But there is good news. Comprehensively cleaning up coal ash waste would ensure long-lasting environmental benefits and address environmental justice issues as well as generate new jobs in communities where coal-fired power plants have closed and expand opportunities for community redevelopment.

A new report by the Union of Concerned Scientists (UCS) and the Ohio River Valley Institute, Repairing the Damage: Cleaning Up Hazardous Coal Ash Can Create Jobs and Improve the Environment, highlighting the environmental and economic benefits of cleaning up coal ash at sites in Ohio and Kentucky, shows how these benefits could be achieved.

Coal ash cleanup is a national problem

Local communities—often low-income communities and communities of color—have for decades borne the brunt of the impact of coal ash, including polluted air and water and workplace illnesses and deaths. Research by Earthjustice has documented the extent of coal ash pollution. And our new work builds on previous work by the Northern Plains Resource Council, the Environmental Integrity Project, and Earthjustice that quantified the benefits of coal ash cleanup at three other sites nationwide.

Coal ash—or coal combustion residuals—is made up of a variety of waste streams, including fly ash, bottom ash, boiler slag, and material from flue gas desulfurization. While coal ash can be reused in such products as concrete, power plant owners responsible for the waste typically dispose of it on site, and often mix it with water to create a slurry and then pipe it to a nearby coal ash pond. Coal ash ponds, which are designed to contain many decades’ worth of waste, average more than 50 acres in size and more than 20 feet deep. Owners also store coal ash in dry form in landfills or reuse it for other industrial applications.

The new UCS-Ohio River Valley Institute report evaluates the cleanup costs and job-creation potential at two coal ash sites, the first case studies of their kind for the Ohio River Valley. One site, the J. M. Stuart coal-fired power plant in Adams County, Ohio, closed in 2018 along with another nearby coal plant, dealing a significant blow to the local economy. The other site, the Sebree Generating Station, consists of three coal-fired power plants (one still in operation but slated for retirement) in Webster County in western Kentucky. Our analysis evaluates the two sites owners’ plans for cleanup activities (both of which are violating federal regulations) and proposes a more complete “clean closure” plan for both. We conducted an engineering analysis to estimate the costs and direct job creation from the cleanup proposals for each site and used those results to perform an economic analysis of the impacts of the projects on each state’s economy.

Proposed cleanup plans are inadequate

Our team’s engineering analysis revealed problems at both sites. At Sebree, the utility plans to close its disposal sites between 2022 and 2024 by covering them and leaving the coal ash in place. This would likely be ineffective in preventing ongoing pollution. Its plan to cover the two coal ash ponds would not address known groundwater contamination issues and would violate the Environmental Protection Agency’s (EPA) 2015 Coal Combustion Residuals Rule, which prohibits capping an impoundment in place when ash is in contact with groundwater. If left in place, the contamination from the coal ash ponds would continue indefinitely.

Meanwhile, three of the ponds at J.M. Stuart violate location restrictions because of their proximity to a local aquifer and are contaminating groundwater, according to the owner’s own reporting. Failure to comply with federal groundwater monitoring requirements also has resulted in critical gaps in data for the rate and direction of groundwater flow and uncertainty regarding the nature and extent of the contamination both onsite and offsite.

Clean closure is better for the environment and the economy

Our proposed clean closure options for both sites include excavating and properly disposing of all accessible coal ash waste. We found that clean closure would provide superior protection for public health and the environment and create better opportunities for local jobs and associated economic activity, which is consistent with previous analyses conclusions. The additional costs of clean closure are justified by the higher number of jobs, broader economic benefits, and potential for redevelopment for nearby communities. These benefits would be especially significant for the Sebree plant, where the clean closure plan would generate nearly twice as many jobs as the utility’s proposal during the project’s construction phase, which refers to initial investments in infrastructure needed to excavate and safely store the coal ash waste. Clean closure would create 282 jobs during the four-year construction phase, while the utility’s plan would create 144. The clean closure option also would generate $130 million more than the owner’s plan in economic activity over 34 years (four years of construction plus 30 years of monitoring).

The clean closure scenario would also have considerably more impact on the local economy and job growth at the J.M. Stuart site. We estimate that the owner’s plan for construction would cost $224 million over nine years, while our clean closure plan would cost $279 million. As shown in the figures below, however, during the nine-year construction phase, our closure plan would create an estimated 314 jobs per year, while the owner’s plan would only create 252 jobs per year. The clean closure plan also would lead to $809 million in additional economic output in the state over 39 years (nine years of construction plus 30 years of monitoring), significantly more than the $667 million the owner’s plan would generate.

What to do

Fortunately, there are things that federal and state policymakers can do to ensure clean closure.

• First and foremost, the Biden administration must strictly enforce existing regulations that prohibit cap-in-place closure. The EPA’s 2015 Coal Combustion Residuals Rule already requires excavation when coal ash is in contact with groundwater if left in place. Congress should approve additional funding for EPA enforcement actions and for grants that empower fenceline communities to participate in discussions about closure options.
• Regulators must hold utilities and site owners accountable for comprehensive cleanup. Environmental regulators and utility commissions often have authority to ensure that coal ash sites are fully remediated.
• Ensure strong labor standards and safety protections for cleanup workers and prioritize dislocated workers in hiring. States should implement local hiring requirements to ensure that dislocated workers have priority access to cleanup jobs and require coal ash owners to pay prevailing wages to ensure that workers are paid fairly for their work. Most important, site owners responsible for cleanup must protect workers during operations because coal ash is extremely toxic.

(See the report for the full list of recommendations.)

Why comprehensive cleanup is essential

When coal plants close, nearby communities face fallout from lost jobs, lost local tax revenue, and an economic downturn. Many of these communities, which are disproportionately low-income or communities of color—or both, have suffered from the health impacts of coal-fired electricity generation for decades. When utilities do not sufficiently and safely clean up their coal ash sites, these communities continue to bear ongoing costs—lower property values, persistent water pollution, and the risk of catastrophic failures of inadequate containment structures—and receive no economic benefits. Remediating coal ash ponds and landfills is an essential component of any fair transition to a clean energy economy.

Ensuring that the disposal of coal ash is complete and as safe as possible would not only protect public health and the environment but would also create jobs in the very places where jobs are becoming scarce as coal mines and plants continue to close. Comprehensive cleanup would boost property values, eliminate pollution, and help communities diversify their economies, enabling them to attract new industries that will not inherit the cleanup liability, and make these communities places where more people want to live and work.

The Good

House committees have set levels of investment for existing programs that could facilitate the coming energy transition. Totaling $36.7 billion, here are the provisions I see as the most important:

• Although often overlooked, the US Department of Agriculture (USDA) has significant resources that can support energy transition communities. The bill includes $9.7 billion for grants or loans to rural electric cooperatives for debt relief and other costs incurred by closing coal plants and related transmission assets and replacing them with renewable energy systems or energy efficiency improvements. (This provision currently does not explicitly include support for workers, and it should.)
• Also included is $2 billion for a new Energy Community Reinvestment Financing Program at the Department of Energy. This program would extend the eligibility of Loan Guarantee Program projects to provide financial support to entities enabling low-carbon investments in energy communities. The financing explicitly supports displaced workers looking for new employment, community redevelopment, and accelerating environmental damage remediation.
• The package would appropriate more than $9 billion for the Commerce Department’s Economic Development Administration (EDA). That money includes $4 billion to create rural innovation hubs and $1 billion for economic adjustment assistance, of which $500 million is designated for energy and industrial transition communities—including coal, oil and gas, and nuclear energy communities. It also includes $500 million for public works projects and $4 billion for a formula grant pilot program at EDA called Recompete, which provides economic adjustment assistance to alleviate persistent economic distress and labor market dislocation.
• Included is $16 billion for the Labor Department’s Dislocated Worker Program, although this is much lower than the originally proposed $40 billion in combined funding for this program. The money would be used to provide grants to states to support career services and training programs for workers who have lost their jobs.

Additional investments include:

• Rural Development: $3.26 billion for the Rural Energy for America Program (REAP); $3.5 billion for Rural Partnership Program, which provides flexible grant funding to support job growth in rural communities and aid in economic recovery; $40 million for direct loans and loan guarantees for rural business development; and $430 million for grants for rural water and wastewater systems in persistently impoverished counties.
• Broadband: Access to broadband for rural communities is a critical component of facilitating economic development. On top of the more than $65 billion for broadband development included in the bipartisan infrastructure bill, the Build Back Better Act would invest another $4 billion in the Emergency Connectivity Fund.
• Conservation: $12 billion for the Civilian Climate Corps to support conservation projects on public lands, which could potentially employ dislocated workers.
• Mine Reclamation: Notably, the bipartisan infrastructure bill includes an infusion of $11.3 billion into the Abandoned Mine Lands Fund to support cleaning up mine lands abandoned prior to 1977 and extend the coal excise tax that supports the program for an additional 15 years.
• Education and Training: The package would fund a number of other programs that support education and training for different categories of workers.

This is by no means an exhaustive list of investments that could support energy transition priorities and needs, but it’s a good snapshot of where we are.

What’s Needed

The problem is that the investments cited above are not directed toward the specific group of workers affected by the shift to a clean energy economy. Additional support for directly affected workers and communities will be needed as we invest in programs designed to accelerate the transition. These include:

• $21.1 billion to provide wage replacement or differentials, health care benefits, and retirement or pension benefits to coal miners, coal-fired power plant workers, and oil refinery workers for five years. Note that a much broader set of workers will be affected, including coal transportation workers and support workers, as well as other fossil fuel workers as the nation move toward decarbonizing the economy.
• $3.7 billion for flexible educational and training benefits for dislocated workers, up to a four-year university degree.
• $7.3 billion to support post-secondary educational benefits for children of dislocated workers as a way to help alleviate generational poverty.
• Congress also could consider including a tax credit for utilities that retain workers as coal plants close, along with direct support for workers similar to the benefits provided in the Paycheck Protection Program established by the coronavirus aid package. These benefits would need to be designed so as not to create perverse incentives to keep coal-fired power plants running.
• Coal communities also will need direct support in the form of temporary replacement of tax revenue provided by coal mines and coal-fired power plants, which are often located in rural communities.
• The federal government must build on the initial work of the Interagency Working Group to create a federal coordinating body and ensure that federal agencies are aligned and easily accessible by communities. Another need is the creation of community transition hubs.

Congress must ensure that the full suite of investments outlined in the $3.5-trillion Build Back Better Act are included—and it must do more. Simply put, the burden of transitioning to a clean energy economy should not be borne by workers and communities that have sacrificed for generations to keep the lights on.

UCS supports many elements of the bill, but I’ll focus in on one of the groundbreaking pieces—the Energy Veterans title, which would invest in the coal workers and communities facing the consequences of shifting to cleaner forms of energy. The proposal represents a bold vision for making these workers and communities whole in the face of the urgency of climate change.

Leadership

Long a champion of pricing carbon emissions to tackle the climate crisis, Sen. Whitehouse understands that the transition away from coal will have a profound impact on those workers and communities that depend on coal for jobs and economic livelihoods. And he understands that workers and their families have sacrificed for generations in order to help keep the lights on—referring to them as energy veterans to emphasize that we should collectively respect them for their service to the nation.

The benefits and resources outlined in the bill represent the boldest proposal to date to support the workers and communities who will otherwise be left behind in the shift to clean energy. Although challenging, it’s critical to acknowledge the negative impacts of the policy and address them head-on. That means ensuring well-funded and sustained resources for coal workers and communities—resources that must be included no matter how Congress ultimately decides to address climate change.

Supporting energy veterans…

The reality is that the transition away from coal-fired electricity is already happening. The problem is that the transition is happening haphazardly, without much planning or forethought. This lack of planning is leading to devastating consequences for workers and communities. Our recent report with the Utility Workers Union of America articulated a robust and comprehensive set of policies and showed that the cost of these resources is affordable relative to large investments made by the government in times of crisis. We argued that providing income support for dislocated workers gives them the time they need to prepare and plan for what comes next. The key is providing wage replacement for a period of time, which gives individuals the flexibility to make informed choices, rather than to rush to take the quickest training program that would land them a new job.

The Whitehouse-Schatz bill takes a page from our report. It specifically:

• Creates a new coordinating office in the Department of Treasury charged with distributing benefits and resources, establishing local field offices to assist affected workers and communities, and (importantly) coordinating support among federal agencies;
• Provides five years of full wage replacement for laid-off coal miners and coal-fired power plant workers;
• Ensures workers continue to receive health care coverage for five years following the loss of a job;
• Ensures laid-off coal workers continue to receive expected employer contributions to retirement funds or pensions for five years, to ensure that they can retire with dignity; and
• Establishes a program akin to the post-9/11 G.I. Bill that would provide flexible educational benefits to the affected workers as well as their children.

… And coal communities

The bill specifically:

• Provides temporary replacement of lost tax revenue for local and tribal governments facing a closure of a major facility;
• Invests in reclamation of abandoned mines and facilitates the remediation of coal ash ponds—because cleanup of legacy pollution not only creates local jobs but sets up the community to diversify its economy and grow new businesses;
• Increases funding to federal agencies and programs that support community economic development, including the Appalachian Regional Commission and the Economic Development Administration; and
• Invests $30 million per year for ten years in rural broadband—a critical enabling infrastructure investment for economic development.

The time for bold action has come

We often talk about the need for bold action on climate change. But here’s the thing—the pain of shifting to a clean energy economy should not fall entirely on the people and communities that rely on coal. Through no fault of their own, the energy landscape has shifted, and they deserve a fighting chance to thrive. This bill would offer coal workers that chance—and lawmakers must include robust, well-funded provisions like these as they work to tackle climate change, whatever ultimate policies are enacted to drive down heat-trapping emissions.

Just take a look at Adams County, Ohio, which in 2018 faced the closure of two coal-fired power plants, by far the largest employer in the county. Community leaders faced a sharp drop in tax revenue, and individual workers suddenly had to figure out how to provide for their families while staying in the communities they called home. The people harmed by the upheaval are the very men and women—energy veterans—who have done the difficult and dangerous jobs to help keep the lights on.

A new analysis by the Union of Concerned Scientists—and co-created with the Utility Workers Union of America—offers a blueprint for how to prevent many more communities in the United States from suffering the same fate. We identified and quantified a set of comprehensive and robust resources that are needed so that workers have the time necessary to prepare for new jobs with family-sustaining wages. Climate advocates must fight for supporting our energy veterans alongside bold action to address the urgency of climate change.

What’s needed

Coalitions have created resources like the National Economic Transition platform and the BlueGreen Alliance Solidarity for Climate Action that specify in detail the broad range of policies and resources that both workers and communities need to move forward. Our list of priorities for workers builds on those efforts. Specifically:

• Dislocated workers would be eligible for five years of comprehensive wage and benefit replacement—which includes continued health care coverage and employer retirement contributions. Five years allows individual workers time to plan and train for new career opportunities while continuing to support their families.
• Dislocated workers and their children would be eligible for free educational benefits, which could take the form of a 4-year university, a 2-year community college, or any number of vocational and technical education programs. The post-9/11 GI Bill offers a precedent.
• Workers would be presumed eligible for programs like the Adult and Dislocated Worker Programs at the Department of Labor, allowing them to access training programs and job placement services.
• Additional supports are also needed. Workers should be able to access mental health and counseling services, as well as relocation allowances when appropriate in individual circumstances.

Our analysis demonstrates that the cost to provide these resources to the workers who will face job losses before reaching retirement age ranges from $33 billion (over 25 years) to $83 billion (over 15 years). (The lower cost estimate is reflective of the fact that more workers will reach age 65 over the longer lifetime of the program and therefore fewer will need support; see assumptions table.)

These figures represent only a tiny fraction of the trillions of dollars that must be invested in the country’s energy system over the next three decades to meet our science-driven goal of net zero CO₂ emissions by midcentury. And the United States has demonstrated its willingness to invest in recovery in the face of a crisis, as we did during the pandemic and following the Great Recession. The tables show the range of costs for each benefit we identified, as well as the key assumptions we made.

Coal has a broad geographic reach

We also looked at which places have been or are likely to experience job losses and economic impacts from the decline of coal. We identified ten risk criteria composed of recent declines in coal mining, recent plant closures, current jobs, future plant closures, and economic indicators like unemployment and poverty rate. The report goes into detail about the criteria, the technical appendix splits out the map for mining and power plant counties, and my colleague James Gignac has zoomed in on three Midwestern states.

