OREANDA-NEWS. December 29, 2016. President-elect Donald Trump's plans to rescue the US coal industry by overturning federal regulations could be complicated by a slow moving federal system and market forces out of his control.

Trump's surprise victory in November galvanized coal producers as he promised to pursue an "America first" energy policy and roll back "job-killing" regulations.

His selection of nominees to key cabinet posts has reinforced the hopes of an industry that has seen employment levels fall by more than 34pc since 2011, from 86,000 coal miners in April 2011 to 56,600 coal miners in April 2016, according to the US Bureau of Labor Statistics. Scott Pruitt, Trump's pick to run the Environmental Protection Agency, fought as Oklahoma attorney general the Clean Power Plan (CPP), which would force power plants to limit CO2 emissions.

But other nominees including secretary of State nominee Rex Tillerson, chief executive of Exxon Mobil, have a history of supporting natural gas. Even if Trump is successful in rolling back federal regulations, coal could still struggle in the face of low prices for competing fuels.

The president-elect and members of Congress have a handful of tools they could use in striking down the CPP, critics of the regulation say. These include issuing an executive order condemning the rule and directing EPA to not enforce or implement it, issuing a new rule and pursuing legislation to repeal parts of the Clean Air Act that gave rise to the rule in the first place, all measures endorsed in a 14 December letter to Trump, vice president-elect Mike Pence, Speaker of the House Paul Ryan and Senate Majority leader Mitch McConnell by a coalition of 24 states opposing the plan.

Coal advocates say the CPP adds pressure on an industry that is starting to emerge from market turmoil that forced large producers like Peabody Energy and Arch Coal into bankruptcy protection. The US Energy Information Administration (EIA) has estimated that the plan would result in a 26pc or 230mn st decline in coal production from 2015 through 2040. Without the plan, EIA projected coal production would remain relatively flat through 2040.

But while Pruitt joined a lawsuit to block the CPP, his power as head of EPA to end it may be limited. Federal ethics rules barring parties from changing sides in litigation could complicate Pruitt's involvement, said Natural Resources Defense Council's (NRDC) climate and clean air program director David Doniger.

In addition, it would be illegal for a president to issue an executive order "commanding the outcome" of an agency's rulemaking process and environmental groups would challenge such a directive in court, Doniger said.

Finally, replacing the rule would be time-consuming. It took President Barack Obama's administration more than seven years to replace changes to the stream protection rule that were implemented shortly before former president George Bush left office, as the Interior Department commissioned new studies to re-craft regulations and support their changes.

The stream rule is another measure that the Trump administration is likely to target. Opponents could have an easier path to reversing that rule. McConnell already has vowed to use a resolution under the Congressional Review Act to block the rule, which was released on 19 December. Such action requires only a simple majority vote by Congress 60 days after a rule is finalized.

With Trump in the White House and Republicans retaining control of the House and Senate, a resolution of disapproval may easily pass.

Critics of the stream rule changes have said the revisions could be as or more costly than the Clean Power Plan is. The National Mining Association has estimated that the revisions could block access to 63pc of known coal reserves. Interior has said the plan would only reduce US coal production by an average 0.08pc/yr — or 700,000 short tons/yr (635,040 metric tonnes/yr) from 2020-40 — and that general market conditions as well as regulations already are working against the industry.

Trump also can easily reverse President Barack Obama's January executive order halting new federal coal leases for three years, and he is widely expected to do so. His pick for Interior secretary, representative Ryan Zinke (R-Montana), has similarly called for an end to the moratorium.

But it is not clear whether ending the moratorium would have much effect on the coal industry given price volatility and declines in demand in recent years. The same could be said for blocking the CPP, which is more likely to save some power plants from retirement rather than encourage new construction.

The recent US shale boom flooded the market with inexpensive natural gas that took market share from coal. In 2010, 44.8pc of US electricity generation came from coal and 23.9pc from natural gas. By 2015, coal's share of the fuel mix had fallen to 33.2pc and natural gas' had risen to 32.7pc.

Trump and congressional Republicans have expressed support for "clean coal" initiatives, including extending and expanding tax incentives for carbon capture and sequestration (CCS) technology. Some in the industry are hoping reinvigorated efforts by the government to fund CCS projects will help revive development.

Trump's pick for energy secretary, former Texas governor Rick Perry, supported some initiatives to build CCS in the state.

But the president-elect's vague mentions do little to inspire confidence in a technology that has failed to gain traction as an option for commercial-scale coal-fired generation.

In addition, Trump already is showing conflicting signs on some of the strong pronouncements he made during his campaign, particularly on one that would force the hand on CCS development for coal generation. After as a candidate threatening to "cancel" the Paris agreement, Trump is now saying he is "studying" it.

If the Paris accord and other federal carbon regulations are scrapped, proponents of reducing greenhouse gas emissions will likely focus their efforts on state and judicial fronts, where they have had mixed success in recent years.

Whatever policies the new administration pursues in 2017, declining global demand and other market challenges that have weighed on the coal industry likely are here to stay.