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Trump urged to use Korean War-era law to provide relief for struggling coal, nuclear plants
WASHINGTON – The war on coal is over, the Trump administration declared last fall.
But a new front in the war to save coal may be about to begin.
The Energy Department is looking into whether it can keep struggling coal and nuclear plants open by invoking a 68-year-old law designed to make sure the nation has the resources it needs in times of war or natural disaster.
The Defense Production Act of 1950, approved by Congress in response to the start of the Korean War, gives the president a broad range of powers to in effect nationalize private industry for the nation’s defense.
Those powers include presidential authority to require businesses to sign contracts or fulfill orders deemed necessary for national security. The president also could authorize loans, loan guarantees and other incentives to expand the production and supply of critical materials and goods and even authorize the government to buy and install equipment for private industrial use.
Energy experts say that invoking the act to benefit coal or any other industry that is struggling financially because of unfavorable market forces would be a sweeping and unprecedented use of the law.
But those advocating such a move say it’s warranted because numerous coal-fired and nuclear plants are in danger of closing or retirement, putting the resilience and the reliability of the nation’s electricity grid at risk.
“The security of our homeland is inextricably tied to the security of our energy supply,” Sen. Joe Manchin, D-W.Va., who first broached the idea, wrote in a letter to President Trump last month.
“The ability to produce reliable electricity is critical to ensuring our nation’s security against the various threats facing us today — whether those threats be extreme weather events or adversarial foreign actors,” Manchin wrote.
The senator, who faces a tough re-election battle this fall, sent similar letters last week to Energy Secretary Rick Perry and Defense Secretary Jim Mattis.
Protecting coal and putting miners back to work has been a mantra for Trump, who made a pro-coal agenda part of his platform during the 2016 presidential campaign.
Once in office, Trump rolled back a number of environmental protections that had been put in place under President Barack Obama and were reviled by the nation’s coal industry, which accused the Obama administration of waging a war on coal.
The Trump administration also has been looking for other ways to help the faltering industry, but those ideas have not always been well-received.
In January, the Federal Energy Regulatory Commission unanimously shot down a proposal by Perry that called for new regulations to ensure that coal and nuclear plants are fully compensated for the reliability and resiliency they contribute to the nation’s power grid.
FirstEnergy Solutions Corp., an Akron, Ohio-based energy supplier that announced in April it was filing for bankruptcy, has asked the administration to invoke its emergency powers to keep open certain coal and nuclear plants to protect the reliability of the electricity grid.
But the administration denied a similar request last year from Murray Energy, which is headquartered in St. Clairsville, Ohio, and is the nation's largest underground coal mining company. And Perry cast doubts on FirstEnergy’s request last month when he said that declaring a grid emergency may not be the most appropriate way to help ailing coal and nuclear plants.
Neither would be invoking the Defense Production Act, said Ryan Fitzpatrick, deputy director of the Clean Energy Program at the center-leftist think tank Third Way.
“This really is grasping at straws,” Fitzpatrick said.
Propping up the coal industry under the guise of national security would amount to “a perversion of market forces” since natural gas and renewable energy prices are low and changes in technology have enabled many more Americans to be energy efficient, said Stephen Smith, executive director of the Southern Alliance for Clean Energy.
“This would be like the whalers of the 1800s trying to use national defense as a justification to continue to defend whale oil as a lighting source against the light bulb,” Smith said.
The Defense Production Act has been used sporadically in the nearly seven decades since it became law. President Harry Truman used the law during the Korean War to establish a defense mobilization office and regulate production in industries such as steel and mining.
More recently, the Obama administration used its powers under the law in 2011 to force telecommunications companies to provide confidential information about their networks in its campaign to crack down on Chinese spying. And last June, Trump notified Congress that he would use his powers under the law to address critical technology shortfalls affecting the aerospace industrial base.
But, “I am not aware of any precedent for such a sweeping use of this law to save coal plants,” said Susan Tierney, who served as an assistant secretary in Obama’s Energy Department and now works for the consulting firm Analysis Group.
Because the president’s powers under the law are so broad, it’s unclear exactly how Trump might use his authority to help coal and nuclear power plants. But if the administration decides to go that route, Trump would have to issue a statement to the Defense Department declaring these resources or assets are critical to national security, Tierney said.
“It’s really hard to think of a national security rationale for maintaining these plants through intervention into a competitive market,” she said.
The Energy Department did not respond to questions about when a decision might be reached.
Manchin’s office said it has not gotten a response to its letter to Trump but remains in communication with the administration.