Trump considers Cold War-era law to save nation from ‘manufactured’ energy crisis

Pro-coal politicians proclaim taxpayer bailout is needed to protect the homeland.

President Trump and Sen. Joe Manchin (D-WV) are considering ways for taxpayers to subsidize the coal and nuclear power industries. CREDIT: Mark Wilson/Getty Images
President Trump and Sen. Joe Manchin (D-WV) are considering ways for taxpayers to subsidize the coal and nuclear power industries. CREDIT: Mark Wilson/Getty Images

During President Barack Obama’s presidency, the coal industry and its boosters in Congress often invoked the term “war on coal” to criticize the administration’s energy and environmental policies. Even though Donald Trump now occupies the White House, these same people still believe an enemy — an unnamed villain now that Obama is gone — is waging a war not only against the coal industry but nuclear plants as well.

As a result, the Trump administration is exploring whether a Korean War-era law could be used to prop up the nation’s coal and nuclear plants, Bloomberg reported Thursday.

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The Defense Production Act of 1950 allows a president to nationalize private industry to ensure the U.S. has resources that could be needed in time of a war or after a disaster — two situations that are not happening right now. President Harry Truman used the law in late 1950 to cap the price of steel as part of a war mobilization effort against Korea.

The statute classifies energy as a “strategic and critical material,” allowing the president to order businesses to accept contracts for materials and services.

Sen. Joe Manchin (D-WV) sent a letter to President Trump on Wednesday suggesting he “consider using the tools embodied in the Defense Production Act of 1950” to prevent the closure of coal-fired and nuclear power plants.

Using terms typically reserved for times of war — and not to describe unprofitable industries — Manchin, who is seeking reelection this fall, emphasized Trump needs to invoke the statute to preserve the “security of our nation.”

“The security of our homeland is inextricably tied to the security of our energy supply,” the senator wrote. The 1950 statute grants the president the authority “to ensure that the nation’s domestic industrial base is capable of providing the essential materials needed to defend our nation and protect our sovereignty,” Manchin said.

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The West Virginia lawmaker is hoping to appeal to a president who often manufactures crises where none exist — securing the U.S. border with Mexico, for example — as a way to stoke fear among the American public.

From an energy perspective, the law was previously invoked in 2001, according to Bloomberg, to keep natural gas flowing to California when the state was facing a real crisis — rolling power blackouts, mostly caused by manipulation of energy markets in the western United States.

Invoking the 1950 statute would represent yet another attempt by pro-coal politicians to make customers stabilize the profits and shareholder value of failing coal companies and owners of nuclear fleets, rather than avert any immediate threat facing the American public.

“It’s as if each week, the Trump Administration comes up with a new ploy to saddle electricity customers and taxpayers with uneconomic coal and nuclear plants that are heading for retirement — this time it’s using a Cold War era law meant for wartime,” Mary Anne Hitt, senior director of Sierra Club’s Beyond Coal campaign, said in a statement. “Using the Defense Production Act to prop up uneconomic plants when there is ample capacity is a clear abuse of presidential power.”

So far, Trump and his industry partners have failed in their attempts to get customers to subsidize coal and nuclear plants. In January, federal regulators rejected a proposal submitted by Energy Secretary Rick Perry to offer special payments to these plants to ensure they stay open. The proposal would have provided guaranteed profits to the coal and nuclear industries.

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More recently, FirstEnergy Corp. asked Perry to rescue its coal and nuclear plants, along with other companies’ plants located in the eastern United States, by declaring an “emergency” in the power industry. The request was widely panned by industry officials and experts, with one company describing the scenario as a “manufactured crisis.”

Earlier this week, Rep. David McKinley (R-WV), who has received huge amounts of cash for his campaigns from the coal industry, pleaded with federal regulators to provide taxpayer relief to the coal industry in his state.

“We keep having hearings, keep discussing it, but I want to move from the abstract to something concrete,” McKinley said, calling for action to help the industry on Tuesday at a House hearing where all five members of the Federal Energy Regulatory Commission (FERC) testified.

Give them credit: Despite objections by grid operators, consumer advocates, and business interests, the coal and nuclear industries are trying their best to find a statute that might help them survive in a market where they’re failing to compete.

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FirstEnergy is asking Perry to issue an emergency order under section 202(c) of the Federal Power Act. FERC refused Perry’s plan to bail out coal plants under section 403 of the Federal Power Act. And now a West Virginia senator wants Trump to use a law passed in wartime — Defense Production Act of 1950 — to keep revenue flowing to the same companies that fill his campaign coffers.