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Trump turns down Murray Energy coal relief proposal

AP file photo
In this June 7, 2017 file photo, a coal barge is positioned as a backdrop behind President Donald Trump as he speaks during a rally at the Rivertowne Marina in Cincinnati. President Donald Trump personally promised to activate emergency legal authorities to keep dirty or economically uncompetitive coal plants from shutting down, a top American coal company said. The Trump administration now says it has no plans to do so.

The Trump administration has turned down a plea from West Virginia’s largest coal producer to mandate that certain coal-fired power plants remain open, a move by the Department of Energy that also signals trouble for Gov. Jim Justice’s proposal for a $4 billion annual federal subsidy to prop up the struggling Appalachian mining industry.

U.S. Department of Energy officials rejected the repeated urgings of Murray Energy and its outspoken CEO — Trump supporter Bob Murray — to invoke emergency authority to avoid further closures of coal plants, despite what Murray said were promises by President Donald Trump to take the action.

Energy Department spokeswoman Shaylyn Hynes confirmed the agency’s decision, which was first reported Tuesday morning by The Associated Press. Hynes said the administration is sympathetic but that the White House and DOE agreed to turn down the proposal.

“We look at the facts of each issue and consider the authorities we have to address them but, with respect to this particular case at this particular time, the White House and the Department of Energy are in agreement that the evidence does not warrant the use of this emergency authority,” Hynes said in an email.

Under the law, the federal government can order a power plant to stay open “during the continuance of any war in which the United States is engaged” or whenever “an emergency exists by reason of a sudden increase in the demand for energy or a shortage of electric energy.”

The authority has seldom been used, and usually to address natural disasters or prevent specific regional blackouts. Among other things, the emergency authority can protect power plants if they violate environmental rules during a period when they were mandated to stay open.

Murray had been arguing that the Trump administration should invoke this authority, saying that it was “the only alternative” to remedy “an emergency on the electric power grid” and to “ensure national security by preserving the resilient electric plants that are currently at tremendous financial risk.”

Murray Energy told the White House and the Energy Department that one of its primary customers, FirstEnergy Solutions, is “on the verge of bankruptcy” and that such a move would cost 6,500 Murray Energy employees their jobs.

In West Virginia two weeks ago, Justice began publicly promoting his own proposal for what he says would be a $4.5 billion annual federal subsidy to power companies that burn coal from Appalachia. The proposal’s announcement came in the same week that Justice rejoined the Republican Party — during an appearance with Trump in Huntington — after running for governor as a Democrat.

Without providing any evidence, Justice warned of dire consequences, arguing that the move is needed to protect the power grid, in case of “any type of emergency shutdown” involving the growing number of power plants burning natural gas.

“All it is going to take to shut the power grid down to the entire eastern half of the country is a bomb being placed at a key natural gas pipeline or on a major highway artery to the west,” Justice said. “Think about what would happen if the power grid was shutdown for 60 to 90 days in the dead of winter. We could lose hundreds of thousands of people.”

James Van Nostrand, director of the Center for Energy and Sustainable Development at West Virginia University’s College of Law, said Tuesday the administration likely would provide the same response to Justice’s proposal as it did to Murray’s.

“There is simply no evidence or analysis to support the contention that the nation’s electricity grid would become unreliable in the absence of a secure supply of Appalachian-produced coal, or the continued operation of FirstEnergy’s expensive and uneconomic coal plants,” Van Nostrand said.

Van Nostrand said the nation’s electrical grid has actually become more reliable in recent years, with the increased diversity of supply, including more and more smaller and highly-efficient natural gas plants, dozens of wind farms, and thousands of solar installations. That’s in contrast to relying on fewer, large coal-fired plants that are generally located in relatively remote locations and more reliant on a few transmission lines.

“Coal needs to be able to compete based on price in the nation’s ruthlessly competitive wholesale electricity markets and, while the motives of Governor Justice are understandable, his proposal stands virtually no chance of approval and, frankly, does a disservice to the citizens of West Virginia by raising expectations — cruelly — that the coal jobs are coming back,” Van Nostrand said. “Our efforts are better spent by positioning the state to succeed in the new energy economy that is being shaped by technology and market forces far stronger than can be overcome by a well-meaning, but ill-conceived ‘national security’ subsidy.”

Butch Antolini, communications director for the governor, did not respond to a request for comment.

Murray Energy spokesman Gary Broadbent said that the company is “unable to comment on any of our communications with President Trump or his administration.”

In letters obtained by and cited by the AP, Murray and indicated that emergency action to keep coal plants open had been “ordered by President Trump several times,” but had still not occurred.

Murray says an Aug. 4 letter that Trump had met with Murray and FirstEnergy CEO Charles E. Jones during the president’s Aug. 3 visit to Huntington and then turned to his personal aide, John D. McEntee III and said, “tell [chief economic adviser Gary] Cohn to do whatever these two want him to do.”

A little more than a week before that, Murray talked to Trump about the issue in Youngstown. Murray said in the Aug. 4 letter that Trump turned to Energy Secretary Rick Perry and said, “I want this done.”

“This urgent action, now ordered by President Trump several times, has not occurred,” Murray said in the Aug. 4 letter. “As stated, disastrous consequences for President Trump, our electric power grid reliability, and tens of thousands of coal miners will result if this is not immediately done.”

In a later letter, dated Aug. 18, Murray Energy executive vice president Robert D. Moore warned Perry that at least 24 coal-fired plants are slated for closure over the next 14 months, prompting a “precipitous decline” in steam coal demand.

“With coal supplies already in excess of coal demand, there will be no option other than the immediate closure of dozens of thermal coal producing mines resulting in the elimination of thousands of jobs and the aforementioned destruction and devastation of the very population that voted President Donald J. Trump into the Oval Office,” Moore wrote.

Reach Ken Ward Jr. at kward@wvgazettemail.com, 304-348-1702 or follow @kenwardjr on Twitter.

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