Another way for taxpayers to subsidize fossil fuels, – load them into the military budget.
Dozens of coal plants, including those slated for retirement, could supply the military under President Donald Trump’s latest plan to save the embattled coal industry.
Trump will sign an executive order Wednesday directing the Department of Defense to enter into power contracts with coal plants, according to a White House official. It wasn’t exactly clear how the administration intends to achieve that goal, but an Energy Department official said DOE had identified more than three dozen coal plants that could supply electricity to military installations.
The administration’s stated goal is to provide a reliable source of power to the military and support coal plants that would otherwise retire, said the DOE official, who spoke on the condition of anonymity because they are not authorized to speak to the press.
The move is a major escalation of Trump’s efforts to revive coal. The White House has prepped a broad suite of actions for Wednesday, including announcing millions of dollars to recommission and upgrade coal plants in West Virginia, Ohio, North Carolina and Kentucky, according to a White House official. The Wall Street Journal was the first to report on the outlines of the administration’s plans.
White House press secretary Karoline Leavitt told reporters Tuesday during a press briefing that the president on Wednesday would “discuss how clean, beautiful coal is not only keeping the lights on in our country, but also driving down the cost of electricity across the country.” A White House official said Wednesday’s order — titled “Strengthening the United States National Defense with America’s Beautiful Clean Coal Power Generation Fleet” — aims to ensure DOD “has reliable power and to strengthen the grid.”
DOD referred a request for comment to DOE, which did not respond to inquiries about the administration’s plan.
The DOE official provided further details. The administration’s hope is that military installations will enter into power purchase agreements with coal facilities. Those contracts will provide a stable source of revenue needed to keep the plants open and encourage private financing opportunities, the person said.
“They are putting more action to their words,” said Tony Knutson, a coal analyst at Wood Mackenzie who cautioned that he had not seen the details of the plans. He noted that the U.S. coal fleet is aging and that the cost of maintaining coal facilities is often one of the primary reasons power companies chose to close them down.
“If they can have the government pay for that, I can’t see why they wouldn’t keep them online longer,” he said.
Coal boosters have also pushed the idea of leveraging the military to support the use of both metallurgical coal for steelmaking and thermal coal for power production. The government oversees hundreds of military installations across the U.S.
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Nevertheless, Coal is dying. Spending additional taxpayer money to continue resuscitation on a corpse seems counter productive.
Andy Blumenfeld, a coal analyst at McCloskey by OPIS, said almost 8,000 megawatts of coal-fired generation are scheduled to either close or shift to natural gas by the end of the year. That number includes a 1,500-MW plant in Michigan that the DOE has ordered to continue operating.
That downward power trend is extending into mining and leasing on federal land, where active coal leases in the U.S. have steadily declined from almost 500 in the 1990s to about 280 two years ago, according to federal data. Blumenfeld also said coal miners in the Powder River Basin have already locked up 16 years’ worth of leasing and the administration isn’t likely to drive a surge of new activity.
Brendan Pierpont, director of electricity modeling at Energy Innovation, a nonpartisan energy and climate policy think tank, agreed. He said coal is in a long-term structural decline that’s unlikely to ease even with Trump’s intervention or the rush to build new power-hungry data centers.
That’s because the country’s existing coal fleet is aging — the average age hovering around 42 years — as maintenance and fuel costs rise, he said. There are no plans for new facilities on the horizon, Pierpont said, and utilities and data center developers looking for the cheapest and fastest sources to power demand are moving toward storage and gas peaking units, not coal.
“I don’t see anything that’s going to kind of stop this long-term trend, because it’s really driven by these fundamental economic factors,” said Pierpont. “These are older, less economic clunkers, essentially, and … it’s pretty clear that economics there are going to be a limiting factor.”