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A bounce in US coal production won't help many coal country Trump voters

Schuylkill County, Pennsylvania coal mine operator Ettore DiCasimirro runs one of the few surviving mines in the area, once a prosperous coal region.
Andrew Lichtenstein | Corbis | Getty Images
Schuylkill County, Pennsylvania coal mine operator Ettore DiCasimirro runs one of the few surviving mines in the area, once a prosperous coal region.

U.S. coal production is forecast to rise slightly in the first two years of Donald Trump's presidency, but many Trump voters in coal country will not see job gains.

In fact, the Appalachian region — which Trump carried handily — could lose more than 1,000 coal mining jobs in the next two years, according to one analysis. Meanwhile, a small part of Wyoming is likely to reap most of the labor gains.

Failure to stem the bleeding in coal country could be a liability for Trump. The president has vowed to put miners back to work, but has not presented a plan B in case his policies — which focus on killing regulations — cannot counter the market forces behind U.S. coal's long, steady decline.

One of those forces is surging supplies of cheap, cleaner-burning natural gas, which has eaten into coal's market share.

With natural gas prices on the rise, the Energy Information Administration expects coal-fired plants to claw back some share of electricity generation in 2017 and 2018. As a result, the EIA projects an uptick in U.S. coal production.

That's where the other market force comes in. Cheap and easily accessible Wyoming coal has displaced supplies from other mineral-rich states. That includes West Virginia and Kentucky, where Trump took 69 percent and 62.5 percent of the vote, respectively.

EIA expects coal production in Appalachia to fall from 183 million short tons in 2016 to 177 million short tons in the next two years.

That may translate to a decline of as many as 1,100 coal jobs in the region, according to an analysis performed for CNBC by Robert Godby, director of the Center for Energy Economics and Public Policy at the University of Wyoming.

Godby arrived at the estimate by crunching the EIA's production forecasts, average productivity per work hour and a 2,000-hour work year.

There is some evidence the pain would be spread across the region, since Appalachian states have roughly equivalent productivity rates and saw similar output declines in 2015.

Wyoming, where 70 percent of voters picked Trump, is likely to benefit most from the production bump. EIA projects coal output in the Mountain region will rise by 36 million short tons in the next two years.

That increase is almost certain to occur mostly in Wyoming's Powder River Basin, Godby said. That could create about 600 new jobs, based on the region's productivity rates.

Productivity is relatively low in Appalachia, where workers in small underground mines cannot achieve the massive economies of scale possible in the Powder River Basin. There, machines strip coal from vast beds just below the surface — making the region's coal much cheaper.

"Productivity is a direct result of technology. If you give a worker a shovel, they can't produce as much as if you give them a steam shovel," Godby said.