Trump's coal gambit may yield political points, not mining jobs
(Bloomberg) — The Trump administration’s plan for reviving coal power plants is unlikely to resurrect mining jobs but may boost the president’s support among crucial Rust Belt voters before the midterm elections that will determine which party controls Congress.
President Donald Trump has asked Energy Secretary Rick Perry to take immediate action to stem closures of coal and nuclear power plants. A draft plan invokes national security concerns to justify dramatic steps, such as mandating electricity purchases from the plants.
The potential effort to subsidize coal and nuclear power plants wouldn’t reverse the gains in automation that have caused most job losses in coal mining, as computerized longwall machines edge out miners swinging pickaxes. Still the practical effect of Trump’s plan might not matter because the intervention would communicate that he cares about displaced workers, said Patrick Hickey, a political science professor at West Virginia University.
The issue is so potent that some Democrats also are seizing on coal as a way to court voters. And vulnerable Democratic Senator Joe Manchin of West Virginia is explicitly backing Trump’s effort.
Under an Energy Department strategy detailed in a 41-page memo obtained by Bloomberg, the administration is considering invoking national defense to establish a strategic electric-generation reserve and compel grid operators to buy power from at-risk plants that have fuel on site — mostly coal and nuclear facilities.
Trump has used similar national security arguments to support market interventions aimed at protecting other treasured political constituencies such as steelworkers and automakers.
He imposed tariffs on steel and aluminum from major U.S. allies and trading partners last month, asserting the move is necessary to bolster the U.S. industrial base for national security reasons. The Commerce Department is now investigating whether to curb auto imports in the name of national security.
And the administration is justifying its efforts to subsidize coal and nuclear power plants by noting that 99 percent of U.S. military installations are dependent on the domestic power grid and that reliable electricity is essential to the national defense.
"The practical effect of Trump’s plan might not matter because the intervention would communicate that he cares about displaced workers"
But federal regulators on Tuesday disputed the administration’s assertion that coal and nuclear power plant closures threaten grid reliability. And the chairman of the Federal Energy Regulatory Commission, Kevin McIntyre, told a Senate committee there is “no immediate calamity or threat.”
The effort dovetails with Trump’s campaign pledges to “get those mines open” and bring back mining jobs. In one West Virginia rally, Trump donned a helmet and pantomimed shoveling coal before telling the cheering crowd: “For those miners, get ready, because you’re going to be working your asses off.”
Trump’s support for coal miners and steelworkers helped convey an allegiance to the working-class voters who elected him to the White House. Trump won 68 percent of the vote in West Virginia, a once reliably Democratic state, and he also improbably carried Pennsylvania, once the center of the coal industry.
“He’s looking at using the natural resources of the United States — to use what we have,” said Tom Polchin, a 63-year-old coal miner in Pennsylvania. “He’s done everything he’s promised, and he’s only in to his administration a year and a half.”
While administration officials are still deciding on a final plan for shoring up coal and nuclear plants, the potential action — and merely the discussion of it — could aid Republicans in swing states where support for coal remains a potent political litmus test.
“Very seldom do you have a president who is on the side of the coal industry,” said Eddie William Cline, a 68-year-old West Virginia man who spent more than three decades as a coal miner and voted for Trump two years ago. “He promised he’d bring it back, and he has.”
While Cline said he doesn’t agree with everything Trump does — and he’s not sure if the possible power plant action is "exactly" the right prescription — he praises the president for taking action to help coal miners and lengthen the transition to renewable power and natural gas.
“It’s something we need right now, because you’ve got so many people out there hanging on,” Cline said. “You’ve got so many miners out there that are still relying on that for their livelihood.”
Just by considering an emergency intervention, the administration has forced Manchin, the West Virginia Democrat, into an uneasy alliance with the president, as he pleads with Trump to take action under the 1950 Defense Production Act.
“The security of our homeland is inextricably tied to the security of our energy supply,” Manchin said in a statement echoing the Energy Department’s drafted rationale. “The ability to produce reliable electricity and to recover from disruptions to our grid are critical to ensuring our nation’s security against the various threats facing our nation today – whether those threats be extreme weather events or adversarial foreign actors.”
Senator Heidi Heitkamp, a Democrat from North Dakota, a state flush with oil and coal, has worked to stress her support for all fossil fuels as she seeks re-election. And for years, she has pushed measures to accelerate the development of technology to clean up carbon dioxide emissions at coal-fired power plants and could prolong coal’s use in the electric sector.
It’s not clear intervention would actually deliver a jolt to U.S. coal demand — or lead to a surge in new mining jobs. Some 82,843 people work as coal miners, according to the Mine Safety and Health Administration. The National Mining Association says that translates to some 115,000 jobs directly tied to coal mining.
That’s especially true if the Trump administration plan ends up providing a lifeline to mothballed coal power plants — effectively subsidizing them to stay idle and at the ready to supply electricity in case of an emergency. Credit Suisse analysts have suggested that’s a likely outcome.
The Trump administration’s draft memo on its electricity plan suggests it could focus on creating “a strategic reserve of essentially mothballed coal capacity,” the analysts said in a research note, adding that would have “little impact on actual coal power output.”
And even if the intervention were to halt coal power plant closures, companies aren’t clamoring to build new ones.
“It is a pander,” said Paul Beck, a professor emeritus of political science at Ohio State University. “It fits in with a populist-oriented campaign where a candidate is saying ‘I stand for the little people who are bypassed by government.”’