President Donald Trump plans to allocate a support package of $700 million for coal power generation, citing an unnamed White House official ahead of a formal announcement by the U.S. President.

The plan is to invoke the 1950 Defense Production Act, which grants the president of the country powers to provide financial support to industries considered critical for national security. The money will be used to upgrade more than 12 coal power plants, the report said.

Of the total sum, more than 50% would go towards coal power plant upgrades, another $185 million will be used to match corporate commitments for coal projects in Alaska, Maryland, and West Virginia, and the remaining $75 million will be invested in the West Gateway export terminal in California, the Reuters report also said.

Coal has been in decline as part of the U.S. power generation mix, with cheap and abundant natural gas replacing a lot of capacity. However, President Trump has named the energy industry critical for national security, reversing the Biden administration’s efforts to phase out coal completely.

Earlier this year, the Energy Information Administration said power plants scheduled for a shutdown this year may be kept operating for longer, after the Department of Energy warned in a January report that if the scheduled shutdowns take place, the U.S. will face a 100 times higher risk of power shortages by 2030 than if it keeps the existing facilities operating.

Source: oilprice