Trump’s plan to use a Cold War-era law to bolster the coal industry, explained

Source: By Philip Bump, Washington Post • Posted: Monday, June 4, 2018

A man holds up a “Trump Digs Coal” sign as the president speaks during a rally in Huntington, W.Va. (Photo by Justin Merriman/Getty Images)

At the outset of the Korean War in 1950, President Harry S. Truman realized that the country needed to mobilize quickly to respond to the invasion of South Korea. After World War II, the massive military apparatus that had been constructed to beat the Nazis and Imperial Japan was being dismantled as Truman emphasized the nation’s nuclear arsenal at the expense of conventional weapons.

When war broke out in Korea, Truman needed to reverse those trends and asked Congress for a law giving him the power to prioritize national defense over civilian needs. Congress passed and he signed the Defense Production Act that September. (The history above comes from the Congressional Research Service’s 2009 overviewof the law.)

In 2018, as the Korean War appears to be closer to a final resolution than at any point in history, President Trump plans to use the Defense Production Act for a different sort of conflict: Winning the “war on coal.”

Why the coal industry is in trouble

Over the past decade, two things have happened that have put pressure on the coal industry. The first is an intense new focus on the problem of climate change. The second is the expansion of fracking.

With global temperatures continuing to set new annual records — five of the hottest years on record have occurred since 2010 — the urgency of combating climate change has increased substantially. Al Gore’s 2006 film “An Inconvenient Truth” put a new emphasis on the issue in American politics, highlighting the connection between burning fossil fuels like coal and oil and the greenhouse gasses that trap heat in the atmosphere. That emphasis, though, quickly led to pushback from a fossil-fuel industry and conservatives worried about the economic effects of instituting new controls on greenhouse gas emissions.

A major source of greenhouse gas emissions in the U.S. is the burning of coal for electricity. When President Barack Obama was inaugurated in 2009, he slowly began to turn his attention to figuring out a balance between transitioning away from fossil-fuel use and toward new controls on greenhouse gas emissions or renewable and nonpolluting forms of electricity production.

At the same time, the process of hydraulic fracturing, or fracking, suddenly became viable for extracting oil and natural gas from underground shale formations. The result was a surge in the amount of natural gas available in the United States — a fossil fuel that produces far fewer emissions when burned than coal. That combination of lower cost and cleaner burning (though not necessarily cleaner in the extraction process) led to a number of coal-burning facilities switching to gas.

A decade ago, about half of electricity production in the U.S. came from burning coal. Now, it’s regularly the case that more electricity comes from burning natural gas. In March, only a little over a quarter of electricity that was produced came from burning coal.

If the amount of electricity were increasing dramatically, that percentage decline wouldn’t be a big deal. But it’s not. The amount of coal being used each month to produce electricity has fallen by more than a third over the past 10 years, a drop that’s had a significant effect on the coal industry.

Why Trump is focused on coal

Obama’s focus on cleaner sources of energy and new EPA regulations aimed at reducing other emissions were framed as an unfair “war on coal.” Coal became part of the cultural debate over climate change and, therefore, a central part of partisan politics.

Trump seized on this during his 2016 campaign, in part because he recognized the metaphorical value of the coal miner as a profession. Blue-collar workers who are part of an industry that’s struggling in the face of new regulations? That’s a perfect community for Trump’s “make America great again” mantra.

Never mind that the number of people working in coal mining fell from 175,000 in 1985 to 70,000 by 2003: Coal miners were a perfect symbol for Trump’s agenda, and one that he embraced. As our Steven Mufson notes, the industry embraced him right back. In 2016, the coal industry gave Trump twice as much as any other candidate for office.

Outside observers have been skeptical about Trump’s promise to revive the coal industry, given the combination of cultural and market forces that are weighing against it. Enter the Defense Production Act.

Trump at an event in West Virginia in 2016. (Animation from CNN video)

What Trump plans to do

On Friday, Bloomberg broke the story that Trump would use the Defense Production Act and another law, the Federal Power Act, to mandate that certain coal and nuclear facilities remain open.

“The Department [of Energy] is exercising its DPA and FPA authority by directing System Operators (as defined in the Directive),” a draft plan reads, “for a period of twenty-four (24) months, to purchase or arrange the purchase of electric energy or electric generation capacity from a designated list of Subject Generation Facilities (SGFs) sufficient to forestall any further actions toward retirement, decommissioning, or deactivation of such facilities during the pendency of DOE’s Order.”

That’s not a terribly self-explanatory paragraph, so let us explain. This plan would mandate that electricity distributors (system operators) buy enough power from certain facilities to make sure that those facilities can remain open. It’s a bit like having a failing grocery store in your neighborhood and the government mandating that everyone do enough of their shopping there to keep the place from shutting down.

How is this warranted, you might ask? Because, the document suggests, it’s critical that the electric infrastructure remain operating and “growing threats of multi-point attacks, including cyberattacks, or other disruptions to the energy sector” put access to electricity at risk. Coal and nuclear facilities maintain stockpiles of fuel on-site. If a natural gas pipeline is blown up, the plants it fuels won’t be able to generate electricity. Wind and solar plants are harder to shut down but, as fossil-fuel proponents note, they are reliant on wind and sunlight. (They also make up only a very small percentage of the country’s electricity-generating capacity.)

That’s the national security argument being made. (In the case of nuclear, the draft plan also argues that the private-sector nuclear industry is necessary for its nuclear weapon and propulsion systems — an interesting twist to Truman’s problem in 1950.) Until there’s a plan to keep those plants open over the long term, support for them will be mandated. And that, it’s safe to assume, will help keep the decline in coal use from declining further.

A proposal to bolster the industry in unorthodox ways, in fact, was given to Energy Secretary Rick Perry in March of last year by Charles Murray, head of the coal company Murray Energy.

Why this is ironic

Renewable energy and natural gas providers released a joint statement condemningthe proposal, for perhaps obvious reasons. But it’s worth noting just how at odds with Trump’s own past rhetoric the move actually is.

For years, angry about a proposed wind farm off the coast of his golf course in Scotland, Trump railed against the wind industry, condemning wind turbines as dangerous (to both birds and humans) and a waste of taxpayer money. Wind energy, like other forms of energy, is often subsidized to encourage use — giving Trump (and other opponents) a point of leverage politically.

Trump’s also repeatedly echoed arguments against government intervention in the energy industry. When a green-energy firm called Solyndra failed after having received grants from the Department of Energy, Republicans — and Trump — bashed the administration for the effort to “pick winners and losers” in the industry.

But that was pre-Trump-as-politician. Now President Trump sees political value in boosting coal mining and has a 60-year-old tool that he believes can help him do it.