Fight for our energy veterans

The coal industry, and the jobs and economic activity that it supports, has reached a moment of reckoning. The reality is that coal will not return to its heyday; the industry will continue its decline simply because cheaper and cleaner technologies are widely available and rapidly scaling. This underscores the urgency of supporting and respecting our nation’s energy veterans. We must acknowledge that thoughtful and intentional planning and comprehensive support are critical to honoring the workers and communities that have sacrificed so much to build this country. The fact is that this shift is already happening, leading to devastating consequences for families and communities. We owe far more to those who have given us so much.

In the context of the shift to a clean energy economy, how does the plan help workers and communities dependent on the coal industry?

Broad scope

Coal workers and the places where they live and work are being left behind in the transition to a clean energy economy. Over the last decade, this trend has been driven by economics as cheaper and cleaner forms of electricity are increasingly available and cost effective. But this transition is happening largely without forethought or planning, leaving workers and communities facing the resulting economic upheaval. In many of these (largely rural) places, the coal mine or power plant is the area’s biggest employer by far, and it provides high paying jobs with good benefits. As we collectively push to accelerate the transition away from fossil fuels to meet President Biden’s goal of 100 percent clean electricity by 2035, we must not leave these workers and communities to fend for themselves.

And Mr. Biden’s plan names this right up front:

And, the plan invests in rural communities and communities impacted by the market-based transition to clean energy.

But comprehensive solutions require a very broad set of policies and programs that cross a wide range of issues (and, not unimportantly, Congressional committee jurisdictions). The National Economic Transition platform articulated by leaders from coal communities, Tribal nations, and labor unions (and which included UCS) is an excellent overview of the breadth of policies and robust investments needed to make these workers and communities whole. How did Biden’s plan measure up?

Transformational ideas

There is a lot of excitement (see here) around the American Jobs Plan and its stated commitment to rural communities. One critical aspect of encouraging economic development is broadband access—and the plan would invest $100 billion over 8 years to ensure affordable broadband access for all Americans. It’s difficult to overstate the importance of reliable access to fast internet as an enabler of the jobs of the future, access to remote work and education opportunities, and more.

Biden’s plan would also invest $56 billion through grants and low-cost flexible loans to modernize drinking water and wastewater systems focused on improving infrastructure in rural America. Flint, Michigan comes to mind when we think of drinking water (and the plan separately calls for $45 billion to replace all lead service pipes nationwide), but water infrastructure is in critical need of improvement nationwide. For example, Martin County, Kentucky, loses as much as 70 percent of its drinking water simply due to leaks in the system.

And the plan proposes $12 billion for the nation’s community colleges—locally and regionally based institutions that can help train workers for the jobs of the future.

Tell me more

A number of additional buckets of investments in the plan caught my eye—but the details of how they are implemented and prioritized will be critical to their ultimate success.

For example, the plan proposes $16 billion for plugging orphaned oil and gas wells and reclaiming both hard rock and coal mining sites. It doesn’t specify the breakdown in cleaning up these sites, but it’s likely that this amount is insufficient to meet the needs. And these investments create jobs, often in the places where jobs are being lost. The $5 billion addition to the Superfund and brownfields program is a similar story—much more money is needed to clean up a backlog of sites.

In terms of economic development, the plan names a number of programs that are critical to communities in transition: the Appalachian Regional Commission’s POWER program, the Economic Development Administration’s Public Works program; and community revitalization programs at HUD and USDA. But there is no mention of funding levels for these programs—something I’ll be looking for in the upcoming budget request to Congress.

Maybe the biggest question mark in my mind is how the money for workforce training will be used and prioritized. The plan calls for a new Dislocated Worker Program at the Department of Labor funded to the tune of $40 billion, and it proposes $48 billion to “workforce development infrastructure and worker protection,” with a focus on creating apprenticeship opportunities. A lot of important pieces of the puzzle are packed into this bucket, ranging from career pathway programs in middle and high schools, to community college partnerships, to enforcement of labor standards. But how will the different programs and initiatives be prioritized? Will there be an explicit focus on workers who lose their jobs in the shift to a clean energy economy? If so, will they be eligible for wage replacement or wage insurance? (One study suggests that the lack of income during training programs is responsible for poor economic outcomes among participants in training programs.)

Omissions

The plan is silent on a number of topics that are important to a successful transition. There is no mention of the impending insolvency of the Black Lung Disability Trust Fund (or the extension of the coal excise tax needed to at least partially address it). There is no mention of the need to remove loopholes from our nation’s bankruptcy laws that allow companies to get out of their responsibilities to workers and the environment. And there is no mention of the need for structures to ensure federal coordination of resources aimed at helping communities and workers, building on the creation of the Interagency Working Group created on January 27. And a big missed opportunity is the lack of mention of loan forgiveness at the Rural Utilities Service, which could be used to help rural electric cooperatives wean themselves off coal, provide transition assistance to communities and workers, and save customers money.

Now comes the hard part

Moving forward, we will all need to push harder to strengthen the plan and, more importantly, to make it real. It’s clear the American Jobs Plan is a strong opening bid—and the details of how the money is invested and which pieces are prioritized will determine the long-term outcomes and impacts. But most importantly, Congress must pass it. Until President Biden signs his name on the dotted line, none of this (the American Jobs plan, the president’s speech, and my little blog) are anything more than words. Strong words, but still just words. It’s going to take all hands on deck to make the plan a reality.

I’m excited to say that after many years of inaction, we have finally reached a point where actual legislation is being written to address these thorny issues. Here I’ll focus on just one piece—ensuring that the federal government coordinates its resources and programs to work towards a common end.

The critical need for coordination

Ensuring a fair transition for coal workers and communities requires a comprehensive, robust, and sustained set of investments and policies. UCS joined coal community, tribal, and labor leaders in the creation of the National Economic Transition (NET) platform, which articulates that comprehensive set of solutions. These include local leadership, economic diversification and planning, workforce development and education/training, reclamation and remediation, infrastructure investments, bankruptcy reform, and (the subject of this blog) federal coordination. New programs and resources must be created to address these wide-ranging issues, but existing programs can be a starting point.

The issue is that a range of federal programs supporting workforce development, economic development, and related issues are spread across more than 12 federal agencies and departments, each focused on specific subsets of the broader issue or on particular geographies. That’s why the NET coalition immediately urged the Biden administration to set up a federal coordinating office focused on coal transition.

On January 27, 2021, President Biden signed Executive Order 14008, “Tackling the Climate Crisis at Home and Abroad”—and it included the establishment of an Interagency Working Group (IWG) on Coal and Power Plant Communities and Economic Revitalization (see sections 217-218), comprised of leaders from 12 different federal agencies and departments. The charge of the IWG is to “coordinate the identification and delivery of Federal resources to revitalize the economies of coal, oil and gas, and power plant communities,” as well as to develop strategies to implement policies such as pollution cleanup and to assess ways to ensure benefits and protections for coal and plant workers.

Why do we need a White House-level coordinating office? White House leadership is essential for bringing federal agencies together and aligning resources and programs to work toward a common end—centered on the very localized problems that we are trying to address.

What would it do, aside from writing reports?

Sure, reports are interesting and important, and more are needed on this topic, but how would this new coordinating office work and what would it do? One portion is the IWG (or task force) made of high-level leaders from all relevant agencies to ensure coordination. But equally as important is engagement with actual people and communities affected by the energy transition.

That’s why we call for the creation of a stakeholder advisory board or committee made up of representatives of affected communities and experts, including unions, community leaders, workers, environmental justice representatives, and utilities (similar to the structure of the Colorado Just Transition Advisory Committee). This group would be tasked with visiting communities already hit hard or facing the decline of coal, listening to the concerns raised and the needs articulated, and developing recommendations to feed into the IWG (similar to the Canadian Task Force on Just Transition).

Finally, communities and workers facing the fallout from the closure of a coal mine or coal-fired power plant should not have to navigate the federal bureaucracy to identify and apply for resources. Instead, the new White House office should support and engage directly with community-based “hubs,” which would ideally be housed within locally trusted institutions, such as community colleges or non-profit organizations. The hubs could be funded through a grant program managed by the new office.

All three of these elements and functions are critical to ensuring that the new White House office actually serves the needs of workers and communities.

Codifying into law

The transition away from coal, already well underway, will continue over the next decade or longer. Meanwhile, successful economic diversification and development efforts can require decades of sustained attention and resources. While the IWG established by President Biden’s EO is an important step, it is critical that the broader coordinating office be enshrined in law so that it can provide durable support across multiple administrations and withstand the inevitable shifting political winds.

Fortunately, policymakers are listening. The NEW PROMISE Act introduced by Rep. Tom O’Halleran (D-AZ-01) includes a provision to create a White House Council on Energy Transitions that would serve the role of the coordinating office, conduct outreach to affected communities, and incorporate recommendations from a stakeholder-led advisory board. Unfortunately, as introduced, the Council would focus only on coal-fired power plants and not coal mining communities, unless those mines are directly connected to a plant facing closure. But the bill contains additional important elements of a fair transition—including temporary replacement of lost tax revenue for communities.

The CLEAN Future Act, introduced by leaders of the House Energy & Commerce Committee, includes a provision establishing a White House Office of Energy and Economic Transition to house the coordinating task force and the stakeholder advisory committee. It would also manage grant programs to support communities facing lost tax revenue and to create community hubs to support workers with new resources.

A precedent for a National Coordinating Office with analogous funding levels

The idea of a White House coordinating office is not a new one. For example, the Office of National Drug Control Policy (ONDCP) is housed within the Executive Office of the President and is charged with developing a national strategy on a public-health based approach to reducing substance use disorder and coordinating and aligning budget resources over 16 federal agencies. In addition, the office manages two grant programs to support community-led initiatives.

What would it cost to fund the new coordinating office? Over the last five years, ONDCP has been funded at $18 to $20 million annually, which supports approximately 60 full time equivalent employees (FTEs). The new coordinating office would support the stakeholder-led advisory committee in addition to the interagency task force, so it would likely need to be funded at approximately twice the level of ONDCP. Indeed, Rep. O’Halleran’s bill would authorize $50 million annually through 2035.

But that $50 million per year would only cover the operating budget of new office. As noted above, the new White House office could also manage grant programs for affected communities to supplement and enhance programs available through other agencies—filling gaps like funding and supporting the community hubs. ONDCP offers a precedent for this as well—it currently manages two grant programs (one focused on supporting law enforcement and public health efforts to reduce overdoses, and the other focused on community-led efforts to reduce youth substance use) which together are funded at about $400 million annually.

Another important analogy can be drawn with the Congressionally mandated Base Realignment and Closure process used by the Department of Defense (DOD) to make more efficient use of resources and manage closures of military institutions, which in many cases are significant drivers of local employment and economic activity. Recognizing this, the DOD’s Office of Economic Adjustment, or OEA (newly renamed the Office of Local Defense Community Cooperation) provides assistance to affected communities and serves as a connector to additional resources in other federal agencies. OEA received $280 million over five rounds of closures from 1998 to 2005, and affected communities typically receive $400,000 to $500,000 per year for three to five years (see the Commission’s 2005 report, Appendix S, p.698).

Conclusion

The IWG is an important and welcome first step, but there is much more work to do. And the problem is acute and urgent—the transition away from coal is accelerating and so far proceeding without thoughtful planning for the communities and workers being left behind. I see the establishment by law of a new White House Office of Energy and Economic Transition as a critical down payment on supporting our nation’s coal workers and communities — and eventually a broader set of workers and communities — as we work to reach net zero CO₂ emissions by 2050. The Biden administration and Congress must establish this new office to ensure that the long-term coordination and structures will be in place to support workers and communities in the transition to a clean energy economy.

Policy principles abound

Two platform documents in particular offer consensus principles about how to solve the climate crisis while centering workers and communities. The BlueGreen Alliance (a coalition of labor unions and national environmental groups) released its Solidarity for Climate Action platform in the summer of 2019. The platform is significant because it represents strong ambition and new commitments from both labor and environmental interests—groups that sometimes find themselves on opposite sides of the fence.

Second, the Just Transition Fund led the development of the National Economic Transition platform, released in the summer of 2020. This document is similarly consequential precisely because of the coalition of groups that developed it: affected community groups in Appalachia, the West, and tribal nations, along with affected unions. (Full disclosure: I served on the team that developed the platform and was the only representative of a national environmental organization.) The NET platform outlines the pillars of a comprehensive and robust set of priorities for investing in and supporting coal workers and communities as the coal industry continues its inexorable decline.

Where to start?

President Biden should signal on Day One that he is committed to doing right by coal workers and communities. To be clear, I don’t mean simply a compelling speech (although a high-profile message and event to elevate the issue are critical). Mr. Biden must take concrete action immediately after taking office and empower senior appointees to advance the issue. This should take the form of a coordinating body that is charged with driving federal agencies to work together to align programs and goals for the benefit of Coal Country (by which I mean all regions of the country that are dependent on coal mining and coal-fired power plants as economic drivers). This coordinating body should be housed within the White House and work closely with the National Economic Council, which typically implements the President’s economic policy agenda.

One of the reasons the problem of transition is so intractable is that programs and initiatives on economic development and workforce training are spread across at least eight different federal agencies in the alphabet soup of Washington. This coordinating body should house a task force made up of a dedicated senior staff person in each relevant agency whose sole job it is to engage on this issue and work with their counterparts in other agencies.

That alone is a herculean task, as anyone who has worked in government well knows. But even that is insufficient. The new administration must simultaneously recognize that direct engagement with affected communities is critical to success. Importantly, the administration must not approach this with a check-the-box mentality—instead, it must create a space for listening and learning from community expertise, and then using that information and advice to shape its policies and priorities on transition. One key insight that can be named at the start: policies and programs aimed at supporting communities and workers must be flexible and place-based—there is no workable one-size-fits-all approach. The President’s team can also take a page from the Colorado Office of Just Transition, which established an advisory committee made up of affected stakeholders (including labor representatives, utilities, coal communities, affected workers, and disproportionately affected communities) to listen to the concerns of affected communities and develop recommendations based on that input. Canada similarly commissioned a task force to travel to coal communities and host a series of listening sessions. The Biden team should establish an advisory committee made up of affected community stakeholders to develop recommendations, visit affected communities, and truly listen to what they hear.

But listening is only the first step to developing trust. Community leaders have tremendous experience about what works and doesn’t work on the ground. People are rightly skeptical of yet another government program that might as well be more empty promises. The senior advisors that Mr. Biden appoints would do well to listen to these experts and change the way the federal government does business. These community voices should have a strong role in shaping the nation’s economic transition plan for coal communities.

What to do?

Once the new administration sets up these structures, what next? The NET platform offers a blueprint for the wide range of needs that must be addressed to ensure a comprehensive approach to the transition away from coal:

• Invest in capacity building. In the spirit of listening (as noted above), the government must find ways of investing in local leadership, institutions, and capacity. Government programs and philanthropy alike tend to focus on grant programs for project development or technical assistance but are often unwilling to fund operational costs that keep the lights on and sustain the effort.
• Protect workers. The people working in coal mines and coal-fired power plants have their lives turned upside down with the closure of those facilities, too often with little advance notice. Given the weak social contract in the United States, these workers need a comprehensive set of supports to weather the storm: 5 years of wage replacement (or wage insurance), continued healthcare, preservation of pensions and retirement contributions, retraining or educational opportunities, job placement assistance, counseling services, and more. And we must ensure that miners with black lung receive the benefits and medical support they have earned.
• Drive economic development. We must invest in local leadership, entrepreneurs, and small businesses. The federal government must recognize that solutions to the turmoil in coal country must be flexible and place-based—what works in one place won’t work in another. And it is critical to note that successful economic development takes decades and that policymakers must treat these initial investments a down payment.
• Clean up the mess. The vast environmental damage from the mining and combustion of coal must be cleaned up if communities have any hope of diversifying their economies. This includes mine reclamation (noting that different issues emerge in Appalachia vs. the West and in surface vs. underground mines) and coal ash ponds. With the right incentives and requirements, the cleanup of legacy pollution can create both an environmental win and an economic win, creating jobs for dislocated workers as they evaluate options for the longer term.
• Invest in infrastructure. The crumbling and missing infrastructure in coal communities is a major impediment to economic development. Things like water infrastructure, broadband access, health care facilities, and more are lacking in these communities, especially those that are more rural. In the Navajo Nation, many homes remain without electricity even as massive transmission lines over their heads transport the electricity generated on Navajo land to cities in the West. The good news is that infrastructure investments create jobs in these communities. The administration must press Congress to prioritize these communities in any opportunity to advance infrastructure legislation and investment.
• Reform bankruptcy laws. Coal companies continue to shirk their responsibilities to the workers that made them rich and to take advantage of federal loopholes and lax state enforcement to avoid cleaning up the damage to the environment. Dropping these obligations by taking advantage of weak bankruptcy laws is part of their “vulture capitalism” business plan and flatly should not be allowed. We must collectively demand and require more from an industry that does not prioritize the health and safety its workers but constantly touts its contributions to job creation.

