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Trump's climate change executive order won't change coal's fortunes, Shell chair says

President Donald Trump's effort to roll back Obama-era climate change policies will not do much to improve demand for coal at America's power plants, Royal Dutch Shell Chairman Chad Holliday said Thursday.

Coal's use in U.S. power plants has been falling for years in the face of stiff competition from natural gas. Former President Barack Obama's initiatives to rein in the impacts of climate change have hastened the retirement of old, inefficient coal-fired plants and the switch to cleaner-burning natural gas.

On Tuesday, the Trump administration lifted Obama's moratorium on new coal mining leases on federal land and set in motion the repeal of his landmark Clean Power Plan, a regulation aimed at reducing carbon emissions from smokestacks, particularly at coal-fired facilities.

But Holliday said the fundamental economics of natural gas are "pretty strong" compared with those of coal.

"Where coal can compete, coal should compete, but I think it's going to be a challenging role for them," he told CNBC's "Squawk on the Street" on Thursday.

Coal smoke and steam vapor pour out of a power plant in Shippingport, Pennsylvania.
Getty Images
Coal smoke and steam vapor pour out of a power plant in Shippingport, Pennsylvania.

Shell is among a number of oil majors increasingly focused on producing natural gas and developing liquefied natural gas capacity.

Holliday suggested Trump's effort to kill the Clean Power Plan would not greatly alter utilities' plans for how they will provide power in the future.

"The marketplace looks at the long-term consequences, and rolling back a ruling for a few years, or however long it turns out to be, or until it's replaced with something else — I think companies look at fundamental economics," he said.

Asked whether Trump has opened the door for China or another country to take the lead on climate change, he said he doesn't think the United States has taken a backseat to Beijing.

"I don't see anything that the administration has done that fundamentally changes the direction that our country is headed," he said.

Watch: Cramer on why coal won't be saved