The coal industry in the US has been on a decline for many years. With hundreds of miners closures thousands of mining jobs have disappeared. Just a few years ago some of the coal mining firms filed for bankruptcy as the demand for coal plunged.

President-elect Donald Trump has promised to revive the coal industry and in the process bring back thousands of those lost mining jobs. So many poor former miners in places like the Appalachia such as West Virginia have given their vote to Mr.Trump. Below is one of the photos from a rally in Wilkes-Barre in Pennsylvania:

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To fulfill this promise Trump’s policies have to overcome a multitude of challenges facing the industry. To begin with the demand for US coal has declined because most utilities have shutdown coal burning power plants and switched to cheaper options like natural gas. Hence in order to first create demand massive capital is needed for utilities to re-open those coal power plants. Until that happens mines are not going to open simply to give jobs to miners.

From a recent article in the WSJ:

Donald Trump campaigned on a promise to resurrect the ailing U.S. coal industry and put miners back to work. Delivering on that vow could prove nearly impossible.

Electric utilities that buy more than 95% of the coal mined in America have already retired hundreds of their coal-burning power plants from Colorado to Connecticut—amounting to about a third of the total capacity—and have plans to mothball even more.

While in Appalachia earlier this year, Mr. Trump pledged to “bring the coal industry back, 100%” by rolling back environmental regulations. But coal’s biggest problem is that it is no longer the cheapest fossil fuel around. It is being displaced by natural gas.

American Electric Power Co. of Columbus, Ohio, one of the nation’s biggest utility companies, has sold or retired half its fleet of coal-burning power plants in recent years. No matter who occupies the White House, “it’s not coming back,” said Nick Akins, AEP’s chief executive.

Even if Mr. Trump makes good on his campaign promise to relax or repeal pending limits on carbon emissions, it won’t be enough to restore coal’s market share. “We’re moving to a cleaner-energy economy and we’re still getting pressure from investors to reduce carbon emissions,” Mr. Akins said. “I don’t see that changing.”

Source: Cheap Gas Tests Trump’s Promise to Revive Coal by Rebecca Smith, WSJ, Nov 13, 2016

Below is an infographic showing the current state of the US coal industry:

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Source: What Shape Is U.S. Coal In?, WSJ

Another important factor is that coal as a source of energy decreased from 49% from 2006 to 33% in 2015. In addition to better and cheaper alternative fuel sources, utilities also face stiff opposition to operating highly polluting coal power plants. So even if those plants are brought back to service, the society’s perception on coal has to change. This is the most difficult of all the challenges.

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Source: Is Nuclear Power Vital to Hitting CO2 Emissions Targets?,  WSJ

The top five coal producers are: Peabody Energy Corporation which trades on the OTC market under the ticker (BTUUQ),  Arch Coal, Inc (ARCH), Cloud Peak Energy Inc (CLD), Alpha Natural Resources, Inc (ANR) and Murray Energy. The complete list of coal stocks on the NYSE can be found here.

It remains to be seen if the US coal industry recovers with Trump in office and if the miners that voted for him are able to get their mining jobs back.

Disclosure: No Positions

Readers may also want to checkout:

• A Bleak Outlook for Trump’s Promises to Coal Miners, NY Times

A recent article in the NYTimes noted that traffic fatalities in the US reached the highest in 50 years as more drivers are distracted with smartphone apps. From the article:

The messaging app Snapchat allows motorists to post photos that record the speed of the vehicle. The navigation app Waze rewards drivers with points when they report traffic jams and accidents. Even the game Pokémon Go has drivers searching for virtual creatures on the nation’s highways.

When distracted driving entered the national consciousness a decade ago, the problem was mainly people who made calls or sent texts from their cellphones. The solution then was to introduce new technologies to keep drivers’ hands on the wheel. Innovations since then — car Wi-Fi and a host of new apps — have led to a boom in internet use in vehicles that safety experts say is contributing to a surge in highway deaths.

After steady declines over the last four decades, highway fatalities last year recorded the largest annual percentage increase in 50 years. And the numbers so far this year are even worse. In the first six months of 2016, highway deaths jumped 10.4 percent, to 17,775, from the comparable period of 2015, according to the National Highway Traffic Safety Administration.

“This is a crisis that needs to be addressed now,” Mark R. Rosekind, the head of the agency, said in an interview.

Source: Biggest Spike in Traffic Deaths in 50 Years? Blame Apps by Neal Boudette, Nov 15 2016, NY Times

Globally about 1.2 million people die each year due to road accidents. Some of the countries with lowest road death rates per 100,000 inhabitants are Iceland, Sweden, the UK, Norway and Switzerland while countries like South Africa have some of the highest death rates according to OECD data. Incidentally the U.S. has the highest road deaths among developed countries as shown in the chart below:

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Source: Road death challenge, OECD Observer

Even before the popularity of apps and internet connectivity in cars, many American drivers were bad drivers than European drivers. Though speed limits are much higher in Europe, drivers there tend to drive more safely and drive better cars. In the US, many drive bigger cars and SUVs that look like military tanks on the road but that does not mean necessarily they are safe drivers.

The exponential rise of globalization in the past few decades has created winners and losers. Some of the losers are workers in the developed countries.Winners include corporations, capitalists, farmers, etc, in these countries. In addition, one of the biggest beneficiaries of globalization is the millions of workers in developing countries.

As the middle-class workers in the rich countries saw their jobs disappear and wealth accumulate in the hands of a few, they are revolting against the elite. Brexit in UK and the Trump victory in the US are two outcomes of the public’s rejection of the status quo. An article in Der Spiegel published yesterday discusses the impact of globalization in detail. From the article:

End of Globalization?

Now, though, those who have lost out are striking back, first in Britain and now in the US. And Italy and France could soon join them.

It is a fact that globalization and free trade have increased global prosperity, but they have also increased inequality in the world’s wealthiest nations. They have made the biggest companies more powerful, because business operates globally while politics tends to be a local or regional affair, and made the world more vulnerable to crises, because everything is networked and the debts of American homeowners could lead the entire world to the brink of collapse.

 

In short, globalization is responsible for a host of problems that would otherwise not exist. And it is therefore in the process of gambling away the trust of people around the world. Already today, global trade growth has slowed and state interference is on the rise.

The world finds itself at a turning point. It must try to eliminate the drawbacks of globalization without destroying its advantages. If, on the other hand, protectionism and populism gain the upper hand, there is a danger that global prosperity could shrink. The age of globalization would be at an end.

Source: A Turning Point for Globalization – Inequality, Market Chaos and Angry Voters, Der Spiegel

The entire article is worth a read.

Readers may also want to checkout After Trump’s victory China is the main strategic pillar for globalisation by Prof. John Ross of Renmin University of China.

The key takeaway is globalization is in itself not bad. But when the benefits of globalization does not reach everyone especially the workers then they will turn against the system that was meant to raise their living standards.

The US National Park Service (NPS) celebrated its 100th year anniversary on August 25, 2016. The creation of the great park system has been called  called “the best idea we ever had.” by the famous writer and environmentalist Wallace Stegner. Below is a neat infographics on the parks from the WSJ:

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Source: How Economical Are Our National Parks?, WSJ, Aug 26, 2016

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Lake McDonald in Glacier National Park

Source: NPS

The National Park Service has a special web page dedicated to the celebration of the centennial which can be found here.

The Great Smoky Mountains national park receives the largest number of visitors in a year. I think this is because of the entertainment-related attractions like amusement parks that lie just outside the park.