Obviously, the Biden administration will not be able to solve all of the problems in Coal Country right out of the gate. But it could and should prioritize early success to demonstrate its commitment to these issues. Setting up the White House office, organizing and coordinating federal agencies, and setting out to listen to affected communities are a great start—as is prioritizing increases in existing federal programs in its first presidential budget request. Failing Congressional appropriations, the Biden administration can use executive authority to drive specific programs and investments, building on and expanding what President Obama did with the POWER Initiative.

But ultimately Congress will have to step up and deliver real solutions for coal communities instead of false rhetoric about restoring coal jobs. Many if not all of these priorities require Congressional authorization and, most importantly, appropriations. A few tens of millions of dollars won’t cut it—we need bold and visionary investments in the future of these communities. After sacrificing for generations for the good of the nation, coal communities, workers, and their families are ready to cash in the IOU.

A commitment to coal communities

Solving this problem of large numbers of people at risk of being left behind in the transition to a clean energy economy is not just the right thing to do for people and families who have sacrificed for generations to keep the lights on—it is a necessary set of investments to ensure that the federal climate solutions we have been fighting for will be durable over time. Simply put, more people must be bought into the need for action in order to make robust climate policies stick. This means showing a real commitment to workers and communities by demonstrating real progress in a short time. President-elect Biden has consistently talked about the potential for action on climate change to create domestic union jobs, and it’s time to put that commitment into action. It won’t be easy. Let’s get to work.

After lobbying by the Chamber of Commerce, the administration initially dragged its feet in using the authority granted by the Defense Production Act to manufacture ventilators and much-needed personal protective equipment (PPE) in short supply to protect frontline workers. This left health care providers to fend for themselves. On April 2, the administration finally used emergency authority evidently to outbid states and hospitals trying to obtain critical supplies and confiscating shipments of supplies to states.

As the pandemic reached meat processing facilities, causing more than 10,000 infections and the deaths of at least 45 workers, the administration decided to use that emergency authority to force those facilities to continue production. But without adequate safety protections for the workers in those facilities. In other words, as my colleague Derrick Z. Jackson put it, “meat is critical infrastructure; workers, no so much.”

The president himself is now receiving daily testing and practicing some social distancing. It would appear the White House understands how to protect against the virus but has taken no real steps to extend life saving protections to working people.

Given that, Congress must require that the Occupational Health and Safety Administration (OSHA) immediately institute a temporary emergency standard that requires employers to ensure their workers are protected from the virus.

As I argued in my last post, the workers and communities that depend on coal for their economic livelihoods need deliberate, sustained, and comprehensive action to ensure that they recover from the economic devastation left behind by the pandemic. The COVID-19 crisis has touched all Americans in some form or another, but it has laid bare the reality that the most vulnerable among us—communities of color and working class folks—are hurting the most and dying more often. That is simply unacceptable.

As UCS does its part to lift up the voices of our most vulnerable communities, to protect working people, to push for including climate resilience, clean energy, manufacturing, and energy efficiency in economic recovery, to highlight the importance of protecting clean energy jobs in communities of color, and to fight to protect our democracy, here are some policies that Congress should adopt right away to help coal communities.

Immediate needs to protect workers

Below are some specific and targeted policies for coal workers that Congress should include as part of legislation designed to address the immediate crisis:

• Enact the COVID-19 Every Worker Protection Act (H.R.6559), which would require the Occupational Safety and Health Administration (OSHA) to issue an emergency temporary standard to protect workers from exposure to COVID-19 in the workplace.
• Because coal miners would not be covered under that proposal since their workplace protections are governed by the Mine Safety and Health Administration (MSHA), Congress must similarly require MSHA to issue a temporary emergency standard to protect coal miners from contracting and spreading COVID-19.
• Ensure that black lung clinics have adequate funding to meet the needs of coal miners suffering from black lung—people who are at much higher risk of complications or death from COVID-19.

Put workers first, not companies

Congress must continue to reject the egregious request of the National Mining Association to absolve its member companies of their collective responsibilities to workers and the environment. On the contrary, Congress should ensure stability of these programs through:

• Extending the excise tax on coal production for ten years to support the Black Lung Disability Trust Fund (R.3876).
• Reauthorizing the reclamation fee for 15 years that supports the Abandoned Mine Lands (AML) Fund by passing the Surface Mining Reclamation and Control Act Amendments of 2019 (R.4248). The government estimates that there is more than $10 billion in remaining cleanup needs for pre-1977 abandoned mines.

Furthermore, Congress should leverage the AML for driving economic development in coal communities through cleaning up abandoned mines:

• Release existing money from the Abandoned Mine Land Fund to clean up abandoned mines and spur economic development on reclaimed land by including the RECLAIM Act (R.2156), which has already passed the House Natural Resources Committee with bipartisan support. The bill would distribute $1 billion in existing funds for coal communities from the AML Fund and create about 4,600 jobs over 5 years.

Preparing the workforce for new opportunities

As I described in my last post, coal communities need attention in economic recovery efforts. The Great Recession provides an example; establishment of new businesses since the Great Recession was concentrated in urban centers and suburbs, and employment growth was much slower in rural areas compared to urban areas.

So as these communities rebuild their economies from multiple crises—both the pandemic and the structural decline of coal—they will need robust and sustained support from the federal government to help drive community-led solutions. Federal programs across multiple agencies support worker retraining efforts and economic development in communities, programs that will be crucial to the hardest hit rural communities in recovering from the economic downturn. Here are some initial steps Congress should take in designing economic recovery packages:

• Authorize the Office of Economic Impact, Diversity, and Employment within the Department of Energy (DOE), as proposed in Title VIII, Subtitle C of the 2020 CLEAN Future Act, to ensure that dislocated and unemployed energy workers and underrepresented groups have access to training and apprenticeship programs in the energy and manufacturing sectors.
• Ensure robust workforce development and training programs in the states by increasing funding for the Employment and Training Administration which administers the Workforce Innovation and Opportunity Act and by increasing community participation.
• Increase funding for worker training programs and community economic development programs across the federal government. Federal efforts to respond to the economic crisis should incentivize community workforce agreements, apprenticeship programs, and project labor agreements that focus on creating job opportunities for historically disadvantaged and underrepresented workers.
• Increase funding for the National Institute of Environmental Health Sciences (NIEHS) Worker Education and Training Program and the Department of Labor’s Susan Harwood Training Grants program.

Investing in community and economic development

Federal programs across multiple agencies support worker retraining efforts and economic development in communities, particularly those reeling from the decline of coal, and these programs will be crucial to largely rural communities in recovering from the economic downturn. Congress must double-down on these programs to ensure that communities have access to critical resources. Two big priorities are:

• Increase funding to at least $400 million per year for the Partnerships for Opportunity and Workforce Economic Revitalization (POWER) Initiative within the Appalachian Regional Commission. The POWER Initiative was funded at $50 million per year from FY16 through FY19, and requested funds were more than six times this level in FY18.
• Increase funding to at least $100 million per year for the Assistance to Coal Communities (ACC) program at the Economic Development Administration within the Department of Commerce. ACC was funded at $30 million in FY17 through FY19, up from $10 million in FY15 and $15 million in FY16. EDA will need additional appropriations to build capacity to distribute these grants.

Prioritize coal communities in infrastructure development and environmental cleanup

Coal communities, particularly in rural regions in Appalachia and the West, as well as tribal communities have been left behind in the development and maintenance of modern infrastructure systems. I offered some personal stories that exemplify these problems in my last post. House leaders had initially proposed a $760 billion infrastructure package at the beginning of the year, and there is talk of including infrastructure spending in future recovery packages. As policymakers debate the scale and extent of infrastructure investments, they must

• Prioritize the infrastructure needs of rural communities through investments in health care (especially tele-health), broadband, distance learning, and water delivery and wastewater treatment systems.

Environmental cleanup remains a barrier to long-term economic development in many coal-dependent communities. The EPA Brownfields program provides grants and technical assistance to communities, states, tribes and others to assess, safely clean up and sustainably reuse contaminated properties. This program is extremely important for community revitalization and economic development, and it also helps create jobs in communities.

• Increase annual funding for EPA’s Brownfields redevelopment program to $2 billion to support economic development and sustainable approaches to local land use. Brownfield redevelopment must incorporate community-driven planning and protect against community displacement.

But even more must be done. For example, coal ash is a by-product of burning coal, and leads to contaminated groundwater and polluted waterways. Cleaning up all that pollution could create jobs—especially for the folks that will begin to lose their jobs as more coal-fired power plants close.

Finally, UCS has been advocating for clean energy priorities as part of the economic recovery effort, and some of these could help coal communities if designed well. These include:

• Reauthorizing the DOE’s Energy Efficiency and Conservation Block Grant Program (EECBG) to support energy efficiency and conservation projects in local communities across the country, spurring job growth and saving consumers money.
• Establish a “National Green Bank” to provide low-cost financing for clean energy and climate resilient infrastructure projects and include dedicated investments that directly benefit low-income communities, communities of color and coal communities.

First steps

These policies represent a necessary first step in helping rural America, especially coal-dependent communities, recover from the pandemic and the resulting economic crisis. But it is only a first step, and policymakers must remember that true recovery will require sustained funding and consistent policy that empowers local communities. And keep in mind that the extent of the economic suffering has not yet been realized. Analysts were abuzz as oil prices briefly went negative last week, but what will the crisis in the oil and gas sector mean for workers on the ground?

Creating a new, clean, sustainable economy out of the ashes of the old one will require visionary action. More to come.

Pretty much everyone around the globe has been affected by COVID-19. We’ve all had our lives turned upside-down by the unprecedented response to the pandemic. As of this writing, about 316 million Americans are subject to “stay at home” orders. By the time this thing is over, we’re all likely to have known someone who died of the disease. And while New York City is currently the epicenter of the crisis, it’s clear that the virus is about to overwhelm large swaths of rural America.

Before COVID-19 was dominating the news and our lives, I was doing research into what Congress should do to ensure that coal workers and coal communities have a fighting chance to be a part of the low-carbon economy. But the policy landscape has changed in just a few weeks. In the last five weeks, 26 million people have filed for unemployment, which shattered previous records, and projections (that notably don’t account for the recent stimulus package) suggest unemployment could reach 32 percent, higher than during the Great Depression. Attention has turned—rightly so—to the pandemic, first responding to critical needs of front-line workers and next to economic recovery.

Frontline and essential workers must be protected from contracting and spreading the virus

Much has been written about the need for personal protective equipment (PPE) for health care workers and frontline workers like cleaners, grocery store employees, and delivery people. It’s worth emphasizing that this is still something we should be focused on—we must protect these workers from getting sick in order to continue to provide crucial services for everyone.

But we must be more deliberate about other workers who have also been deemed essential, like energy workers. For example, coal miners and power plant operators have continued to work during the pandemic, even though physical distancing is difficult in the close quarters that these workers experience. The Mine Safety and Health Administration should issue a temporary emergency standard to protect coal miners from the virus, instead of the weak guidance it has so far offered, and the Occupational Safety and Health Administration should do the same for all frontline and essential workers.

So, job number 1 is saving lives and keeping our heroes safe. But in the coming weeks and months, policymakers will appropriately turn toward reopening the economy and driving long-term economic recovery. Why should they think specifically about coal communities and coal workers?

The coal industry may not recover from the pandemic

It’s no secret that coal is in structural decline. The chart below from the Energy Information Administration shows the steep decline in coal-fired electricity generation since 2010 that coincides with a steady rise in natural gas-fired generation and renewable energy.

Source: Energy Information Administration, Monthly Energy Review.

Natural gas prices have remained at historic lows for much of the past decade because of the boom in hydraulic fracturing. Electricity demand has remained flat for over much of the same period. The cost of renewable energy like wind and solar has plummeted, and that trend is set to continue. More than 100 GW of coal-fired generation capacity went offline in the 2010s as many of these generators were older and uneconomic relative to gas (and to an increasing degree, renewables), and many were heavily polluting and not worth investing in emission control equipment to reduce public health impacts. And as the next chart shows, EIA projects that renewable generation will surpass both coal and nuclear by 2021.

That was before the pandemic.

The ongoing crisis could speed up what has already been a slow-moving train wreck for the coal industry.

EIA is now projecting that the pandemic will drive total electricity demand to fall by 3 percent in 2020—but with a 20 percent decline in coal generation over last year. Thanks to a warmer winter than usual, as of the end of January, almost 84 percent of coal-fired generating capacity had enough coal stockpiled on site to run for more than 60 days. As less coal is burned to produce electricity, more piles up at the plants, putting pressure on mines to reduce production. In that same report, EIA also projects a 22 percent decline in coal production in 2020 compared to 2019.

These trends are already having an impact. Some producers are idling operations and declaring bankruptcy. At the end of March, bankrupt Murray Energy, the nation’s 4^th largest coal producer, requested that a bankruptcy court waive its required payments for retiree medical costs of about $6 million per month because the company is on the verge of liquidation, after it failed to receive a single bid for its assets during bankruptcy proceedings. According to its website, Murray employs almost 7,000 people and operates 17 active coal mines. At least some of these mines could continue to operate even if the company is liquidated.

Because the economic position of coal relative to cleaner forms of energy is challenging and shows no sign of changing, coal mining companies are having trouble accessing capital and financing debt. As Murray is showing, this is now true even in bankruptcy. Even if gas prices rise later this year (as projected), coal mining companies may be too battered following a decade of decline and a pandemic to take advantage.

To be clear: this is absolutely not an argument for bailing out coal companies. The administration has tried repeatedly over the last three years to save the coal industry, and it has not reversed the decline. The pandemic is amplifying the structural headwinds facing the coal industry, and policymakers simply can’t change that with bailouts.

More importantly, coal mining companies are generally bad corporate citizens. The National Mining Association is pleading with Congress and the administration to allow companies to weasel their way out of statutory requirements to provide health benefits for the workers who made their executives rich and to clean up the mess left behind from coal mining. Market dynamics do not favor the industry, which is why they are desperate to get out of taxes that support retirees and environmental cleanup.

The lost coal jobs will have an outsized impact on the communities they support

Policymakers must draw a clear distinction between the coal industry and the workers and communities that the coal industry supports. Coal miners, plant operators, and their communities will continue to need support and resources long after the pandemic fades.

As the coal industry continues its downward spiral, the communities that depend on coal for their economic livelihoods will have a tremendously difficult time recovering economically. For these places, where a coal-fired power plant or a coal mine is often the only major employer, extended unemployment benefits are a critical first step in responding to the economic crisis but are merely a band-aid on the longer-term economic outlook, both for individual workers and for their larger communities and regions. In 2019, approximately 90,000 people worked at coal mines and coal-fired power plants—jobs that pay family-sustaining wages and offer good benefits. These mines and power plants can be found in about 500 of the nation’s 3,142 counties, and many of the counties are rural and offer limited alternatives for dislocated workers.

Counties that produced coal in 2018 shown in orange (darker means more coal produced). Currently operating coal plants are shown with larger sizes indicating greater operating capacity in MW.

As the economy reopens gradually, the economic fallout from the pandemic could persist for many months. But the loss of coal jobs will continue to reverberate through many of these communities for years to come.

Coal communities will struggle to recover without additional support

The reality is that many of these communities, particularly those in Appalachia and on tribal lands, have been struggling for generations. Pulling these places out of poverty has proven to be exceedingly difficult, to say the least. Beginning with President Johnson’s War on Poverty in the 1960s, 50 years of government support has helped people and communities materially, but much more remains to be done. The demise of coal makes this job even more difficult—and underscores for policymakers the need to keep these communities in mind in crafting recovery packages.

