, a Republican from Mesa and the founder of a land, mineral and energy development company called NZ Legacy, said it is unfortunate that the power plant is shutting down. However, he did not seem surprised by it.

“It’s indicative of how natural gas prices, forecasted for the next 20-30 years to be low, will likely make coal plants uneconomic,” Worsley said.

Worsley himself is no stranger to the effects of cheap natural gas. One of his own coal-fired power plants had shut down, and he has low hopes it will ever open again.

As for Trump’s promise to revive the coal industry, Worsley is skeptical that the president understands the nuances and factors influencing the energy industry.

“I think that when President Trump was making those promises… (he) was probably under the impression that our EPA regulations were onerous and burdensome and killing the coal businesses,” Worsley said. “I’m not sure that anyone ever explained to him the market forces that would force the coal plants to close, and that’s what’s happening at Navajo Generating Station.”

To the senator, it boils down to energy prices.

The challenge, he said, is to extract energy from coal in a way that’s clean and also competitively priced compared to natural gas.

“There’s no technology right now that’s economical to do that,” Worsley said.