Trump coal plan tests whether AI, fed intervention can undo history
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The conventional wisdom about U.S. coal's grim prognosis is a tad murkier after President Trump threw unprecedented government weight behind the fuel.
Why it matters: His plan will test whether forces long battering coal — cheap gas, pollution regs, renewables' rise and more — can be undone by rising power demand and federal intervention.
The big picture: It's early days, but equity markets are providing an initial verdict on Trump's orders issued Tuesday.
- The share prices of U.S. producers like Core Natural Resources, Alliance Resource Partners, Warrior Met Coal, and Peabody Energy leapt on the news.
Driving the news: Policies in Trump's orders include:
- Pushing DOE to use emergency authorities to keep plants running if shutdowns might hinder reliability or adequate resources.
- Formally designating coal as a "mineral" to unlock support, including Defense Production Act resources, under a separate order last month.
- Leveraging federal loans and other financial support to aid the sector. DOE head Chris Wright signaled he wants to use billions of dollars in DOE loan office authority for coal-related projects.
- Using "categorical exclusions" from in-depth study under the National Environmental Policy Act for coal production and export projects.
- Telling the Justice Department to take "all appropriate action" to stop enforcement of state climate laws that target fossil fuels.
Coal has been losing ground in U.S. power markets for nearly two decades.
- The fuel provided 16% of the nation's power last year, down from about half at the turn of the century, per Energy Department data.
The intrigue: Trump vowed to rescue coal in his first term, too, but the decline continued.
- But unlike last time, the new efforts arrive as U.S. electricity demand is rising for the first time in many years, partly thanks to AI's energy thirst.
- Some utilities are already pushing back plans to shutter coal-fired plants. Longer lifetimes are more likely than companies building new coal units.
"If we want to grow America's electricity production meaningfully over the next five or ten years, we [have] got to stop closing coal plants," Wright told CNBC's "Money Movers."
- And while U.S. coal demand has cratered, global use is still growing. Trump's new orders also push agencies to seek expanded export markets for U.S. coal.
What we're watching: Strategies from environmentalists opposing the policies — including possible litigation.
- "These orders ignore energy economics and existing legal requirements while degrading public health," said Jennifer Danis, federal energy policy director at NYU law school's Institute for Policy Integrity.
