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Donald Trump has vowed to resuscitate the U.S. coal industry and unlock the energy sector's potential by paring back restrictions and ending the nation's commitments to international efforts to battle climate change.
"A Trump administration will end this war on the American worker and unleash an energy revolution that will bring vast new wealth to our country," Trump said Monday during a speech outlining his economic policy.
But the campaign's proposals and promises say little about the fundamental market forces that have sent oil prices spiraling in the last two years and reduced U.S. dependence on coal for its electricity needs.
For example, Trump's campaign says he would "save the coal industry and other industries threatened by Hillary Clinton's extremist agenda. "
But the coal industry actually needs to be saved from another threat: natural gas. More specifically, it needs to be rescued from the natural gas boom made possible by horizontal drilling and hydraulic fracturing — "fracking" — the process of freeing oil and gas from underground shale rock formations by pummeling them with a mix of water, minerals, and chemicals.
The Energy Information Administration forecasts that 2016 will be the first year that cheaper natural gas-fired power generation will exceed coal generation in the United States. EIA says the demise of coal — and rise of natural gas — is "mainly a market-driven response to lower natural gas prices that have made natural gas generation more economically attractive."
The EIA does, however, ascribe part of the effect of coal-fired power plant retirements to the EPA's Mercury and Air Toxics Standards regulations.
Trump also says he would "lift restrictions on American energy, which will increase GDP annually by $100 billion, create 500,000 new jobs and increase wages by over $30 billion over the next seven years. "
Those figures, he said in his speech in Detroit, come from the Energy Research Institute, a nonprofit affiliated with the Koch Brothers, GOP backers whose Koch Industries are heavily invested in the energy industry, according to SourceWatch.
"The Obama-Clinton administration has blocked and destroyed millions of jobs through their anti-energy regulations while raising the price of electricity for both families and businesses," Trump said Monday.
Electricity prices have increased by a little more than 1 cent per kilowatt hour during President Barack Obama's tenure through 2015, according to the Energy Information Administration. Costs are flat for industrial consumers, and up by less than 1 cent per kilowatt hour for commercial users.
Further, employment growth in the U.S. energy patch grew steadily during the shale oil and gas revolution, despite regulations on the industry. Total U.S. employment in the oil and gas extraction, drilling and support services sectors amounted to over 644,000 jobs at the end of 2014, more than doubling over a 10-year period, according to CNBC analysis of Bureau of Labor Statistics data.
Since the oil price downturn began in the second half of 2014, more than 291,500 energy jobs have been lost worldwide, estimates recruitment agency Airswift.
Goldman Sachs estimates that U.S. drillers will need to hire 80,000 to 100,000 workers by the end of 2018 to operate the rigs the bank forecasts will be operating at that time. But recruiters warn that many of those oil workers have left the industry for good, and with U.S. unemployment hovering at 4.9 percent, it could be hard to draw them back.
Few analysts see oil prices returning to their highs above $100, and some make the point that more oil production would actually make matters worse for U.S. drillers in the medium term. John Kilduff, founding partner at energy hedge fund Again Capital, told CNBC the Obama administration may have done drillers a favor by holding back some drilling on federal land.
"Clinton not only embraces President Obama's job-killing energy restrictions, but wants to expand them, including going after oil and natural gas production that employs some 10 million Americans," Trump said.
Clinton indeed aims to reduce U.S. oil consumption by a third by 2027 by adopting cleaner fuels and making vehicles, ships and boilers more efficient. However, she has called natural gas a "bridge" to cleaner fuels and as secretary of state, advocated exporting U.S. fracking capability overseas to help reduce Europe's dependence on Russian natural gas.
As for his claim that the oil and gas production employs 10 million Americans, that figure is roughly 10 times the number of workers employed in the oil and gas extraction, drilling and support services sectors, according to Bureau of Labor Statistics data.
In any case, it would appear that saving the coal industry and putting oil and gas workers back to work are irreconcilable projects, since gains by natural gas cut into coal's share of the market.
Trump also said he would invite TransCanada to renew its permit application for the Keystone XL Pipeline, a project that has divided Republicans, who generally support it, and Democrats, who typically oppose it.
Despite falling oil prices, TransCanada says on its website it "remains committed to building the Keystone XL Pipeline." After Obama denied the project a permit, TransCanada challenged the decision under NAFTA rules.
But as far back as 2014, experts were saying the math no longer makes sense for the project, which would carry heavy oil extracted from sand in Alberta, Canada, to Nebraska and then onto the Gulf Coast. That's because such crude oil is some of the most expensive to produce, and in an era of low oil prices, its breakeven is far above the cost it now can fetch.