Trump admin tries again to revive dying coal industry

On Thursday, President Donald Trump announced his administration’s latest attempt to prop up the US coal industry during an incoherent press event that randomly oscillated between energy issues and Trump’s fixation with building and renovating monuments in DC. The energy portion of the events was also frequently disconnected from reality.

“Today we’re taking historic action to bring down the price of energy and the cost of living for all Americans with the power of clean, beautiful coal,” said Trump, apparently unaware that coal is one of the most expensive means of generating electricity in the US.

With wind and solar power getting cheaper, coal has become the second-most expensive way of producing electricity, trailing only the cost of building a new nuclear plant. As a result, no new coal plants have been completed in over a decade, and coal has gone from powering over half the electrical grid to producing only about 15 percent of the nation’s electricity. That’s before the indirect costs of coal use are considered. It produces the most greenhouse gas emissions per unit of energy, releases dangerous particulates and chemicals into the atmosphere, and leaves behind ash that has high levels of toxic metals.

That’s reality, but the White House is clearly not inhabiting it. “If you look at some of the real great failures, countries, they’re usually wind,” he proclaimed. “It keeps blowing, blowing, blowing and puts you right out of business. Very expensive. The most expensive energy there is.”

He also suggested that China, which produces roughly half the wind energy in the world, isn’t actually using it: “About the only time they build [wind turbines] is to sell them to stupid people in the United States.”

Despite the economic issues with coal, Trump claimed that his new effort to stall its decline will save $50 billion in electricity costs. The source of that figure wasn’t specified.

The $700 million would be spent under the Defense Production Act, which allows the president to protect industries deemed critical to national defense. An amendment to the act, passed in 1980, added energy to the list of industries where the president can intervene. A New York Times report indicates that much of the money for this comes from a fund Congress created to foster carbon capture development.

Much of the money will go toward updating 14 coal plants that might otherwise be shuttered. That’s in addition to the plants that the government has simply ordered utilities to keep open. In addition, funds would go toward the construction of new coal plants in Alaska and West Virginia, which would be the first new plants built in the US since 2013.

The Department of Energy funding would be coupled with private investments. But these represent a significant risk. The rapid pace of renewable energy growth is likely to continue, and the price of energy from coal will likely rise as soon as the EPA returns to enforcing existing regulations, something that may happen before construction of the new plants is even complete. So to the extent that this effort succeeds, there’s a reasonable chance it will produce stranded assets.