Moody's Investors Service on Friday joined a chorus of investment and energy analysts who say President Trump's decision this week to renounce the Clean Power Plan will have little short-term effect on the beleaguered coal industry.
While Trump's decision may moderate the long-term decline of coal, Moody's said, it will have little immediate effect on production of electricity from coal.
"Economics, not regulation, is the prime driver of near-term coal sector distress," the credit-rating agency said in a report.
In the next three to five years, coal will struggle to compete with natural gas and renewable energy on price, Moody's said.
"Most major U.S. coal miners have gone or are going through the Chapter 11 bankruptcy process to restructure balance sheets, close unprofitable mines, and reduce costs," Moody's said. Though Trump's executive order may slow the secular decline of the industry, "we do not expect it to reverse the trend or bring back the idled production."
Moody's also said Trump's decision is long-term negative for the bonds of producers of renewable energy, which "will lose a major regulatory driver of nationwide demand, relying instead on continued cost declines to maintain growth."
Renewable-power producers are still expected to experience robust near-term growth because of generous tax credits that remain on the books.
Moody's assessment joins a consensus outlook that the coal industry is destined for long-term decline.