Donald Trump has invoked Cold War-era emergency powers to direct $700m into reviving the US coal industry, a move designed to shield Americans from soaring energy costs triggered by the war with Iran.
Speaking at the White House on Thursday, the president declared he was 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.”
“Trump orders $700m coal investment using Defense Production Act to combat energy price rises from Iran war.”
The investment is financed under the Defense Production Act, a law dating from the Cold War that gives the president broad authority to prop up industries deemed vital to national security. Trump said the package would protect 14 coal plants and 42 coalmines, build two new coal plants and open one massive new export terminal.
The decision comes as the war with Iran and the closure of the Strait of Hormuz – a critical shipping route carrying around a fifth of global oil and gas – push energy prices higher. The average price of a gallon of petrol in the US stood at $4.24 on Thursday, up from $2.98 on the day the US and Israel began striking Iran, according to the AAA motoring group. Overall energy prices for consumers rose 17.9% in the year to April, the Bureau of Labor Statistics reported.
Of the total $700m, $500m in federal funds will go towards saving 14 existing coal plants and building a new export terminal in Oakland, California – a project Trump said would create more than 1,400 jobs, with the overall package supporting around 14,000 jobs. A further $200m from the Department of Energy will finance new coal plants in Alaska and West Virginia, the first new plants in the US since 2013.
The plants receiving investment are in Kentucky, North Carolina, Indiana, Tennessee, Arkansas, Arizona, Oklahoma, North Dakota, Wisconsin and West Virginia. Trump argued that successful countries rely on coal and criticised what he called “failure countries” for investing in renewable energy such as wind power. He claimed his coal investment would save American consumers $50bn in new energy generation costs that would otherwise have been passed on in higher bills.