Rural health care is collapsing, and the effects of this will be painful as the virus reaches those areas. The hospital where I was born closed its doors in mid-March, unbelievably, in the midst of the current pandemic. While some of us in cities can often work remotely and can see our health care providers via video conferencing, many folks living in rural communities do not have access to broadband that makes this possible. This became painfully obvious to me, sitting in DC with my 200 megabyte-per-second internet speeds, helping my mom troubleshoot her internet connection so that she could upload video lessons for her first-grade class. We were finally able to upgrade her connection from a lousy 1 megabyte per second to a whopping 9… and she lives barely a few miles outside of Charleston, West Virginia’s capital and largest city. And there are counties in central Appalachia that struggle to provide residents with clean water, relying on a shrinking base of customers to support those needed investments. Martin County, Kentucky, for example, loses up to 70 percent of clean, treated water because the pipes leak so badly. (Read that last sentence again; it is not a typo.)

Infrastructure needs in rural America are substantial and must be prioritized to enable long term economic recovery.

Let’s focus on workers and communities—no corporate bailouts

As someone from a third-generation coal mining family, I know well that the answer to the question, Is coal good or bad? is really, It’s complicated. But it is long past time for us to recognize, especially in Coal Country, that our future will not be like our past. Bailing out coal companies and providing golden parachutes for coal executives will not rescue the industry in the long term. These desperate times call for real solutions that benefit real people who live in real communities across the country.

Many organizations, advocates, and activists are fighting for an economic recovery that is just and equitable, and also clean and sustainable. The transition to a more sustainable economy will only worsen the economic landscape for coal, and we have a responsibility to ensure that these workers and communities are not left behind. My next post will explore how policymakers can begin to do just that.

National Mining Association shows its true colors

In the leadup to the passage of CARES, the National Mining Association (NMA) sent a letter to the president and leaders of Congress, asking for millions of dollars as part of the pandemic relief efforts. Stunningly, the NMA requested that Congress drop coal companies’ legal obligation to pay per-ton taxes on coal production that support the Black Lung Disability Trust Fund(BLDTF) and the Abandoned Mine Lands fund. It’s telling that the industry’s trade association decided to raise concerns about its tax liability, rather than the health and safety of tens of thousands of coal miners that have been deemed essential workers in the current crisis. The Washington Post yesterday published a story on this topic quoting actual coal miners—read their stories.

And these two funds are critical for former workers and the environment. The BLDTF is the last option for many sick miners that worked for now-bankrupt companies. Coal companies and executives literally get rich off the blood and sweat of coal miners. Even before the recent frightening increase in black lung cases in miners, coal companies took (and still take) drastic steps to avoid paying for medical care for the workers who made them rich, often tying up cases in administrative courts for years or even decades. Sometimes the miner dies before receiving benefits owed to them.

The Black Lung Fund – which supports people who are absolutely more susceptible to COVID-19, by the way — is on track to be over $15 billion in debt by 2050 thanks in large part to reduced industry tax rates on coal production. The AML fund supports cleanup activities on mines and still has over $10 billion in unfunded cleanup needs.

To be clear, NMA is expecting the taxpayer to pick up the tab, claiming these taxes are burdensome.

U.S. House Natural Resources Committee Chairman Raul Grijalva wrote a scathing letter in response to the coal mining industry’s jaw dropping audacity, writing:

“The coal industry is taking advantage of the country’s current circumstances to advocate for policies that are completely unrelated to the current crisis, policies that would in fact set back efforts to improve the health and lives of people across the country.”

And no mention of workers

Meanwhile, our nation’s coal miners have been deemed essential and continue to work but lack any federal protections to prevent them from contracting and spreading the virus. COVID-19 is far more dangerous than the common flu and must be taken seriously. It spreads through close contact with others, according to experts, and physical distancing combined with frequent hand washing is the primary tactic the CDC has recommended to limit the spread of the disease. But coal miners work in close quarters in tightly confined spaces while on the job (for example, crowding into elevators and coal cars that transport miners from the surface to the active mining areas), and hand washing is not exactly a priority when you’re covered in coal dust. This reality led the United Mine Workers of America to demand an emergency standard from the Mine Safety and Health Administration (MSHA) for how to protect coal miners from the virus while on the job. To date, MSHA has only offered “best practices” that advise workers to remain six feet apart and use hand sanitizer frequently if soap and water are not available.

That would seem to be an anemic response that falls short of requiring employers to protect their employees. It is more than a hypothetical exercise: coal miners at a massive mine in Pennsylvania recently tested positive for the virus, leading its operator Consol to shut down the mine for two weeks, and Virginia’s largest mine shut down to help avoid spreading the virus.

Congress must hold the line

You can bet that NMA will be making its case as Congress debates the details of the forthcoming economic recovery packages. Make no mistake—the trade association for the coal industry doesn’t give a damn about its workers, only its profits. Congress must ignore NMA’s greedy request to be relieved of its collective responsibility to coal workers and the environment.

What miners need – like all workers who must continue to work in service of society and humanity – are greater workplace protections against COVID-19.

No, friends, what I’m talking about is the preparation underway around the country in advance of state legislatures that will reconvene after the new year. Now is the time when many policymakers begin to draft new bills they plan to introduce, and when many advocates work to influence their choices.

To inform that process, Union of Concerned Scientists (UCS) just released a new policy brief, How to ensure energy storage policies are equitable, which offers a policy roadmap for clean energy champions to design ways to stimulate greater deployment of energy storage—in ways that put the needs and interests of communities first.

What is the opportunity?

Policymakers are beginning to see the potential for energy storage to help achieve ambitious clean energy goals to address climate change. Energy storage offers the potential to store energy and use it when it’s needed most. Because the electricity grid must constantly match the supply of electricity to the demand for electricity, the potential for widespread adoption of energy storage would offer flexibility in operating the grid—and the cost of one type of storage technology, lithium-ion batteries is falling fast.

Storage can score multiple wins, including reductions in climate-warming emissions, flexibility in grid operations and other reliability services, improvement in public health and air quality, community resilience, and reduction in expensive demand charges. The imminent rapid growth in battery storage represents an opportunity to incorporate equity into policy design at the outset, prioritizing storage applications that directly benefit communities.

UCS held a small expert convening in March 2018 to develop a set of recommendations on federal priorities for energy storage research, development, and deployment (RD&D). But it’s not just a question of research and whiz-bang technology (though innovation is critical to solving the climate problem)—it’s also of question of how to get more projects built. In that spirit, UCS convened a diverse group of stakeholders in December 2018 to discuss policies that drive energy storage deployment, but participants asked a different question: how can we deploy energy storage so that it puts the needs and interests of communities first? These discussions led to a set of consensus principles for energy storage that nearly all stakeholder attendees supported.

Photo: Wikimedia

Our new policy brief takes those principles several layers deeper, outlining specific considerations and recommendations that policymakers—both legislators and regulators—should incorporate when designing policies for energy storage and prioritizing underserved communities. And by “underserved,” we explicitly discuss the needs of frontline communities (those that are hit hardest and worst by climate change impacts), fenceline communities (those that bear the brunt of the health impacts from air pollution from power plants and industrial facilities), and fossil dependent communities (those that are hard hit by plant closures that lead to job losses and economic harm). With proper design, energy storage can be deployed in ways that help address the concerns of—and drive benefits to—these often-disparate communities.

What states are doing

The policy brief outlines different mechanisms that states have used to spur deployment—things like procurement targets or goals, financial incentives like tax credits or grants, and so on—and it calls out specific ways in which these policies can be used to prioritize investments in underserved communities. In practice, many states have combined one or more policy instruments to spur storage development.

With few exceptions, mostly notably California and New York, most state policymakers have not yet given enough thought to the equity implications of energy storage policies, or to clean energy deployment more broadly. California has recently made changes to its program designed to stimulate adoption of behind-the-meter storage in low-income communities. New York adopted bold climate and clean energy goals and specified investments in underserved communities, but implementation will be critical to achieving stated goals. The policy brief dives into some of the details about how these two leader states are grappling with challenges in deploying energy storage and achieving equitable outcomes. Other states like Massachusetts and Maryland are experimenting with smaller scale efforts to drive storage deployment in underserved communities.

Recommendations

Energy storage has the potential to drive direct benefits to underserved communities, but these outcomes will not happen automatically. The policy brief explores some examples of what states have done well (and not so well) in the past and offers ways for state policymakers to beef up their commitments both to energy storage and to investing in underserved communities.

We found that while policies that bring storage into communities can reduce local air pollution, demand charges, and outages, all of these benefits depend on how and where storage is deployed. This means that policymakers should therefore carefully consider the intended drivers and outcomes of greater storage deployment. By combining different policy mechanisms (including carve-outs, incentives, and financial mechanisms) policymakers can spur development of energy storage in underserved communities, but they should ensure that these policies are aligned with broader clean energy goals and programs. Check out the full list of recommendations, and the interview I did in our Ask a Scientist column.

Know of a state where policy might be moving on energy storage? Or a lawmaker who might be interested in the potential for storage to improve people’s lives? Let us know in the comments, or better yet, leverage your relationships with them and please share this resource!

Connecting climate action with just transition

Colorado’s lawmakers enacted seven energy-related bills in the 2019 legislative session, and one of the new laws (HB 1261) sets a statewide goal for greenhouse gas emissions reductions of 50 percent by 2030 and 90 percent by 2050, both below 2005 levels. Building on a campaign promise, Governor Jared Polis has outlined a vision for achieving 100 percent renewable energy by 2040. But perhaps the most groundbreaking law was HB 1314, which establishes a just transition office and associated advisory committee to focus on coal workers and communities.

Image courtesy of W Jones

With the passage of HB 1314, Colorado has combined strong climate action with an explicit recognition that the momentum towards a clean energy economy will impact people and communities, and that the best way to deal with change is to plan for it. The General Assembly highlights (1)(c)(I-II) the “moral commitment” to helping both coal workers and communities as well as communities disproportionately impacted by coal pollution to ensure a “just and equitable transition.”

The primary aim of the law is to develop a just transition plan for the state of Colorado, due by July 1, 2020. To get there, the state will convene an advisory committee made up of a diverse group of stakeholders—to include not just the usual suspects (representatives of state government agencies, legislators, and utilities with coal-fired power plants)—but also representatives of directly affected communities. Specially, the committee will include three representatives from coal transition communities, two members with actual experience in economic development or workforce retraining, and two representatives of disproportionately impacted communities.

The law funds the establishment of the Just Transition Office within the state’s Department of Labor and Employment, and the new office will support the advisory committee in the development of draft recommendations to the legislature. The committee is charged with identifying potential funding streams from all levels of government that could be used to invest in communities and workers—and identifying gaps and resource needs. The committee will develop options for the establishment of benefits to dislocated workers, workforce development and training, and community economic development grants.

While another government-sponsored report might not sound terribly exciting, this is a significant step for a state that currently gets about half its electricity from coal. The draft transition plan will offer specific options for how to fund the transition and what form the benefits might take, and lawmakers will then need to act on that information. In that sense, the hard work is ahead—but this is a significant first step and an important recognition of the reality facing the coal industry as Colorado moves toward cleaner energy and steeper greenhouse gas reductions.

Looking to our neighbors to the North

Outside the United States, policymakers are facing the reality of coal’s decline and how to address the very real impacts on workers and communities. Last year, the Government of Canada finalized its plan to phase out coal by 2030; this summer a task force finalized a comprehensive report that offered recommendations for transition policies based on detailed input from affected communities. Similarly, as part of its commitment to strong climate targets, a German task force offered a specific road map for ramping down from about 35 percent of its electricity from coal in 2018 to a complete phaseout by 2038—and the report included recommendations on how to address some 20,000 jobs in the country’s mining regions. The German government is proposing to spend 40 billion euros to transform the country’s coal regions.

Imagine that. Policymakers at the national level facing challenging problems head-on and developing solutions!

Let’s take a deeper look at Canada’s recommendations, because they offer some specific insights that can and should inform US policymakers. As the report notes, the decline of the coal industry is expected to impact about 50 communities located in four Canadian provinces. Based on the best available data, the report finds that between 1,880 and 2,400 people work at 17 coal-fired generating stations, and between 1,200 and 1,500 miners work at 9 thermal coal mines—and these workers earn considerably higher wages than the average provincial wage. The task force offers detailed recommendations, but a few are worth highlighting here:

• Fund the establishment and operation of locally driven transition centers in affected communities (Recommendation 4): The hubs would ideally be launched in advance of closures, would be staffed with local residents and experts, and would offer a range of services to include training and employment services but also, importantly, social services.
• Create a pension bridging program for workers who will retire earlier than planned due to the coal phase out (Recommendation 5): Workers close to retirement should have access to a financial bridge that allows them to retire with dignity and with access to health care.
• Create a detailed and publicly available inventory with labor market information pertaining to coal workers (Recommendation 6): In short, dislocated workers need access to up-to-date information about what opportunities are out there and how those prospective jobs match up to their skill sets.
• Create a comprehensive funding program for workers staying in the labor market to address their needs across the stages of securing a new job, including income support, education and skills building, re-employment, and mobility (Recommendation 7): Funding will be needed to facilitate workers moving into new careers, which includes the obvious things like unemployment insurance and educational and training benefits. But in addition, the task force highlights health care coverage needs and travel costs for workers that have to travel long distances.
• Identify, prioritize, and fund local infrastructure projects in affected communities (Recommendation 8): By investing in local infrastructure projects, the government can help offset employment losses and simultaneously improve communities.
• Establish a dedicated, comprehensive, inclusive, and flexible just transition funding program for affected communities (Recommendation 9): Here the task force highlights the importance of long-term economic planning, which is very location-specific, and the need for replacing lost tax base to ensure that local services are not interrupted.

The full list is worth a read.

A model for the states—and the federal government

The point is short and sweet: policymakers don’t need to reinvent the wheel.

From these forward-looking examples, we can start to see the outlines of a broader plan—a framework for ensuring that, in the wake of coal’s decline, coal workers and their families can survive, and coal communities can thrive. That framework starts with an open and honest reckoning with reality. It involves planning that includes real engagement and deep insights from actual people on the ground whose lives will change as a result of coal’s decline. And finally, it involves investments in community-driven and place-based solutions that recognize that one size doesn’t fit all, and that each community is unique.

If we are going to get serious about solving the climate challenge, it’s high time we get serious about ensuring that our coal workers have a fighting chance to be a part of the solution—and that their communities can be made whole. Over the coming months, I’ll be digging into some of these sticky questions, so stay tuned.

Fully 26 participating organizations have endorsed the principles on equitable deployment of energy storage.

The opportunity

When combined with investments in clean energy, storage has the potential to hasten retirements of coal and even natural gas plants across the country. This is critical not only for our climate and decarbonization goals, but also to improve air quality in frontline communities. Utility-scale storage is already being procured to replace three natural gas plants in California. Experts predict energy storage will be a $3.8 billion industry by 2023.

Energy storage has a wide range of potential applications, and UCS recognizes and emphasizes the potential for storage to benefit disadvantaged communities. Because of the potential community benefits, UCS focused in on a couple of important use cases for storage: replacement of peaking power plants and fossil-fired plants; ability to keep the lights on and bounce back more quickly from  power outages; and accelerating the development and integration of renewable energy on the grid. Our focus on energy storage is not meant to preclude other carbon reduction policies or the need for renewable energy policies, but rather to lift up energy storage deployment policy as a key complementary policy. We also recognize that much work remains to be done to fully capture the value that storage can provide to the market and customers.

Involving stakeholders

UCS convened a group of diverse stakeholders, including environmental justice and grassroots organizations, policy experts, solar and storage industries, labor, consumer advocates, faith groups, and renewable energy advocates, in December 2018 in Chicago, Illinois, focused on the equitable deployment of energy storage. The participants developed a set of consensus principles for storage deployment that elevate the critical importance of community-led clean energy solutions. Together these principles can help state policymakers focus on solutions that ensure that the growth of energy storage improves all communities.

As far as we can tell, this event was the first of its kind. Typically, policy wonks gather in a room to think up ideas about how to drive the outcomes they think are important. And while those expert opinions are obviously important, we wanted to know what affected communities thought about the desired outcomes and how to get there. We see this process as an important contribution to our collective work to drive a transition to a clean energy economy.

