Trump wants energy security to be about electricity, not just oil

The Energy Department is considering invoking three laws to force operators of America’s electricity grid to compensate economically struggling coal and nuclear power plants.

Two laws are more than 60 years old: Defense Production Act of 1950 and Federal Power Act of 1935. They give the president broad powers to make domestic-policy changes in times of emergency as determined by the executive branch.

The third, a 2015 transportation spending law, gives more authority to the Energy Department to ensure the electricity grid is secure. The administration interprets this partly as including “fuel-secure” power plants — namely, coal and nuclear.

The administration’s thinking goes like this:

• The U.S. needs to make sure that electricity fuel can be available in the case of an emergency, particularly a cyber or terrorist attack that knocks out energy infrastructure.
• The types of fuel that can be stored on site at power facilities are coal and nuclear.
• Some power plants in these two industries are set to shut down in the coming years, or have already shut down, because of cheaper competition from natural gas and renewable energy.
• On natural gas, the administration says in an internal memo that the millions of miles of pipelines moving the fuel around are at increasing risk of cyberattacks.

In an interview over the weekend, Dan Brouillette, deputy secretary at the Energy Department, disputed the notion that Trump is trying to find a way to bolster coal and nuclear. He said the administration has received classified intelligence that indicates a need for redundant electricity supplies on the grid if it's under stress.

“Based on the threats and intelligence that we see, it’s pretty clear that we have some concerns around natural gas pipelines as well as some parts around the electric grid. We’re focused on redundancy. That’s what nuclear facilities in particular, and coal to some degree, provide.”

Outside experts agree the electric grid is considered a top target, but they also say that addressing those concerns by stockpiling coal and nuclear isn’t the best solution.

The risks to the energy sector are real, but “it’s disingenuous in that they’re trying to further a non-cyber policy priority, which is related to energy production,” said Dave Weinstein, a vice president at Claroty, a cybersecurity software company.

It’s almost certain that any move would face legal challenges from a strange bedfellows group of interests ranging from consumer groups to natural-gas producers. Because Trump is invoking national security, analysts at Morgan Stanley and ClearView Energy Partners, a nonpartisan research firm, say it's likely the policies would be upheld in court.

“The issue isn’t about who thinks what is genuine. The issue is that U.S. and international laws give deference to national security because national security is the bedrock on which advanced economies stand.”

The administration is also considering creating a Strategic Electric Generation Reserve to make sure enough power is always available while it studies the issue more. This could allow the Energy Department to buy power plants or pay plants to generate fuel if needed, which would likely be coal or nuclear.

Compare that to what's happening with the Strategic Petroleum Reserve — which is getting cut back, not strengthened.

• That reserve, which Congress created in response to Middle East oil producers cutting off oil supply to the U.S. in 1973, holds more than 700 million barrels of oil in huge salt caverns along the Gulf of Mexico.
• Congress has passed six laws over the last four years that will sell almost half of that — 300 million barrels of oil — from the reserve over the course of a decade, according to an analysis by Book’s firm.

Capitol Hill's change of heart is driven by a more than doubling of U.S. oil production over the last decade that has made America one of the world’s top crude producers and less reliant on Middle East oil.

Rather than stockpiling extra power, Weinstein suggests it would be better to make the infrastructure more secure, including transmission hubs and pipelines.

The cybersecurity of pipelines, oddly enough, is overseen by the Transportation Security Administration, the same government body you encounter at airport security. The agency has just six people working to oversee roughly three million miles of oil and natural gas pipelines across the U.S.

Go deeper:

In focus: Trump's coal and nuclear bailout

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