Trump Administration May Use Wartime Act To Help Out Coal Industry

Perry's Department of Energy is reportedly considering the request. Gage Skidmore/ Flickr;CC BY-SA 2.0

Robin Andrews 23 Apr 2018, 23:42

Desperate times call for desperate measures. In the face of the flagging coal industry – whose entire workforce employs fewer people than Arby’s – the federal government is considering using a dusty wartime rule to help it out.

The Defense Production Act of 1950, which dates back to the Korean War, gives the President wide-ranging powers to fiddle with various American industries in order to prioritize them and give them a helping hand one way or another.

“The security of the United States is dependent on the ability of the domestic industrial base to supply materials and services for the national defense and to prepare for and respond to military conflicts, natural or man-caused disasters, or acts of terrorism within the United States,” it reads.

It also refers to the need to restore critical infrastructure under “emergency conditions” and to “respond to actions taken outside of the United States that could result in the reduced supplies of strategic and critical materials, including energy.”

Per ArsTechnica, the last time it was deployed by the White House was back in June to “rectify a shortfall in the space industrial base.”

Now, it’s being reported that the act will be used to keep coal-generating power plants propped up, which are threatened primarily by the ever-increasing cheapness of natural gas and renewable energy power plants. Apart from prioritizing contracts from the industries, the specifics remain vague at present.

As reported by E&E News, the use of the act was first requested by Joe Manchin III, a moderate Democrat in the increasingly red-hued state of West Virginia, a part of the US that has a long history of coal mining. His request was picked up by Rick Perry’s Department of Energy, which according to industry sources is now reportedly seriously considering using it.

It’s also aimed to help out the stalled nuclear industry. This oft-mischaracterized low-carbon fuel source is increasingly being seen as a key measure on a path toward the decarbonization of the economy. It has, however, been struggling for a variety of reasons, particularly (once again) because natural gas, wind, and solar are often cheaper, and due to negative perceptions of it.

In any case, the use of an old wartime act to influence the energy sector is certain to raise eyebrows. Saying that, although this is a decidedly novel approach to saving the troubled industries, there have been several previous attempts to use government policy to intervene in this manner.

Recently, FirstEnergy Corp., a US electric utility, requested that an emergency order be used to compensate endangered coal and nuclear power plants owned by the company, but so far this has received a lukewarm response from Perry.

Perry himself proposed, in vain, a coal bailout not too long ago, one which would again require the government to intervene in energy markets.

Vox noted at the time that Perry falsely claimed subsidies for clean energy sources are the reason that coal and nuclear is faltering, also adding that their loss will threaten the nation’s electric grid. This was despite the fact experts across the board, including those that authored a department-commissioned report on grid reliability, found these claims untrue and the proposal economically ludicrous.

Don’t be surprised if similarly daft arguments make an appearance this time around should Perry et al. decide to go for it.

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