Goals

The purpose of the convening was to develop policy recommendations, strategic relationships, and political momentum to accelerate the equitable, safe, and low-carbon deployment of energy storage in the US at the state level.

Our goals for the convening were to:

• Create a core set of policy design elements on equitable, safe, and low-carbon energy storage policy deployment that can influence state legislation in 2019 and beyond.
• Build momentum in a set of target states with a broader coalition for equitable, safe, and low-carbon storage deployment policies.
• Produce both short-term and longer-term materials for broad distribution that advance these goals.

This convening on state-level deployment of energy storage built on an earlier convening that UCS held in March 2018 in Washington, DC. That earlier event brought together leading researchers to identify the most important breakthroughs needed to scale up electricity storage as well as ways the federal government can support innovation in this strategically important industry. It was sponsored by the bipartisan House Advanced Energy Storage Caucus and resulted in a policy brief which synthesizes the discussions, including recommendations for federal policy-makers on how to best support electricity storage RD&D that drives innovation, lowers electricity prices, and increases the reliability of the US electric grid.

The principles

Prior to December’s convening, UCS set the stage with some initial thoughts and ideas about what equity might looks like in the context of energy storage deployment. The stakeholders then expanded and shaped the concepts and ultimately outlined six principles of equitable policy design for energy storage. They grappled with the following questions:

• How can storage be deployed to reduce emissions and improve air quality?
• How can storage make communities and residents more resilient to disasters and power outages?
• How can storage promote local economic development and job growth?
• How can storage help accelerate greater levels of renewable energy on the grid?
• How can storage help reduce electricity bills?
• How can policymakers ensure that communities have a seat at the table?

Read the full text of the principles with the list of supporting organizations here.

Outcomes and Next Steps

For this discussion, we focused on three states—Minnesota, Illinois, and Maryland—where we saw opportunities for advancing storage legislation in the near term. Participants represented these three states, and other stakeholders attended who shared perspectives from leading states and nationally.

We know that our convening brought together people who would not otherwise have met, and we saw that dynamic play out in hallway conversations throughout our two-day event. We also know that some of those relationships have continued beyond the convening.

While UCS and many of the convening attendees are focused on advancing equitable energy storage policy in these three states, our hope is that these principles can be used more broadly to inform policy and to shape the way legislators and storage advocates are conceiving of the opportunities afforded by energy storage.

The problem is multi-faceted and complex

For generating electricity, coal-fired power is becoming ever more uneconomic. If you’ve been following the transition to a clean energy economy, that’s not news—we wrote a report on that back in 2017 (and also in 2012 and 2013), and the economics have only gotten worse. A new report found that wind and solar could replace about 74 percent of coal plants with immediate savings to consumers.

But have you ever wondered what actually happens when a coal plant shuts down before the end of its “useful” life? It involves a lot of different stakeholders—utility owners and their investors, ratepayers, environmental advocates, surrounding communities, and plant workers, to name a few. And they often have different opinions about what should be done, to say the least. Another complication is whether the plant is in a rate-regulated or deregulated market. (For the purposes of this discussion, we’ll focus on the rate-regulated power plants—meaning that the electricity prices passed along to consumers are subject to oversight by the state public service commission.)

The Utility Owner: Even though the coal plant may be losing money compared to cheaper—and cleaner—alternatives in the market, the utility may not be financially motivated to close the plant early, because it still must pay off its debt on the investments it made, plus it continues to earn a return on those investments. This roadblock remains even if the utility is otherwise willing and eager to transition to clean energy.

The Ratepayer: By paying for electricity, customers pay back the debt on the utility’s investments, while guaranteeing that the utility can turn a profit (at a level approved by regulators). But the thing is, even if the plant closes early, the remaining debt must still be repaid. How the regulators respond to the utility’s request to close the plant has huge implications for consumers’ bills. (Case in point: after spending $425 million investing in Plant Gorgas since 2010, Alabama Power is now closing the plant, proposing to leave ratepayers in the state on the hook for about $60 million a year for the next 15-20 years.

The Regulators: The regulators must balance the needs of ratepayers with those of the utility. For example, regulators could disallow charges for a plant that is retired and no longer benefitting ratepayers, but this would leave the utility on the hook for the debt—with fewer resources to repay it, which could in turn affect the utility’s credit rating and make future projects more expensive. On the other hand, why should ratepayers face higher bills to pay for utility profits on uneconomic and no-longer-operating power plants?

Workers and Local Officials: Especially in rural communities, the coal plant may be the only major employer and account for a huge portion of the community’s or the county’s economic activity and tax base. What jobs will be available to workers after the plant’s closure? What resources will be available for retraining? How will the community make up for lost tax revenues that pay for schools, police, and social services? Local officials must grapple with real-world, almost existential questions like these in already-stretched-thin local budgets.

Community Environmental Advocates: Fenceline communities support the plant’s closure to reduce air pollution that harms public health. They also want to ensure cleanup of the mess left behind in the aftermath of the plant’s closure—including in the form of toxic coal ash ponds that have caused widespread contamination of nearby groundwater. And with foresight, plant workers facing an uncertain future can get to work on remediation of the site.

And then there’s the question of how to ensure that the plant is replaced by clean energy to reduce heat-trapping emissions that cause climate change, and to avoid a whole new round of stranded assets further down the line in the form of natural gas infrastructure. So, how to balance all these competing interests?

Multiple wins—if done right

What if there were a way to align these different perspectives and come up with a solution that works for most, if not all, stakeholders? In certain situations, a financial instrument called securitization can do just that. Securitization is akin to refinancing the mortgage on your home to a lower interest rate—which lowers your payments on the loan. To enable regulators to use securitization, authorizing legislation must be passed by the state.

So how does it work?

Securitization allows the utility, with proper oversight by the regulators, to refinance the remaining debt on the coal plant, and achieve a lower interest rate. The debt is repaid through ratepayer-backed bonds. The utility finances the bonds—which are used to repay the remaining debt—through irrevocable charges to ratepayers. Because this is considered a very safe investment, the interest rate on this type of bond is typically 3-4 percent (compared to 7-8 percent or higher for interest rate on the original debt).

This means that ratepayers save money—not just through the lower interest rate but also because customers are no longer paying for the utility to earn a profit on those (bad) investments.

And the beauty of this solution is that some of the savings can be shared with the workers and communities who will suffer the loss of jobs and tax base from the closure of the plant. This money can be used for worker retraining and community economic development, for example.

Sound too good to be true? It’s not an accounting gimmick—implemented with proper oversight and forethought, securitization can work to the advantage of all stakeholders. Want to read more details? Check out this series of reports on the subject.

Risks and best practices

Admittedly, it’s not as simple as I’ve made it sound (and it took me a lot of words to describe the “simple” explanation).

The main thing to keep in mind is that ratepayers are on the hook for the bill. So, implementing securitization requires thoughtful legislation and strong regulatory oversight. It is essential that an independent advisor is empowered to represent ratepayers in the case to ensure that they’re getting a good deal. The details of how the finances pencil out are critical to striking the right balance between the interests of shareholders, ratepayers, and the impacted workers and communities.

Securitization also can’t solve all problems brought by the transition away from coal. For example, there are limits to the amount of funds available, and challenges remain for mining communities when plants and mines are not directly linked.

And all of this is a cautionary tale, warning us collectively of the dangers of stranded assets—and to avoid the same mistake with natural gas in the future.

New Mexico emerges as clean energy leader

New Mexico just became the fourth jurisdiction in the United States, following California, Hawaii, and the District of Columbia, to commit to 100 percent clean energy.

But state leaders did more than that—they just demonstrated how to use securitization as way to break the logjam—proactively working to ensure that closure of the coal-fired San Juan Generating Station does not leave coal workers and coal communities behind, while at the same time setting clean energy targets as strong any other state. As part of the bill that the governor signed just last week, New Mexico jumps from 20 percent renewable electricity in 2020 to 50 percent renewables by 2030 and 80 percent renewables by 2040—with a commitment to achieve 100 percent carbon-free electricity by 2045.

These strong clean energy commitments have been coupled with securitization to facilitate the fair and cost-effective closure of the coal-fired San Juan Generating Station (SJGS) in 2022. New Mexico’s law provides on the order of $40 million in transition assistance to workers and communities in the affected region. It will ensure that some of the replacement power will be built in the area to lessen the loss in taxes from the closure of the coal plant—critical to local institutions like the school district.

Other states including Colorado, Utah, Minnesota, and Montana are considering similar legislation. When the right confluence of factors comes together, and when policy makers are clear headed about balancing different and often competing priorities, smart policy can be developed.

Why did we write this report, and what are the implications for Pennsylvania, which has five nuclear power plants that in total provide the second highest nuclear operating capacity of any state?

We must correct market failures to decarbonize the US economy

The Intergovernmental Panel on Climate Change (IPCC) recently drove home the point that we collectively need to reduce emissions as much as possible—and quickly. The IPCC special report underscores the urgency of the climate crisis: keeping global temperature increase to below 1.5 degrees C requires global net CO₂ emissions to decline by about 45 percent from 2010 levels by 2030 and reach net zero around midcentury. The US must lead this effort, meaning it must go further, achieving net negative emissions by 2050.

One major obstacle in achieving this result is the market failure currently facing low-carbon sources of electricity like nuclear and renewables—specifically, the fact that in most of the country, it’s free to emit unlimited amounts of carbon dioxide (and other greenhouse gases) into the atmosphere, even though these emissions are the primary driver of climate change and its impacts on people and ecosystems everywhere.

To overcome that obstacle, we recommend a well-designed carbon cap or price, or low-carbon electricity standard. Our new report also provides information and recommendations for states that may be considering policy actions to address this problem on their own because the federal government is unable or unwilling to act on climate. Although a national carbon price would be most effective in addressing the market failure, we also recommend that states consider implementing a carbon price, similar to leading states like California and the nine states that participate in the Regional Greenhouse Gas Initiative (RGGI) have done. A carbon cap (such as that imposed by RGGI) can help reduce emissions and send a market signal favoring low-carbon resources.

Pennsylvania is one of those states evaluating policy options. Policymakers there are actively considering how to respond to calls from some stakeholders for financial support for the state’s uneconomic nuclear power plants. But as our report details, we do not support blanket financial support for any nuclear operator that comes looking for it—we detail specific conditions that must be met. And as my colleague writes, not all proposals are good ones: FirstEnergy’s proposal in Ohio, for example, is deeply flawed and they’ll be looking for something similar in Pennsylvania.

Pennsylvania’s electricity mix

In 2017, nuclear provided 39 percent of Pennsylvania’s electricity—more than any other fuel source—but natural gas was not far behind at 34 percent, and almost all the rest of the state’s electricity (22 percent) came from coal, with non-hydro renewables remaining a tiny portion of Pennsylvania’s generation at less than 3 percent. That represents a huge transition over the past decade—natural gas increased from 15 percent in 2010, and coal fell from 48 percent in 2010, while nuclear increased only slightly from 34 percent. Given the dramatic growth of the natural gas industry in the state over the past decade with the development of the Marcellus shale (and with more gas plants under development in Pennsylvania and the surrounding region) and the state’s relatively weak policies to support renewable energy and energy efficiency, under current conditions, any decline in nuclear power in Pennsylvania would be made up by an increase in natural gas and coal power—without thoughtful and strong policies. And that would mean that carbon emissions would go up if nuclear plants retire, posing a threat to our climate goals.

Part of the reason gas prices are so low is the lack of a price on carbon; the growth in gas is in part a response to that market failure.

Our report lends credence to this assumption. At the national level, we modeled a set of early retirements of nuclear power plants and found that in the aggregate, most of the loss in nuclear generation was made up by existing power plants powered by natural gas and coal.

Evaluating profitability

To assess the economics of nuclear power plants, we looked at the projected average annual operating margin over the period 2018—2022. That sounds like a mouthful, but it just means projected revenues minus projected costs over the next five years. The net result, calculated in dollars per megawatt-hour, is how we assessed the economic viability of each plant. Plants with negative operating margins were deemed unprofitable. To get a sense of which plants might be at risk of becoming unprofitable, we identified which plants had operating margins between $0 and $5 per MWh, which we label marginal. Plants above $5 per MWh are classified as profitable.

Nationally, we found 16.3 GW of unprofitable nuclear capacity. Not surprisingly, the results are very sensitive to the assumption about future natural gas prices.

Using the insights from assessing the profitability of the entire set of nuclear power plants, we then evaluated which ones might be at risk of abrupt retirement over the next eight years. We then modeled the impact to the electricity system through 2035 of the closure of those plants, which represent between 14 and 27 GW of nuclear capacity. We found that at the national level, cumulative CO₂ emissions would be about 6 percent higher in 2035 compared to the reference case.

That might not sound like a lot, but keep in mind that abruptly losing a significant portion of low-carbon generation: 1) takes us in the wrong direction at a time when we need to be rapidly reducing CO₂ emissions, and 2) would be magnified greatly in Pennsylvania, which relies heavily on nuclear power and does not currently produce very much electricity from renewables.

Meeting stringent safety standards

An accident or terrorist attack at a US nuclear reactor could severely harm public health, the environment, and the economy—and it would also jeopardize the prospects for US nuclear energy for decades and limit available options to meet near-term carbon reduction targets. It is thus essential that policymakers and other stakeholders consider financial support only for nuclear reactors that meet or exceed the Nuclear Regulatory Commission’s highest safety standards.

The Keystone State’s nuclear plants

The results of our profitability analysis for Pennsylvania’s nuclear plants are shown below in the table. According to our analysis, Three Mile Island is unprofitable, while Beaver Valley and Susquehanna are marginally profitable. Exelon plans to shut down the remaining reactor at Three Mile Island in 2019, and FirstEnergy plans to shut down the Beaver Valley plant in 2021, along with two other plants in Ohio. For our early retirement cases, we assume that these plants are retired in those years, along with Susquehanna.

Pennsylvania’s five nuclear power plants provide almost 10 GW of capacity.

Although all of Pennsylvania’s nuclear power plants are currently meeting or exceeding the Nuclear Regulatory Commission’s highest standards, there are other reasons it may not make sense to keep every nuclear plant online, such as high operating costs or major safety problems. Or as Exelon’s CEO recently said:

“I will be the first one to tell you that some of the nuclear plants are small, uneconomic and they won’t make it and they probably should not make it. Let’s not save every one.” –Chris Crane, Exelon CEO

Policies matter

Exelon is already receiving financial support for five nuclear plants in Illinois and New York. FirstEnergy has similarly submitted deactivation notices for its Davis-Besse nuclear plant in 2020 and its Perry plant in 2021, both of which are in Ohio. Following the bankruptcy of one of its subsidiaries, FirstEnergy continues to search high and low for a handout to make up for its bad financial decisions, including to the federal government and to the Ohio legislature.

PJM and other grid operators have shown that retiring these plants does not threaten electricity reliability and resilience:

“Our analysis of the recently announced planned deactivations of certain nuclear plants has determined that there is no immediate threat to system reliability. Markets have helped to establish a reliable grid with historically low prices. Any federal intervention in the market to order customers to buy electricity from specific power plants would be damaging to the markets and therefore costly to consumers.”

The possibility that these plants will be replaced with natural gas and coal rather than low-carbon sources raises serious concerns about our ability to achieve the deep cuts in carbon emissions needed to limit the worst impacts of climate change.

Recommendations for Pennsylvania policymakers

Three states—Illinois, New York, and New Jersey—have taken policy actions to value the low-carbon attributes of nuclear power. As part of legislation providing financial support for some nuclear plants, each state simultaneously strengthened policies to support renewable energy and energy efficiency. New York and New Jersey both increased their Renewable Portfolio Standards (RPS) to 50 percent by 2030, and Illinois fixed problems with its RPS that will allow the state to reach 25 percent by 2025. All three states also set higher energy efficiency targets as part of the legislation.

While a few of the Keystone State’s nuclear power plants may be facing economic headwinds in the immediate future, policymakers should carefully weigh the evidence and consider the big picture before simply writing a check on behalf of ratepayers—since many residents face economic hardship and high energy burdens.

