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Coal Baron Turned Republican Governor Wants a New Federal Subsidy to Boost Coal

 

 

By Samantha Page


August 8, 2017 - West Virginia Gov. Jim Justice, a coal baron and former Democrat who switched parties last week to side with President Donald Trump, is now calling for a $15-per-ton coal subsidy from the federal government, a local news site reported.


Justice says the subsidy is needed for national security reasons.


“If you’re all on gas or you’re all on gas and western coal and somebody puts a bomb at a gas junction point or somebody puts a bomb on a bridge coming from the west you could very well lose the entire eastern power grid,” Justice told the West Virginia Metro News.


Justice has met with White House officials, including Trump, to discuss the plan, which Justice openly admits is an effort to save the struggling coal industry. Under the plan, “the federal government would pay our power plants for every ton of coal that they buy that’s a Central [Appalachian] ton or Northern [Appalachian] ton of coal in order to preserve our eastern coalfields,” Justice said. He proposes a $15-per-ton subsidy.


“It’s sadly not surprising that a coal industry billionaire-turned-politician is trying to drive taxpayer dollars into his own pockets, but what is truly heartbreaking is Justice’s lack of interest in actually diversifying West Virginia’s economy so that we’re not beholden to the long-term decline of the coal industry,” Bill Price, Sierra Club’s Senior Organizing Representative for the Appalachian Region, told ThinkProgress in an email. Price said West Virginia needs are “real investments in our communities that empower small businesses, attract new industries, and sets up long-term economic opportunities,” not “to double down on a declining industry that has polluted our water, destroyed our mountains, and continually put our health at risk.”


It’s hard to square Justice’s proposal — that the federal government prop up an industry — with his new party’s official position against subsidies, also known as “picking winners and losers.” Then again, it’s completely in line with the White House’s support for fossil fuels. Since taking office, Trump has repeatedly moved to support fossil fuels, even at the expense of taxpayers.


Expert contends Interior Department underestimates revenue losses to taxpayers.


This week, the administration decided not to close a loophole that has allowed companies extracting coal, oil, and natural gas from public lands to reduce their royalty rates. The loophole costs taxpayers $75 million a year, according to the Interior Department notice.


According to Oil Change International, U.S. taxpayers already pay nearly $4 billion annually to support the coal industry, little of which passes through to coal workers or Justice’s constituents. (Justice himself is a coal baron, and in February his company was cited for safety violations after an investigation into the the death of a worker. The governor’s companies also reportedly owe millions of dollars in unpaid state taxes.)


“No matter how much money our government lavishes on the coal industry, it’s going to line the pockets of rich coal barons like Jim Justice, not the coal workers they’ve left behind,” Oil Change International campaigner Collin Rees told ThinkProgress in an email. “It’s true that we need a just transition away from fossil fuels, and one of the many things it will benefit is our national security. But the last thing we need to do is pour more money into the dying coal industry.”


While claims that there is a “war on coal” are spurious, the coal industry is definitely under pressure. Low natural gas prices and the fracking boom have led power companies to convert power plants to natural gas, while coal itself has gotten more expensive and difficult to mine, particularly in the eastern regions. In addition, coal takes a heavy toll on the environment, whether it is water contamination and habitat destruction from mountaintop removal or increased smog and negative health effects from coal-fired plants.


Lawmakers in Ohio are proposing to subsidize permanently two coal-fired plants.


Meanwhile, the cost of renewable energy has plummeted, while rapid improvements in battery technology are allowing intermittent power sources like wind and solar to supply around-the-clock electricity.


It was not immediately clear whether his plan would apply to all power plants, but Justice said he is concerned about the Eastern grid in particular. The United States has three power grids: Texas, Western (from the Rockies to the Pacific), and Eastern, which encompasses six different regional systems and stretches from Florida to the Dakotas, Maine to Oklahoma. The proposal seems to be an effort to undercut western coal, although eastern coal also travels by rail.


Earlier this year, Ohio lawmakers suggested subsidizing coal plants directly in an effort to prop up the industry.


Clean energy advocates are quick to point out that wind and solar offer significant advantages in the realm of national security. Not only can these energy sources not be spilled, they can also be located closer to the point of use and can be used to stabilize the grid. A recent leaked draft of a study from the Energy Department, which was widely believed to be an effort to undercut renewable energy and prop up baseload power, found that renewable energy is good for the grid.


Baseload power is generally considered to be sources like coal and sometimes natural gas, which can be run around the clock to provide electricity. Just this week, former Energy Secretary Ernest Moniz said that because of improvements in renewable energy technology, “We don’t know what baseload is anymore.”


Finally, it’s worth noting that it’s not entirely clear where Justice’s claims about national security are coming from. Last October there were two documented pipeline attacks: “Law officers fatally shot a man who reportedly had used an assault rifle to attack the Sabal Trail Pipeline, a natural gas pipeline under construction in Florida,” and “a coordinated group of domestic environmentalists caused the shutdown of five pipelines in four states transporting crude oil from Canada to the United States,” according to the Congressional Research Service.


“Prior to the October disruptions there had not been a successful physical attack on U.S. oil or natural gas pipelines over the last 15 years,” CRS found.


And, indeed, neither the crude oil shutdown nor the Sabal Trail attack were issues of national security. Even when a gasoline pipeline ruptured last year, leaking 250,000 gallons into an Alabama River, the risk was more about price and the environment than national security.


In fact, climate change is a much bigger threat to the nation’s security than failing pipelines. For years, the Department of Defense has been warning that climate change is a real and significant challenge, and more than half of all Americans believe it is major threat to national security.


But for his part, Justice, like the president, has denied the scientific consensus on climate change.

 

President Donald Trump, left, hugs West Virginia Governor Jim Justice, right, after Justice announced that he is changing parties. 

 

Photo by Susan Walsh, AP