Expectations rising for another effort to aid coal

Source: By Josh Siegel, Washington Examiner • Posted: Wednesday, October 30, 2019

 President Trump couldn’t save his ally and donor Bob Murray from seeking bankruptcy protection for his coal mining giant, Murray Energy, but the administration may not be done throwing lifelines to the flailing industry.

“With the 2020 reelection coming up, President Trump is likely sensitive to media reports that he has not done enough to revive coal especially with the Murray Energy bankruptcy,” Dan Eberhart, CEO of the oil services firm Canary and a Trump donor, told Josh.

Trump has succeeded in weakening regulations of coal producers, many coming after prodding from Murray, but he has not been able to find a legally viable path to subsidize demand for coal.

“It is a lot easier for Trump to deregulate supply than to stimulate coal demand,” ClearView Energy managing director Kevin Book told Josh.

While coal constituents may see the industry’s demise as outside Trump’s control, analysts say the president could fear losing support if he’s seen as not delivering on his promises to revive steel and coal country.

“The political mandate is the same,” Book said. “Let’s remember this is an administration willing to extend the limits of executive authority. Do we think there will be another bite of the apple? We do. Will it be easy? No.”

Where we left off: Last year, the Energy Department was considering using two federal laws focused on emergencies and wartime needs to save the lives of coal and nuclear power plants set to retire soon. However, it reportedly shelved those plans due to legal concerns about the Federal Power Act and the Defense Production Act being used to address economic, rather than national security, problems.

Reasons to be wary: While Book says executive options “remain open,” he’s skeptical they could survive litigation, especially when Trump has stacked federal courts with conservative judges who have a narrow view of the law.

“If the White House and DOE take a broad view of existing law, those agencies are going to be facing down the judges he appointed, and it might be harder to win,” Book said.

Some administration allies are skeptical Trump will act, for practical and political reasons.

“I suspect that President Trump’s standing in coal country is still rock solid,” said Tom Pyle, president of the free-market American Energy Alliance and Trump’s former Energy Department transition chief. “I don’t think the administration will be inclined to revive any attempts at a direct federal intervention. The same questions — especially how the assistance would be provided — still have not been answered.”

The FERC option: Trump’s most realistic option might come from the Federal Energy Regulatory Commission, which rejected the administration’s original bid to subsidize coal and nuclear plants, but is considering ways to ensure the “resilience” of the transitioning electric grid that might be favorable to coal.

FERC watchers are eyeing next week’s confirmation hearing for James Danly, before the Senate Energy committee, whose seat would give the GOP a 3-1 majority on the commission.

The fact that the White House nominated another Republican commissioner without pairing a Democrat is a signal the Trump administration is “eager to have a FERC that takes action on this,” a source close to the coal industry told Abby.

FERC Chairman Neil Chatterjee, a Republican, recently said he wants the commission to come up with a unanimous definition of resilience, which would allow grid operators and the markets to more “appropriately” value the attributes of coal, such as fuel security, supporters say.

If FERC helps “provide some guardrails,” it could give grid operators like PJM and MISO the opening to take some action to save plants from shutting down, the source added.

Michelle Bloodworth, president and CEO of the American Coalition for Clean Coal Electricity, views FERC action as the best recourse.

“More remains to be done to ensure we have a regulatory and market environment that properly values the role of the coal fleet in ensuring we have a reliable, resilient and affordable electric grid,” she told Josh.