UCS offers the following recommendations based on our analysis:

• Require transparency: Companies should open their books and demonstrate need. Our analysis is based on the best available cost data, but it cannot replace a thorough examination of a given plant’s financials, because this information is proprietary. Transparency ensures that impact to ratepayers is limited.
• Limit and adjust support: Any financial support to struggling plants should be limited and adjusted over time, as market conditions change.
• Ensure safe operation: Any plant receiving financial support should be required to meet strong safety guidelines. The need for low-carbon electricity absolutely does not trump safety.
• Strengthen support for renewables and efficiency: If policy support for nuclear power is done based on its low-carbon attributes, policymakers should simultaneously invest in renewables and efficiency in order to transition to a low carbon future. Pennsylvania’s Advanced Energy Resource Portfolio (AEPS) is relatively weak and has not been updated since 2008. The state’s energy efficiency standard is not achieving cost savings realized by leading states. Policymakers must include actions to strengthen standards to drive greater deployment of renewable energy and energy efficiency.
• Plan for the transition: Nuclear power plants will close eventually as they reach the end of their safe operating lives. Companies should be required to develop transition plans for communities and workers that will be negatively impacted by the closure. With adequate time, adverse economic impacts can be mitigated.

Today I’m handing my blog over to our 2018 UCS Schneider Fellow Eli Kahan, who has studied how utilities are planning for future electricity needs, what they are doing in terms of new investments in low-carbon generation sources, and how that compares to their stated goals.

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Market pressures

In the past decade, due to advances in horizontal drilling technology and the fracking boom, domestic natural gas prices have plummeted, incentivizing many power plant owners to shift from coal to natural gas. Moreover, in the past few years, renewable energy such as wind and solar have continued to grow at record rates as these renewables have become highly economically competitive with traditional forms of electricity generation. A look at Lazard’s 2017 Unsubsidized Levelized Cost of Energy report shows wind as the world’s cheapest source of energy with utility scale solar not far behind.

As such, this rapid decline in coal generation has been driven primarily by market forces. While the administration’s proposed bailout might buoy a few coal plants destined for retirement in the next few years, this crutch is unlikely to keep coal afloat in a time of ever-falling costs of renewable energy, to say nothing of the urgent need to act on climate change.

Another key reason this bailout is unlikely to stick is due to a recent surge in announcements of utility goals to reduce CO₂ emissions. Who is setting these targets? What is driving them? And how are utilities planning to meet these goals?

Utilities around the country have announced significant emissions reduction goals.

The targets

To begin answering these questions, I gathered data on more than 100 of the nation’s largest electric utilities and parent energy companies—more than 30 of which have set quantitative targets for reducing CO₂ emissions, achieving higher percentages of renewable energy, and/or completely moving off of coal. Together, these companies, including 7 of the 10 largest electric utilities by market value in the country, account for nearly 40% of 2016 US electricity sales. These utilities are showing awareness of the science, costs, and their consumers’ concerns in setting sights on a lower carbon future.

While these goals come in many shapes and sizes, they all share one thing in common: additionality—all of them voluntarily exceed state goals and mandates. Moreover, the majority of these targets have been set in the past couple years—a time when the Clean Power Plan has been on the chopping block and during a fossil-fuel-friendly presidency.

Furthermore, as the map below shows, this is a national trend—these targets are not restricted to just a few leading states but rather can be found all around the country, even in places that rely heavily on coal.

Electric Utility Companies with targets deemed to provide additionality. Not shown: Avangrid, Engie, Great River Energy, MidAmerican Energy, Minnesota Power, NextEra Energy, NRG, Tennessee Valley Authority. Since the analysis done for project, California’s SB100 has nullified the additionality from PG&E’s and LADWDs’ goals.

What else is driving this trend?

There’s little doubt that falling prices for natural gas and renewables have aligned cutting emissions with cutting costs, and the success of state renewable portfolio standards (RPSs) and greenhouse gas (GHG) emissions reductions targets has played a role in breaking up the inertia on decarbonization. But according to the utilities themselves, there exists a whole host of additional motivating factors.

For AEP’s Appalachian Power President, Chris Beam, the motivation is customer preferences:

“At the end of the day, West Virginia may not require us to be clean, but our customers are”  –Chris Beam

For Berkshire Hathaway Energy’s vice president for government relations, Jonathan Weisgall, it’s customer input focusing on the role of corporate commitments:

“We don’t have a single customer saying, ‘Will you build us a 100 percent coal plant?’…Google, Microsoft, Kaiser Permanente — all want 100 percent renewable energy. We’re really transitioning from a push mandate on renewable energy, to more of a customer pull.” –Jonathan Weisgall

For DTE, it is a science-based response to the issue of climate change:

“Through our carbon reduction plan DTE Energy’s is committed to being a part of the solution to the global climate crisis. There is broad scientific consensus that achieving 80 percent carbon reduction by 2050 will be necessary to begin to limit the global temperature increase below two degrees Celsius over preindustrial levels” –DTE 2018 Environmental, Social, Governance, and Sustainability Report, p.3

Even coal-heavy American Electric Power (AEP) is moving toward a clean energy future, recognizing the value of investing in renewable energy. AEP serves customers in 11 states—including Ohio, Indiana, Kentucky, Virginia, and West Virginia. Nick Akins, AEP’s CEO, is skeptical of the administration’s plans to bailout certain coal and nuclear plants. Although his position is a bit more nuanced—claiming that coal “remains important to the reliability and resiliency of the grid”—Akins is clear-eyed about the future, charting AEP’s path toward a 60 percent reduction in carbon emissions by 2030, and 80 percent by 2050:

“Our customers want us to partner with them to provide cleaner energy and new technologies, while continuing to provide reliable, affordable energy.” –Nick Akins

How are utilities meeting these goals?

For the past decade, utilities have been cutting GHG emissions and costs by shedding coal and transitioning onto natural gas. Natural gas is sometimes seen as a “transitional fuel” on the path to a clean energy future, as it is known for producing 50-60 percent less CO₂ than coal does in combustion. Southern Company, shown below, provides a particularly illustrative example of this coal to natural gas switching.

However, natural gas is not particularly clean, especially when considering available renewable energy alternatives. And with the recent dramatic cost declines in wind and solar, companies like MidAmerican Energy, shown above have realized they can skip the “transition fuel” and get a head start on investing in a more long-term energy solution.

Over and over, it’s the same story:

“Retiring older, coal-fueled units. Building advanced technology natural gas units. Investing in cost-effective, zero-carbon, renewable generation” – WEC Energy Group

“The company expects to achieve the reductions through a variety of actions. These include replacing Kentucky coal-fired generation over time with a mix of renewables and natural gas” – PPL

“Traditionally, our generation portfolio has depended on coal, but we are transitioning our energy supply away from coal to rely more on renewable energy and natural gas generation as backup. From 2005 through 2026, we will retire more than 40 percent of the coal-fueled capacity we own under approved plans, and if regulators approve our proposed Colorado Energy Plan in 2018, we will retire even more.” – Xcel

In short, utilities around the country are retiring coal, and investing in natural gas and renewables. But it’s important to emphasize that there is a serious risk of an overreliance on natural gas. Natural gas is subject to price volatility (putting consumers at risk of higher prices) and is inconsistent with long-term deep decarbonization targets. Utilities prioritizing clean, cost-effective renewable energy instead are protecting their customers from gas-related risks.

Connecting the dots

We’ve seen a recent flurry of utility announcements of decarbonization goals and renewables targets. In the last decade, natural gas has steadily eaten away at coal’s market share of the nation’s electricity production. And the costs of renewables continue to fall dramatically, making them both clean and cost-effective. This trend shows no sign of changing. Some utilities such as Consumers Energy have even explicitly pledged to drop coal altogether.

In that context, how does the administration’s proposed bailout, which would cost billions to keep a few of the nation’s oldest, dirtiest, most expensive coal plants on line for another couple years, make sense? Grid operators and federal regulators have consistently said that near-term retirements pose no threat to grid reliability. Reserve margins—that is, how much extra electricity generating capacity is available beyond expected peak demand levels—are sufficient in most regions of the country. And besides, studies show renewables are diversifying the electricity mix, making the electricity grid more reliable and resilient.

We see that some utilities are making decisions prudent for their long-term planning: smart investments, achievable decarbonization targets, and a mix of energy sources in their portfolios. But a bailout of this nature will send utilities—along with their investors—scrambling to square established goals with the administration’s backward steps.

Even with the temporary crutch, coal has no long-term future, as it continues to be displaced by cheaper and cleaner forms of energy. Instead of propping up a dying industry, our collective interests would be better served by ensuring that the miners and coal plant workers—whose livelihoods will be threatened by this transition—have new opportunities to find good jobs with family-supporting wages. We can and should look to our nation’s utilities and their clean energy targets for a clearer vision forward.

The president continues to push for a misguided federal bailout of the coal industry—a blatant political payoff to campaign donors using taxpayer money with no long-term solutions for coal workers. The latest shiny object masquerading as reasoning? National security. But as we know, bailing out uneconomic coal plants only exacerbates the real national security issues brought on by climate change, while continuing to saddle our country with the public health impacts of coal-fired electricity—which hurt real people in real communities.

As is typical with this administration, substance and science and evidence are inconsequential compared to ideology, and their attempts to bail out money-losing coal and nuclear plants are no exception. Here’s a quick take on how we got here and what to expect next.

Let’s see what sticks…

The administration didn’t exactly hit the ground running after the 2016 election—no one bothered to show up at the Department of Energy until after Thanksgiving of 2016, even though career staff were readily available and prepared to brief the incoming administration on the important work of the agency. But by the spring, it had become clear that Energy Secretary Rick Perry would be the front-man in leading the charge for a federal bailout of coal and nuclear plants. His shifting rhetoric and poor justifications for using consumers’ money to prop up uneconomic coal plants suggests that he and his inner circle are desperate to find an argument that sticks and survives legal challenges.

Briefly:

• March 2017: Perry meets with coal magnate and major campaign donor at DOE. The photographer who captures a shot of them embracing at the start of the meeting is later fired for releasing the information to the public.
• April 2017: Perry asks DOE staff to write a report examining the changes to electricity markets affecting “baseload” power (read: coal and nuclear) that might affect grid resilience and reliability. Perry’s request for an electricity grid study is riddled with flawed assumptions, encourages predetermined conclusions, and contradicts research by his own agency.
• July 2017: A leaked version of the draft grid study suggests that DOE career staff were putting together an unbiased report in spite of tremendous political pressure.
• August 2017: The final grid study concludes that closure of coal and nuclear plants do not threaten resilience and reliability, not exactly the conclusion Perry was looking for. The study finds that the grid is operating reliably with high levels of renewables and that low natural gas prices were largely to blame for recent plant retirements. But, in a hint of things to come, it does suggest exploring the idea of “utilizing existing Federal authorities under the Federal Power Act … to ensure system reliability and resilience” and having states use regulatory authority “to support specific at-risk plants that contribute to system resilience.”
• September 2017: Perry pushes forward. Undeterred by the conclusions of the study he requested and evidently uninterested in further research, Perry asks the Federal Energy Regulatory Commission (FERC) to guarantee profits for coal and nuclear plants under the guise of ensuring a reliable and resilient grid.
• January 2018: FERC rejects the proposal—unanimously, even though four of the five commissioners were appointed by the current president—noting that the proposal represented an unwarranted intrusion into electricity markets, and instead opening a docket to study the issue.
• January 2018: The bomb cyclone brings extreme cold to the Northeast. DOE requests one of its National Labs, the National Energy Technology Laboratory (NETL), to write a story (masquerading as a report) about how coal saved the day and prevented massive blackouts. NETL delivered with the intent of pushing back against FERC’s decision, and it might as well have been a fairy tale about a handsome prince.
• May 2018: An internal memo leaks on May 31. It reveals the administration’s plans to use emergency powers, under the Korean War-era Defense Production Act and the Federal Power Act, in order to bail out the money-losing coal and nuclear plants, which took FERC by surprise. The new rationale is that these plants are vital for national security and that without them, the electricity system would somehow be more vulnerable to cyberattacks.
• June 2018: The leak prompts the White House to release a statement on June 1 directing Perry to “take immediate steps to keep both coal and nuclear plants running” on the basis of national security.
• August 2018: Having failed to get its political paybacks through on the first go-around, the administration moves to politicize the important and once-independent FERC. Prominent staff have taken the unprecedented move of discussing proposals before decisions have been made, the administration is planning to put forth a nominee that supports the bailout proposal.

So, the game of whack-a-mole continues.

False arguments

In short, the administration is proposing to use emergency authorities to force grid operators and consumers to buy electricity from uneconomic coal and nuclear plants. Let’s break down the arguments one by one.

Reliability. Despite claims to the contrary, there is no reliability crisis. Lost in the rhetoric around the need for baseload resources is the fact that grid operators already have systems in place to ensure there is adequate supply of electricity when needed. The North American Electricity Reliability Corporation (NERC) projects more-than-adequate reserve margins in almost every region of the country—a few areas of concern but certainly no crisis. PJM Interconnection has repeatedly stated there is no threat to reliability from plant retirements (because they study the impacts on the system of every proposed plant retirement before approval):

“Our analysis of the recently announced planned deactivations of certain nuclear plants has determined that there is no immediate threat to system reliability. Markets have helped to establish a reliable grid with historically low prices. Any federal intervention in the market to order customers to buy electricity from specific power plants would be damaging to the markets and therefore costly to consumers.”

Resilience. Despite claims to the contrary, coal and nuclear plants do not offer additional system resilience because of onsite fuel stockpiles. It turns out, coal piles and equipment can freeze in cold weather, and flooding from extreme rain can affect power plant operations and prevent delivery of coal. A new report suggests that the administration is focusing on the wrong thing (fuel stockpiles) and should instead be focusing on performance-based metrics looking at the overall electricity system. For starters, between 2012 and 2016, a whopping 0.00007 percent of electricity disruptions were caused by fuel supply problems.

National Security. Arguments are now being couched in terms of national security and cyberattacks on the grid. The thing is, coal and nuclear facilities are vulnerable to cyberattacks just like other parts of the electricity grid, a fact completely absent from the leaked memo. Obviously, everyone cares about national security, but there is zero evidence to support the idea that keeping uneconomic power plants online will make us safer.

What we don’t know

Much uncertainty remains about Perry’s latest attempt to make something stick. UCS will keep an eye out for answers to important questions that remain, like:

• Who will pay? Will DOE ask Congress to authorize funding for the bailout, meaning taxpayers get to foot the bill? Or will DOE ask FERC to use its power under the Federal Power Act, implying an additional cost to consumers? In either case, hold on to your wallet.
• How much will it cost? In short, no one really knows, because DOE’s plan is light on details. Estimates range from $17 to $35 billion (with a “b”) per year according to recent studies.
• Which power plants will qualify? Will every single coal and nuclear plant qualify for a handout? Only those that are “near” military installations and could somehow be tied to the administration’s national security rationale? Only the ones that are losing money? Only the ones that donated to the president’s campaign?
• How will qualifying plants get paid? How would the bailout be structured and how exactly would owners of money-losing plants get compensated?

Perry charges ahead—and we must be relentless in our opposition

As we continue to wait for additional details about DOE’s bailout proposal, we are gearing up for a fight. Led by Secretary Perry, the administration continues to make false and misleading arguments about the purported need for keeping uneconomic plants from retiring early—and this issue will be with us as long as the current president is in office. Perry has long since dropped any pretext for caring about market economics or actual information to inform his proposals. In response to Congressional questioning last fall, Perry remarked:

“I think you take costs in to account, but what’s the cost of freedom? What does it cost to build a system to keep America free?” -Secretary Rick Perry, 12 October 2017

When the facts don’t support your argument, you’re forced to rely on empty bumper-sticker statements like this one to make your point.

And stack the deck by putting biased people who support your ideas in decision-making positions. We’ll be watching closely as the process unfolds for nominating someone to fill the vacant seat at FERC.

At UCS, we’re going to continue the fight to hold the administration accountable and stop this misguided and disastrous proposal from being implemented. The facts are on our side—there is no grid reliability crisis and no grid resiliency crisis, but there is a climate crisis, and bailing out coal plants will only add to the climate crisis with real adverse consequences to the economy and public health. Stand with us.

Critical benefits to miners and their families

Congress set up the Black Lung Disability Trust Fund in 1978 to provide benefits to coal miners that have become permanently disabled or terminally ill due to coal workers’ pneumoconiosis, or black lung, as well as their surviving dependents. The Trust Fund still protects miners and their families when no liable company could be identified or held responsible. This might happen if a miner had multiple employers, or if the responsible company went out of business. The U.S. Department of Labor, which manages the Trust Fund, estimates that in FY 2017, 64 percent of beneficiaries were paid from the Trust Fund, totaling $184 million in benefits. The Trust Fund provides critical benefits to miners and their families in cases where mining companies can’t or won’t pay.

