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PRINTER, KY - JUNE 3: Coal hoppers sit coupled on a spur track in front of a coal tower at Blackhawk Mining, LLC Spurlock Prep Plant on June 3, 2014 in Printer, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)

Coal to Trump: Your Money or Our Life

West Virginia seeks $1 billion for beleaguered coal sector, saying national energy security is at stake.

Bloomberg --West Virginia Governor Jim Justice said Donald Trump is “really interested” in his plan to prop up Appalachian mining by giving federal money to power plants that burn the region’s coal.

Justice, a coal and real estate mogul elected governor last year as a Democrat, announced at a West Virginia rally alongside President Trump last week that he’s becoming a Republican. Justice has recently spent a “goodly amount of time" meeting one-on-one with Trump and has liked the feedback to his pro- coal proposal. The plan calls for the Department of Homeland Security to send $15 to eastern U.S. utilities for every ton of Appalachia coal they burn.

“He’s really interested. He likes the idea,” Justice said in a phone interview on Wednesday when asked about Trump’s reaction. “Naturally, he’s trying to vet the whole process. It’s a complicated idea.”

In Justice’s eyes, the coal payments will be necessary because Trump’s moves to roll back regulations on the Appalachian coal industry won’t be enough to preserve it. The Appalachian coal sector has been shrinking for years as companies are forced to spend more money to access harder-to-reach seams of the fossil fuel. Meanwhile, competitors in regions including the Illinois Basin and Powder River Basin of Wyoming and Montana have much thicker coal seams that are cheaper to get to.

Critics say such a proposal would be expensive and misguided. U.S. power plants burned at least 110 million short tons of Appalachian coal in 2016, according to Andrew Cosgrove, an analyst at Bloomberg Intelligence. A payment of $15 for each of those tons would cost at least $1.65 billion.

Justice said he’s discussed the plan with, among others, Department of Energy Secretary Rick Perry, Vice President Mike Pence and Jared Kushner, Trump’s senior adviser and son-in-law.

Asked whether Trump is considering Justice’s plan to prop up the coal industry, White House spokeswoman Kelly Love said there’s nothing to announce at this time.

While Appalachian coal production is up this year, if there’s another “downtick” it’ll cause another spate of bankruptcies, mine closures and layoffs that could be impossible to recover from, Justice said.

At the heart of his pitch, Justice argues that the country is becoming too reliant on natural gas for power and it’s not enough to supplement that with coal from the Midwest and West.

Justice rejects the notion that his plan amounts to a "bailout" or "subsidy" for Appalachian coal. Rather, it’s a matter of national security, he said, because terrorists could easily blow up important gas pipelines or derail freight trains shipping coal to the east, leaving large swaths of the country lacking power-plant fuel.

“Can you imagine what would happen if we lost the power in the east for a month, or two months, or three months?” Justice said. “It would be like a nuclear blast went off. You would lose hundreds of thousands of people. It would be just absolute chaos beyond belief.’’

Justice insisted that renewables could one day be the primary source of U.S. electricity generation, but says he’s not sure whether that’ll come in 10, 20 or 30 years.

“This may very well be a temporary fix, a temporary security blanket,” he said. "But today we don’t have the renewables in place. And today, we cannot lose our eastern coal fields."

While it’s legitimate to worry about the reliability of the U.S. power grid, the decline of the coal industry isn’t raising much of a threat at a time of cheap and abundant gas and fast-growing wind and solar power, said Jason Bordoff, director of Columbia University’s Center on Global Energy Policy.

It’s "unfortunate and irresponsible" to float a policy idea like this, Bordoff said, when U.S. and global forces are causing a structural decline in the Appalachian coal sector and communities need to diversify the local economy.

 

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