President Donald Trump declared a national energy emergency to boost fossil fuel power generation amid surging load demands on the grid via the 'Powering Up America' theme, including AI data centers, electrification of the economy, and re-shoring trends. The move by Trump underscores a massive policy shift from the Biden-Harris regime's 'green' policies that only acted as a 'throttle' on the economy, making US companies less competitive globally. Meanwhile, China ramped up cheap energy via an explosion in coal-fired power production.
"They can fuel it with anything they want, and they may have coal as a backup — good, clean coal," Trump said in a virtual appearance at Thursday's annual World Economic Forum in Davos, Switzerland.
Trump said that if critical infrastructure, such as natural gas and oil pipelines, gets "blown up," coal could be used as a critical backup energy source.
He noted, "We have more coal than anybody," adding, "We have more oil and gas than anybody."
Trump is correct.
The US is the world's largest producer of oil and NatGas. Although it holds the largest coal reserves globally, it ranks fourth-largest coal producer, behind China, India, and Indonesia.
With Trump pausing the war on fossil fuels, the urgent need to ramp up power production through NatGas and coal will likely become a reality. This move aims to ensure a more stable transition to a clean energy future, including nuclear, while hopefully lowering energy bills for Americans after Biden-Harris' reckless green policies drove power prices sky-high.
Trump's comments on coal sent shares of Peabody Energy, the top US coal miner, surging as much as 7.6% last Thursday—the largest intraday gain since right after the November presidential election.
Will Trump's comments produce a price floor in the low $18 handle, similar to the price action in 2023?
Meanwhile, the Russell 3000 Coal Subsector Index climbed 4.2%.
"Trump's support for fossil fuels is well known, but coal didn't receive as much attention during this campaign as it did in prior elections," Bloomberg's Will Wade pointed out in a note.
Meanwhile, Bloomberg Javier Blas doesn't believe in coal's revival: "Respectfully, I disagree. In the US we know that ultra cheap shale gas has eviscerated the economics of coal-fired power plants. In America, the biggest enemy of coal is gas."
With a quarter of US coal power plants set for retirement by 2040, the question arises whether Trump's push for stable and low-cost fossil fuel power generation will include a revival of coal. Ensuring cheap power for the transition to clean nuclear power is critical for the US and maintaining competitiveness with China in global markets.