The Trust Fund is financed primarily through a per-ton excise tax on coal produced and sold domestically. The original legislation set the tax at 50 cents per ton of underground-mined coal, and 25 cents per ton of surface-mined coal (but limited to 2 percent of the sales price). Unfortunately, Trust Fund expenditures have consistently exceeded revenues, despite several actions by Congress to put the Trust Fund on solid financial footing. In other words, to meet obligations in any given year, administrators are forced to borrow from the U.S. Treasury. Moreover, in 1986 Congress set the levels of the excise tax at $1.10 per ton of underground-mined coal and $0.55 per ton of surface mined coal (up to a limit of 4.4 percent of the sales price)—but at the end of this year, the tax levels will revert to their original 1978 values. For these reasons, Congress requested a review of the Trust Fund’s finances and future solvency from the General Accounting Office (GAO), an independent, nonpartisan agency that works for Congress to assess federal spending of taxpayer money.

GAO offers a wake-up call

The GAO concluded its report and released its findings last month—and the results should serve as a wake-up call to Congress. The chart below shows the impact on the Trust Fund of having to borrow year after year to make up for the shortfall in excise tax revenue relative to benefits payments, that is, the accumulation of outstanding debt.

This front-page chart of the GAO report shows that if the excise tax decreases to 1978 levels (according to current law) at the end of 2018, the Trust Fund’s debt will exceed $15 billion by mid-century.

GAO looked at the impact of a few different policy choices, including adjustments to the excise tax rate and debt forgiveness, both of which Congress has used in previous changes to the Trust Fund. In 2008, for example, about $6.5 billion in debt was forgiven (hence the large decrease in debt in the chart above). Unfortunately, that didn’t solve the Trust Fund’s solvency problem, because subsequent coal excise tax revenue was less than expected, thanks to the 2008 recession followed by declining coal production resulting primarily from increased competition with natural gas.

GAO calculated how much money would need to be appropriated by Congress to balance the Trust Fund by 2050 under various assumptions for the excise tax. The chart below summarizes the results succinctly: Increasing the current excise tax by 25 percent would require no debt forgiveness, but allowing the current tax to expire would require $7.8 billion of taxpayer money to balance the Trust Fund by 2050.

Figure 10 from the GAO report (p.30), showing the scale of the problem of outstanding debt in the Trust Fund. Analysts calculated the level of debt forgiveness needed to balance the Trust Fund by 2050, assuming that Congress makes a single lump sum payment in 2019 to pay down the debt. In other words, the bottom bar means that, if Congress allows the current tax rate to expire but also forgives $7.8 billion in existing debt in 2019, then by 2050 the Trust Fund would be balanced (meaning that the remaining debt would have been repaid and annual payments would equal annual revenues).

Assumptions matter

As with any projection of what might happen in the future, the results depend on the assumptions made by the analyst. GAO conducted a credible and sound analysis—based on reasonable, defensible, middle-of-the-road assumptions—to assess the solvency of the Trust Fund. Key drivers are projected revenues expected from future coal production and projected expenditures for future beneficiaries.

Of course, neither of these things is known with much certainty. Worse, there are compelling reasons to believe that the scale of the Trust Fund’s insolvency could be much worse:

• For one thing, coal production could be lower than what GAO assumed, meaning less revenue from the excise tax. GAO used the U.S. Energy Information Administration’s reference case, which shows coal production essentially flat through 2050. But note that this is likely a conservative assumption: if natural gas prices remain low, or if more renewable sources of energy come online as expected thanks to continuing cost declines, coal production could continue its recent ten-year decline for the foreseeable future. And despite current federal politics, there is momentum for deep decarbonization to address the climate crisis.
• Even more alarming, the emerging crisis of new black lung cases in Appalachia is not included in the analysis. GAO assumed that the growth rate in new black lung cases is -5.8 percent, based on historical data on the number new beneficiaries of the Trust Fund. That means that the number of beneficiaries will continue to grow, but at a slower pace than in the recent past. With the very recent surge in black lung cases combined with the fact that the disease can’t be detected in the lungs until after about a decade of exposure, this assumption is not likely to hold true.

NIOSH and NAS weigh in on science and solutions

Black lung is completely preventable, and as a result of federal standards limiting miners’ exposure to coal dust, by the late 1990s, the disease had become rare. However, as NPR has reported (here, here, here, here, and here), in just the last few years, Central Appalachia has seen a surge in new cases of complicated black lung, an advanced form of the disease. National Institute for Occupational Safety and Health (NIOSH) investigators found 60 new cases of the disease at a single radiology clinic in Kentucky in just 18 months alone. By comparison, NIOSH’s monitoring program detected only 31 cases nationally from 1990 to 1999. NIOSH researchers also identified 416 new cases in Central Appalachia from 2013 to 2017. NPR’s ongoing investigation puts the number of new cases in Appalachia since 2010 at around 2,000, roughly 20 times official government statistics.

What’s responsible for the spike in reported cases of black lung? For one thing, the national monitoring program historically has a low participation rate, and while the resurgence of the disease shows up in the national monitoring data, the cluster identified in Kentucky was discovered separately. And because it takes years for the disease to manifest in a miner’s lungs, it’s difficult to connect the disease to specific exposure or mining practices. NIOSH researchers suggest that changes in mining practices may be exposing miners to greater amounts of silica dust from cutting through rock formations to access thin or deep coal seams.

On the heels of the GAO report and the NIOSH investigations, the National Academies of Science, Engineering, and Medicine (NAS) released an independent report looking at coal industry approaches to monitoring and sampling the coal dust levels that miners are exposed to. The NAS report concludes that compliance with federal regulations limiting the exposure of miners to coal dust has reduced lung diseases over the last 30 years, but that compliance has failed to achieve “the ultimate goal of the Coal Mine Health and Safety Act of 1969”—eradicating coal dust exposure diseases such as black lung. The NAS goes on to say, “To continue progress toward reaching this goal, a fundamental shift is needed in the way that coal mine operators approach [coal dust] control, and thus sampling and monitoring.” The report recommends a systematic investigation of how changes in mining operations may have increased exposure to silica dust, the development of better monitoring devices, especially for silica, and increasing participation rates in the NIOSH monitoring program.

Congress must act—and fast

The good news is that there is the start of a solution to the funding of black lung benefits already in sight: the RECLAIM Act. If enacted, RECLAIM would free up $1 billion in existing money from the Abandoned Mine Lands (AML) fund to put people to work cleaning up degraded mine lands and spurring local economic development in communities that need it most. How is this separate fund and separate problem connected to black lung benefits?

In short, Congressional budgetary rules require that any time taxpayer money is spent, it must be offset by budget cuts or additional revenue elsewhere. RECLAIM’s champ, Rep. Hal Rogers (R-KY), identified the extension of the coal excise tax at current levels for an additional ten years to “offset” the $1 billion in spending from the AML fund. It doesn’t matter that these two initiatives are—and will remain—separate programs with their own funding streams.

But the two issues are intertwined—the surge in new cases of black lung is happening in the same region where communities are struggling to deal with the legacy of past mining operations and simultaneously trying to chart a new economic future. Addressing all these issues simultaneously is the sort of win-win-win policy solution that doesn’t come around too often.

The astute reader will notice, however, that the extension of the coal excise tax for ten years is insufficient to address the Trust Fund’s long-term solvency problem, as the charts above demonstrate. Passing the RECLAIM Act, therefore, is merely the first step to addressing the problem; but legislators must consider actually increasing the coal excise tax. This would ensure that the responsible parties—that is, coal companies—are forced to pay for the damages inflicted on real people, real families—instead of leaving taxpayers holding the bag. And with black lung set to reach epidemic levels in the coming years, Congress must act now to strengthen the fiscal health of the Trust Fund—to protect the health and well-being of miners and their families in the face of an uncertain future.

UPDATE (5 July 2018): The original version of this post misstated the year when the current coal excise tax was established. The current coal excise tax of $1.10/$0.55 per ton was established in 1986 and extended at current levels in 2008.

A few months ago, the Department of Energy (DOE) made a request to one of its national labs, the National Energy Technology Laboratory (NETL), to study the impacts on the electricity grid of a severe cold snap called the bomb cyclone that hit the Northeast in early January 2018. NETL conducts important R&D on fossil energy technologies. The report released last week uses deeply flawed assumptions to inaccurately paint coal (and to a lesser extent, fuel oil) as the savior that prevented large-scale blackouts during the extreme cold, while greatly understating the contribution from renewable energy sources. It also estimates a bogus value for coal providing these so-called “resiliency” services. One has to wonder whether this deeply flawed and misleading study is part of the administration’s continued attempts to prop up the coal industry at all costs, especially after FERC rejected the DOE’s fact-free proposal to bail out coal and nuclear plants late last year. The utility FirstEnergy, which owns and operates a fleet of coal and nuclear generators, immediately seized upon NETL’s report and is petitioning DOE for an emergency bailout.

Separating the Facts from the Fiction

The report emphasizes the fact that fossil and nuclear power played a critical role in meeting peak demand during the cold snap. Across six regions, according to the report, coal provided 55 percent of daily incremental generation, and the study concludes that at least for PJM Interconnection (which manages the electricity grid across 12 Midwest and Mid-Atlantic states as well as DC), “coal provided the most resilient form of generation, due to available reserve capacity and on-site fuel availability, far exceeding all other sources” without which the region “would have experienced shortfalls leading to interconnect-wide blackouts.” The report then goes on to incorrectly estimate value of these “resiliency” services to be $3.5 billion for PJM.

The nugget of truth here is that we do need reserve capacity to be available in times of peak demand, especially during extreme weather events that lead to greatly increased need for heating or cooling. And this is especially important during the winter, when the demand for natural gas for home heating spikes in some parts of the country, leading to higher prices and less natural gas available for electricity generation (since home heating takes priority over electricity generation in terms of natural gas pipeline delivery contracts). In the Northeast, which uses a lot of natural gas for heating, this shortfall in natural gas led to an increase in electricity generation from dirty fuel oil, as the report points out.

However, regional transmission organizations (RTOs) and independent system operators (ISOs) were prepared for the cold snap, and the markets performed as expected. PJM in particular put systems in place to prepare for extreme cold weather following the 2014 Polar Vortex, and electricity markets in the Eastern U.S. are organized to provide payments to power plants for providing either energy (electrons to the grid) or capacity (the ability to switch on and provide a certain level of output if called upon). As fossil generators retire because they are uneconomic, plenty of other resources are under construction or in advanced planning stages and will be ready at the time they’re needed. This is why planning for future electricity needs is critical, and this is the responsibility of regional grid operators—one they take quite seriously.

To that point, grid operators and reliability experts see no threat to grid reliability from planned retirements of coal and nuclear power plants. The North American Electric Reliability Corporation (NERC), whose mission is to ensure the reliability of the bulk power system for the continent, finds in its 2017 Long-Term Reliability Assessment, that (contrary to NETL raising potential reliability issues from future coal and nuclear retirements) most regions of the country have sufficient reserve margins through 2022, as new additions more than offset expected retirements. PJM, in its strongly worded response to FirstEnergy’s petition to DOE for an emergency bailout (see below), stated “without reservation there is no immediate threat to system reliability.”

Beyond this, the report and its pseudo-analytic underpinnings really goes off the rails. Let’s take a few of its misleading points in turn.

How to Quantify Resiliency

NETL decided to consider the incremental generation from each fuel source—that is, how much more electricity was produced by each fuel during the bomb cyclone—as a metric for which fuel provides the grid with resilient services. As they put it:

“…we examine resilience afforded by each source of power generation by assessing the incremental daily average gigawatt hours during the BC event above those of a typical winter day.”

This is a bogus metric not only because it simply reflects the amount of unused or idle generation in the system, but also because the reference time period (the first 26 days of December) is a period when there wasn’t much generation from coal and oil. Turns out, there is a lot of coal-fired capacity sitting around because it is more expensive to run compared to natural gas. The only time it makes economic sense to call on these more expensive resources is when demand pushes electricity prices high enough, as it did during the bomb cyclone.

What NETL is basically saying is that the most expensive resources are the most resilient. The report then argues that the high cost of those expensive resources represents the value of “resiliency”—and that these expensive generators should be compensated for providing that value. It’s circular reasoning, and it’s the same argument that we heard all last fall as part of the fact-free DOE FERC proposal, which boils down to this: our assets can’t compete in the marketplace because they’re too expensive, so you (meaning, the ratepayer) should pay us more money to stay online.

The NETL report is essentially trying to invent a metric to define resiliency, and it’s wrong. There are certainly qualitative ideas about what resiliency means:

“Infrastructure Resilience is the ability to reduce the magnitude and/or duration of disruptive events. The effectiveness of a resilient infrastructure or enterprise depends upon its ability to anticipate, absorb, adapt to, and/or rapidly recover from a potentially disruptive event.”  –NERC, 2012

But there is no agreed-upon quantitative definition for resiliency, which is one reason FERC has opened a docket to study the issue.

Enter Capacity Markets

The NETL report misses another crucial point. These resources are, in many cases, already being paid to be available when needed. In general, there are several ways that a given generating facility of any kind can make money: by providing energy; by offering capacity on demand; and by providing what are called ancillary services (things like voltage and frequency regulation, which ensure the stability of the grid). Without going into a detailed explanation of how these different markets work, it’s sufficient to understand that these markets exist—and are working as intended.

Instead of doing a detailed analysis of how fossil generators were compensated during the cold snap, or which plants may have been cheaper to run, NETL offers a deeply misleading back-of-the-envelope calculation: it multiplies the increase in the daily cost of electricity above an arbitrary baseline (see next section) by the number of days in the cold snap. This calculation fails to acknowledge that some of these generators are already receiving payments for those services by bidding into a market and agreeing to provide the service of additional capacity when needed.

Cherry-Picking Baselines to Attack Renewables

NETL’s flawed analysis also takes aim at renewables, suggesting that because of “below average” renewable generation, resources like coal and fuel oil had to come online to pick up the slack.

What NETL did here is classic cherry-picking. They compared the generation from renewables during the bomb cyclone to what they called a “typical winter day.” Except that it wasn’t. NETL used a 26-day period in December to compare baseline generation. Wind generation during the bomb cyclone event was actually higher than expected by grid operators in the Northeast and Mid-Atlantic. For example, In PJM, wind output from January 3-7 was 55 percent higher than the 2017 average output, and consistently 3 to 5 times greater than what PJM expected from January 3-5.

Actual Failure Rates

Instead of using NETL’s flawed analysis, looking at the actual failures rate of different generation resources during the extreme weather event provides a more accurate picture of the reliability and resiliency impacts. PJM did this, it turns out. As shown in the chart below, which compares forced outages during the polar vortex and the bomb cyclone, PJM’s analysis finds that coal plants experienced similar failure rates as natural gas power plants during both the 2014 and 2018 cold snaps. For example, on January 7, 2018, a peak winter demand day, PJM reported 8,096 MW of natural gas plant outages, 6,935 MW of coal outages, 5,913 MW of natural gas supply outages, and 2,807 MW of “other” outages (which includes wind, solar, hydro, and methane units).

The NETL study completely ignores the fact that baseload resources like coal and nuclear also pose challenges to reliability—because of limited flexibility, vulnerability to extreme weather events (like the polar vortex and bomb cyclone), extreme heat and drought affecting cooling water, and storm surge. During extreme cold, pipes and even piles of coal can freeze, meaning that coal plants can’t fire up.

FirstEnergy Begs for a Handout

Only a day after NETL’s report was released, the utility FirstEnergy submitted a request to DOE for emergency financial assistance to rescue its uneconomic coal and nuclear plants and heavily cited the NETL report. The basis of the request is section 202(c) of the Federal Power Act, a rarely used portion of the statute that allows DOE to keep power plants online in times of emergency or war. But as NERC, PJM, and others have pointed out, there is no immediate reliability crisis. The request is a Hail Mary pass to save the company from bankruptcy, and is not likely to hold up in court.

Garbage In, Garbage Out.

