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On Tuesday, President Donald Trump enacted a series of executive orders designed to enhance domestic coal production, emphasizing the necessity to address increasing electricity demands driven by artificial intelligence technologies.
At a signing event held at the White House, Trump declared, “We will rapidly expedite leases for coal mining on federal lands and streamline the permitting process. We will also eliminate the government bias against coal, utilizing the expansive powers of the Defense Production Act to significantly boost coal mining in America.”
Across the United States, coal plants are being decommissioned as they lose competitiveness to natural gas and face criticism over their greenhouse gas emissions.
In a conversation with CNBC’s “Money Movers” earlier on Tuesday, Energy Secretary Chris Wright emphasized the urgency of maintaining coal plants, stating, “If we intend to substantially increase America’s electricity production over the next five to ten years, we must halt the closure of coal plants.” Wright, who founded Liberty Energy in 2011, indicated that the current administration aims for a 25% expansion in electricity output. “To achieve this, we need to rely on all dependable, economical, and secure power sources, with coal being a key player,” he added.
In response to the president’s announcement, coal company stocks experienced a notable rise. Peabody Energy saw an increase of 9.2%, Core Natural Resources rose by approximately 6.6%, and Ramaco Resources climbed by 13.9%.Â
Earlier this year, during the World Economic Forum in Davos, Switzerland, Trump mentioned his intention to utilize emergency powers to facilitate the establishment of power plants for data centers, suggesting that coal could serve as a backup energy source.
However, the potential shift to coal as a fuel source for data centers remains uncertain due to environmental concerns. The Energy Information Administration (EIA) notes that coal produces higher carbon dioxide emissions than natural gas. The technology sector, which is increasingly spearheading the construction of AI data centers, has shown a preference for renewable energy sources and is progressively investing in nuclear energy to achieve its sustainability objectives.
According to the EIA, roughly 16% of U.S. electricity generation in 2023 stemmed from coal, a significant decrease from 51% in 2001. The shale boom has enabled natural gas to take a larger share of the energy market over the past 25 years.
Looking ahead, electricity providers in the U.S. are projected to retire approximately 8 gigawatts of coal-fired capacity in 2025, amounting to almost 5% of the operational coal fleet in 2024, as reported by the EIA. The coal production output in 2023 was less than half of what it was in 2008, according to agency data.
The largest electricity grid operator in the country, PJM Interconnection, has expressed concerns regarding its capacity to meet electricity demand in light of the planned retirements, which predominantly include coal plants.
Correction: This article has been updated to accurately reference the Energy Information Administration.
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