NETL has produced a document that isn’t worth the few megabytes of disk space it is taking up on my computer. As we often say when evaluating a computer model or analysis—garbage in, garbage out. The study appears to be politically motivated, and it reveals a deep misunderstanding of how the electricity grid works, using simplistic and misleading calculations to justify its conclusions. It is shrouded in insidious, analytic-sounding language that make it seem as if it were a legitimate study. It should be rejected out of hand by any serious person taking an objective look at these issues—as should FirstEnergy’s request for a bailout.

The President’s budget takes aim at applied energy programs

It’s pretty clear that the president’s proposed budget, similar to last year, seeks to drastically reduce funding for applied energy research, development, and demonstration (R&D). And the cuts extend beyond the nearly 2/3 reduction in R&D funding for Energy Efficiency and Renewable Energy—the budget slashes funding by 26 percent for advanced fossil technology like CCS and 26% for advanced nuclear R&D. The Office of Electricity Delivery is hit hard, with its program on Energy Storage facing a 74 percent reduction to its already paltry budget.

For the second year in a row, the administration is proposing to ax ARPA-E, something even Secretary Perry opposes. ARPA-E enjoys strong bipartisan support because the agency is advancing transformational energy projects that can potentially and radically improve U.S. economic strength, national security, and environmental outcomes. And finally, the president’s budget eliminates the Loan Guarantee Program, even though the program has generated more than $1.79 billion in interest repaid to the US Treasury.

The table above shows the current funding levels (FY 2017 Enacted refers to the final numbers passed by Congress through continuing resolutions); the House and Senate committee reports for FY 2018 (likely to be out of date by the end of the week); and the president’s requests for both FY 2018 and FY 2019.

Grid scale energy storage has the potential to change the way the grid functions—with positive benefits for society. But the technologies aren’t quite commercial scale, yet. Most of DOE’s funding for energy storage RD&D comes through the Energy Storage program within the Office of Electricity, various programs and cross programmatic initiatives within EERE, and ARPA-E. And yet, the president is proposing a 74 percent reduction in the Energy Storage program, complete elimination of ARPA-E, and a 66 percent cut to EERE.

Why such steep cuts for all these applied technology programs? As I’ve written previously, the administration continues to drive an ideological wedge between basic and applied research, based on the false premise that the private sector can pick up these technologies and move them to commercialization.

Is there any evidence that the private sector will pick up the slack?

In a word, no.

Funding for energy RD&D is a wise investment for the federal government—to maintain (or regain) US competitiveness in innovation, and to ensure that new technologies are able to reach the market instead of withering on the vine. This piece explains why; in a nutshell:

• Venture capital is not flowing into energy projects (only 2 percent of venture capital went to energy projects in 2016) partly because these projects often require larger up-front costs;
• Established energy institutions are risk averse, and in the case of regulated utilities, have a guaranteed rate of return—utilities, for example, generally spend only 0.1% of revenue on R&D.

By investing in energy RD&D (both basic and applied), the federal government unlocks private funding, creating a healthy innovation ecosystem for energy technologies. From solar power, to wind power manufacturing, to the shale gas revolution, and more—DOE has been an “indispensable partner in American energy innovation.”

The President cedes leadership to China

Let’s take our federal investments in energy storage as an example. As the president backs away from RD&D for energy storage, other countries are stepping up. China, India, Germany, the UK, Canada, and Australia have dedicated policies and strategies to advancing energy storage. Elsewhere around the world, policymakers see the value of energy storage and want to be part of a global market that is set to double six times by 2030.

China, for example, is making enormous government investments in storage. Chinese officials see these investments as strategic, and the country is poised to be the clean energy leader of the next decade and beyond. Last fall China published a national plan on the development of the storage industry. Chinese companies already control global markets for key battery components, and China is set to be a global superpower in storage technologies in the 2020s.

The president is proposing that the U.S. simply fold—and the stakes are high: nothing less than who will hold the jobs of the future.

The Administration’s budget will hurt our National Laboratories

Our system of 17 national laboratories “have served as the leading institutions for scientific innovation in the United States for more than seventy years,” according to the DOE’s website. They also serve as anchor institutions that are critical to local economic development—and simultaneously training the next generation of scientists and engineers. Secretary Perry said in January, “DOE’s 17 laboratories are the crown jewels of American science.” For all these reasons, people across the ideological spectrum agree that our nation’s National Labs are critical to innovation and to our nation’s competitiveness.

The thing is, the national labs are funded by government agencies—primarily DOE, to include both Basic Energy Sciences in the Office of Science as well as the applied technology offices in the Office of Energy. This means that federal budget cuts can translate into cuts—and job losses—at national labs.

In Colorado, the National Renewable Energy Laboratory (NREL) receives about three-quarters of its funding from EERE, according to a report last year on the State of the DOE National Laboratories. The uncertainty created by the administration’s proposed budget is leaving NREL’s 1,700 employees, plus hundreds of contractors, interns, and visiting researchers, in limbo about their future.

In Tennessee, Oak Ridge National Laboratory eliminated 350 jobs in 2017, although it’s unclear how much of that had to do with proposed budget cuts.

Conclusion

Any appropriator will tell you that a president’s budget is basically meaningless, because Congress holds the purse strings. Let’s hope these appropriators continue to recognize the value of applied energy technology and hold the administration’s feet to the fire.

My grandfather died of black lung disease in 1988.

Thirty years later, there’s no way that other families should be going through what mine and so many others have. And yet today the disease is making a strong and frightening resurgence. How is black lung related to economic development and mine reclamation? It turns out Congress has an opportunity to address all three by passing the RECLAIM Act—but only if leaders don’t take their eyes off the ball.

What is black lung disease?

The effect of black lung disease. Photo: LeRoy Woodson, Wikimedia

Coal worker’s pneumoconiosis—known as black lung disease or simply black lung—results from long-term exposure to coal dust. The small particles build up in the lungs over time, since the body can’t expel them, leading to inflammation, fibrosis (the buildup of excess connective tissue), and in the worst-case scenario, necrosis (cellular death). Black lung is similar to other forms of lung disease caused by exposure to silica dust. The early stage of the disease is called simple black lung, while the later stage (and more debilitating) form is called complicated black lung.

As the disease progresses, it quite literally becomes harder and harder to breathe. The disease has no cure (short of a lung transplant, only available for miners healthy enough to qualify).

Black lung is, however, entirely preventable—simply by avoiding inhalation of coal dust.

The Obama administration developed stricter rules to lower the level of respirable dust, and to protect coal miners from the health dangers of exposure. Coal companies fought the rule tooth and nail, and lost in court.

But now the current administration is “reevaluating” the rule meant to protect miners’ health as part of its anti-regulatory agenda, although the current head of the Mine Safety and Health Administration claims that the agency has “no immediate plans” to weaken the rule.

“Mining disasters get monuments. Black lung deaths get tombstones.”

In my grandfather’s time underground, the causes of black lung weren’t well understood. But now we know how to prevent the disease—by reducing exposure to coal dust.

And yet, now, near the end of the second decade of the 21^st century, the disease is actually on the rise. The National Institute for Occupational Safety and Health (NIOSH) has uncovered the largest cluster of complicated black lung cases ever reported: 416 cases reported in three central Appalachian clinics from 2013 to 2017. The study followed an investigation by NPR last year that found 963 cases from 11 clinics since the beginning of the decade. In NPR’s ongoing coverage, some 2,000 cases have been documented, far more than government statistics.

Even more alarming, the disease seems to be affecting younger miners, in their 50s, 40s, and even 30s. Why? Epidemiologists have linked the new wave of black lung cases to breathing in more silica dust, likely the result of a long-term shift to mining thinner seams of coal. Getting to these thinner seams requires cutting into surrounding rock—creating silica dust that is also breathed by miners.

The human cost of this disease is almost immeasurable. Have a listen to NPR’s audio report on the NIOSH study, which features several miners suffering with the disease. Local officials call this cluster a public health emergency. As one clinic director notes (also in the NPR story):

Mining disasters get monuments. Black lung deaths get tombstones. And I’ve seen many a tombstone in 28 years from black lung. And I’m seeing more now. A lot more now.

Federal support

According to the Department of Labor, 76,000 miners have died of black lung since 1968. To support miners and families when the coal company can’t be identified or is no longer in business, in 1977 Congress set up the Black Lung Disability Trust Fund, which has so far shelled out $45 billion in compensation to miners and their families. (When the coal company responsible for a miner’s disability can be identified, it often takes many years for miners to receive compensation, because the company can hire expensive lawyers and its own doctors to dispute the diagnosis, creating an endless backlog of red tape and bureaucracy.)

Payments from the trust fund go to present and former coal miners in part for medical payments arising from disability from working in the mines. The fund also provides monthly payments to disabled miners and their surviving dependents. My grandmother received those payments after my grandfather passed away.

The money for the fund comes from a per ton excise tax on coal, paid by coal companies.

That tax, though, is set to revert to low, 1977 levels at the end of 2018. The Government Accountability Office is currently studying how this reduction would affect the solvency of the Trust Fund. With all the coal companies going bankrupt in the last few years, there may well be a funding crisis on hand for the Black Lung Disability Trust Fund.

Congressional action?

What does all this have to do with abandoned coal mines and economic development?

As I’ve written, the RECLAIM Act, H.R.1731, would release $1 billion over 5 years to clean up and repurpose long-abandoned coal mines. The House version would prioritize projects that spur local economic development. This would represent a win-win for coal communities suffering from the downturn in the industry. Rep. Hal Rogers (R-KY) has championed this legislation in Congress.

Even though RECLAIM would release money from the Abandoned Mine Land Fund, it still represents a payment out of the Treasury; because of budgeting rules, the legislation requires a “pay-for”, meaning adding new revenue or new cuts to offset the payments. Rep. Rogers worked with his colleagues and proposed extending the coal excise tax for the Black Lung Disability Trust Fund at current levels for an additional 10 years.

With that change, the bill now represents a win-win-win—ensuring the continuation of much needed medical payments and compensation for miners while also cleaning up abandoned mine sites by funding projects that simultaneously spur local economic and community development.

Opposition from the usual suspects

Rogers and his supporters are working to attach the bill to the Omnibus spending bill for Fiscal Year 2018, which must be completed by March 23 to keep the government open.

Coal mining companies and their national trade association the National Mining Association (NMA), though, hate the RECLAIM Act and are working hard to kill it. All of their lobbying in the name of reducing taxes that would pay for the mess they’ve made, in terms of both environmental destruction and human suffering.

Where’s the leadership?

US House leadership is currently putting together its omnibus spending bill for FY 2018. Is RECLAIM on their minds?

Senate Majority Leader Mitch McConnell, who hails from Kentucky, says that he supports RECLAIM, but actions speak louder than words. Will he acknowledge the broad public support for RECLAIM by his constituents?

As a first generation American, my grandfather was proud to pay his taxes. Coal companies should be too. It’s unconscionable—and sadly, unsurprising—that coal companies continue to put profits over people.

UPDATE (3/23/18): As of Friday morning, both the House and Senate have approved the $1.3 trillion spending plan for FY 2018, although its fate remains a bit unclear after threats of a veto from the president. Congressional leaders failed to include the RECLAIM Act in the bill–an utter failure of leadership to address real and pressing problems in coal country.

The Budget Process

The President’s budget request usually happens in February each year, as the Congressional appropriations process begins for the upcoming fiscal year in October. This request follows a massive budget deal signed into law by the president last week. In addition to lifting the debt ceiling, the deal raises domestic and military spending levels by $300 billion in total through September 2019. And it keeps the government open for another six weeks while lawmakers work out a longer-term spending bill that will fund the government through the end of FY 2018, which runs to the end of September.

Republicans seemed eager to raise spending as well as the debt ceiling, even though the party fought tooth and nail against the Obama administration on these issues. Still, Congress rejected the president’s proposed budget cuts last year, giving a bit of hope that Congress will ignore his current proposal as well.

The Hit List

• ARPA-E, funded at $261 million in FY 2017, would receive no funding in FY 2019. According to the White House, the agency “will wind down operations in FY 2018 with the expectation that it will shut down in FY 2019, with remaining monitoring and contract closeout activities transferred elsewhere within DOE.” Given wide bipartisan support, this seems unrealistic.
• Energy Efficiency and Renewable Energy (EERE) is slated for drastic cuts—from $2.1 billion in FY 2017 down to just $696 million in FY 2019. This represents a two-thirds cut in funding for clean energy R&D, not much better than the 72 percent cut reported earlier.
• The Office of Electricity Delivery and Reliability (OE) would be split into two offices focusing on grid reliability (Electricity Delivery) and cybersecurity. Together, the two offices would receive $157 million in FY 2019, which is still a 31 percent cut from OE’s enacted FY 2017 level. Worse, energy storage R&D faces a sharp 74 percent cut ($8 million in FY 2019 compared to $31 million enacted in FY 2017).
• Other important programs within Electricity Delivery are also facing steep cuts: transmission reliability and resiliency ($44 million to $13 million) and resilient distribution systems ($54 million to $10 million). These cuts seem particularly harsh given all the recent impacts on the electricity system due to severe weather.
• The budget also completely axes the Low Income Home Energy Assistance Program (LIHEAP) block grants managed by the Department of Health and Human Services (HHS). Last year, LIHEAP released about $3.03 billion in block grants for states and tribes to help low-income households pay heating and cooling bills. The president’s budget proposes $0—meaning states and tribes would be left to figure out how to make up the shortfall.
• The president also proposes eliminating the successful Title 17 Innovative Technology Loan Guarantee Program. The loans have helped companies commercialize energy technology, and the program has turned a profit for taxpayers, raising more than $1.79 billion in interest payments since its inception in 2005. The program could even be used to support energy infrastructure projects.

Reflecting the Administration’s Ideology

This president’s budget request reflects a prioritization of basic research and early stage R&D over later stage R&D—but it’s misguided to slash all funding that is deemed “applied research” and assume that the private sector will pick up the slack. As I’ve written previously, DOE’s new organizational structure separates basic research from applied science. The short summary from DOE notes that the Office of Science is slated to receive $5.4 billion in funding in FY 2019—the same as FY 2017 enacted—while the Office of Energy faces a cut of $1.9 billion—roughly a 43 percent cut compared to the $2.5 billion enacted in FY 2017:

“The FY 2019 Request provides $2.5B for energy and related programs, $1.9B below FY 2017 Enacted, and continues the Administration’s prioritization of the early-stage R&D that takes place at the National Laboratories.”

What the number crunchers at the White House don’t seem to recognize is that the National Labs work on both basic science and applied science, as well as both early stage and later stage R&D. All parts of the innovation ecosystem are needed in order to bring new technologies to commercialization.

What’s Next

Congress will continue its work on funding the government for the rest of FY 2018, which ends at the end of September. Once that work is complete, it will move toward deciding on spending levels for FY 2019. We’ll be pushing for Congress to use the power of the purse string to invest in clean energy technology and innovation and ignore the White House’s proposed budget.

Update 2/13/18, 12:11 pm: An additional bullet point was added, mentioning the elimination of the Title 17 Innovative Technology Loan Guarantee Program.

We’ve been writing about coal’s decline and its implications—and setting the record straight on misinformation about coal—for quite some time: responding to the administration’s cheerleading of coal, assessing and understanding the shift away from coal-fired electricity, why the transition away from coal is hard on workers and communities, and how intrepid business leaders in Coal Country are leading the way to new economic opportunities.

We kicked off a blog series recently with an explanation of why a slight increase in coal jobs in 2017 is no indication of a long-term trend. In this second Coal in Context blog, I’d like to highlight a short video on the reasons behind coal’s decline.

The need for a just transition

Here at UCS, we value facts and evidence—and we’re doing our part to set the record straight in a time of great uncertainty. It’s important to emphasize that the coal industry is not returning to its heyday and will instead continue to decline, despite what you may hear from administration officials and the president himself. That propaganda is dangerous because it leads to false hope—leading some to refuse training opportunities in other industries, hoping that coal mining jobs materialize.

Let’s take the longer-term view and understand that coal communities will need to develop new economic sectors to support good-paying jobs in the future—and that it is our collective responsibility to invest in those communities—through proposals like the RECLAIM Act and the POWER Initiative—so they can succeed.

We also need to take the longer-term view on the power sector as a whole– to address the urgent threat of climate change. Yet the administration continues its efforts to rescind the Clean Power Plan, something I testified against back in November in West Virginia. Please join our efforts to push back on these misguided actions—and share the video with your friends to help spread the truth.