By Tyson Slocum, Energy Program Director, Public Citizen
Last month in a speech to the Economic Club of New York, former President Donald J. Trump pledged to “cut energy prices in half, or more, within 12 months of taking office”. Experts across the political spectrum correctly mocked this absurd boast, noting that one Trump tool to achieve this fanciful pledge is to “drill, baby, drill”, which is not policy, but political rhetoric meant to excite his base, according to a conservative scholar at the American Enterprise Institute. Five days later during the September 10 debate with Vice President Kamala Harris, Trump claimed he would lift oil production to “five times, four times, five times higher” than under the start of the Biden/Harris administration.
Oil production was 11.2 million barrels of oil per day when Biden/Harris took office in January 2021, and it was last measured at 13.2 million in July 2024—or 18.5% higher, making the United States not just the planet’s largest producer, but the largest of any country in the history of the world. Trump’s claim that he’ll boost that 4x-5x is ridiculed by industry insiders as “nonsense” in part because the massive production increase would crash prices, making oil unprofitable. Indeed, proving Trump doesn’t understand the oil industry, the CEO of two U.S. oil producers have been sanctioned by federal regulators for conspiring with OPEC to reduce domestic oil production in an effort to artificially prop up prices. Despite Trump not understanding basic economics of the oil industry, he was at least blunt in asking them to give his campaign $1 billion in exchange for a quid pro quo delivery of environmental and tax rollbacks favored by the industry, met with oil executives a second time in the heart of the Permian Basin raising cash for his campaign, prompting me to observe that oil CEOs provide Trump with “a bottomless well of cash”. While Trump’s absurdly exaggerated promises of oil production levels can be dismissed as empty campaign rhetoric for an uninformed base, what’s more worrying is his quid-pro-quo promise to Big Oil to roll back taxes and environmental regulations to benefit the industry in exchange for campaign donations. This is not only a blatant act of corruption, it also spells utter disaster for the environment and the future lives of American families across the country.
Trump’s plan as outlined before the Economic Club of New York to achieve a “massive increase in domestic energy supply” in oil, natural gas and electricity is predicated on his proposed policy of national energy emergency declaration. It’s Déjà vu all over again with Trump’s team pursuing yet another pay-to-play emergency declaration corruption playbook. To understand what Trump intends with his national energy emergency 2.0, we simply review the extensive paper trail from his Presidency (of course, the easiest path to lower electricity prices is simply to deploy more wind and solar, which is not part of Trump’s plan).
Let’s take a brisk walk through Trump’s first term efforts to declare a national emergency to bail out failing fossil fuel donors:
- Just 67 days after Trump’s inauguration, Bob Murray—then-CEO of coal miner Murray Energy, who passed away four years ago—submitted an “Action Plan” to Trump’s Secretary of Energy Rick Perry outlining a list of demands, including “Implement Emergency Actions Relative To The Security And Resiliency Of The Electric Power Grids”, where DOE would “issue an emergency directive to have an immediate study done of the security and resiliency of our electric power grids. DOE will direct that no power plants having an available fuel supply of at least forty-five days be closed during the study period”.
- The memo demand for DOE to issue a study was a preview of an in-person meeting the next day with Rick Perry arraigned by Murray’s lobbyist Andrew Wheeler—who Trump would later name as head of the Environmental Protection Agency. The official Department of Energy photographer who immortalized the meeting was fired for doing so.
- Just sixteen days after meeting with Bob Murray and his demand that Perry issue an emergency study of the need to structure a bailout of coal power plants that feature at least a 45-day onsite fuel supply (in the form of the huge piles of coal featured in the fence line of coal power plants), Rick Perry directed his Chief of Staff to immediately commence such a study.
- While Murray waited on the study to be published, he pressed on with a separate demand. On August 4, 2017, Murray wrote a letter to President Trump reminding him of his meeting 9 days earlier with Murray and Chuck Jones, CEO of FirstEnergy Corp during an event in Youngstown, Ohio where Murry recalls Trump demanding Perry declare a Section 202c emergency to bailout FirstEnergy and Murray Energy.
- Four days later, Murray Energy delivered $1 million to Trump’s SuperPac, America First Action on August 8, 2017.
- Ten days after delivering $1 million to Trump, Murray wrote to Energy Secretary Rick Perry, demanding immediate action on the emergency bailout declaration, writing “that White House lawyers have some concern regarding 202 C . . . While we are trying to reduce the level of concern of White House lawyers – and we think we are having some success, time is a luxury we do not have . . . . Secretary Perry has the ability to do something if he is willing to step up and fight for coal jobs . . . DOE must enact 202 C.”
- Career White House lawyers were correct that the emergency powers vested in the Secretary of Energy in Section 202c of the Federal Power Act were not appropriate to use simply to provide a financial lifeline to well-connected power plant and coal mine owners. Rather, such authorities could only be used during a genuine emergency, typically stemming from a natural disaster. But Murray pressed on, and the next month Perry would deliver for Bob Murray: On September 28, 2017, Secretary Perry proposed an emergency rule (Docket RM18-1) for final action by the Federal Energy Regulatory Commission to require consumers to bail out coal and nuclear power plants rendered “prematurely uneconomic” by cheaper gas and renewables by only providing bailouts to those generation units that could demonstrate a 90 day onsite fuel supply (up from Murray’s proposed 45 days). The cover letter of the emergency filing was signed by Deputy General Counsel for Energy Policy Bernard L. McNamee II, who Trump would later appoint to the Federal Energy Regulatory Commission.
- Six days later, I was asked to testify before Congress about the plan, where I noted: “The DOE rulemaking request argues that wholesale power markets are not adequately pricing the “resiliency attributes” of “fuel secure” generation. DOE then proposes to guarantee full cost-recovery for units that can demonstrate a 90-day on-site fuel supply, as the DOE claims that the continued operation of such units is essential for grid resilience. Conveniently for the nuclear and coal industries, only their units would qualify for such bailouts. Coal-fired power plants typically have such on-site reserves of coal piled next to their generation units, and nuclear power plants have onsite nuclear fuel to meet the standard. Recent events contradict this arbitrary standard. Hurricane Harvey, which made landfall on coastal Texas in August 2017, dumped so much rain that “[t]he external coal pile at [NRG’s] W.A. Parish became so saturated with rainwater that coal was unable to be delivered into the silos from the conveyer system . . . Having a 90-day on-site fuel source is therefore not an adequate measure of reliability or resilience.”
- On January 8, 2018, FERC voted 5-0 to terminate Bob Murray’s emergency DOE coal bailout, in part because two of the largest owners of coal power plants at the time (Dynegy and NRG) argued that the bailout would ruin the competitive markets that offered their non-coal power fleets to earn tons of profits. FERC of course is an independent agency that Trump couldn’t unilaterally control (although we warned of Trump trying to do just that in May and June of 2017). It also didn’t help Trump that the America Petroleum Institute opposed the coal bailout, principally because the handouts excluded natural gas.
- Newly released documents detail FirstEnergy’s extensive dark money lobbying and cash payments to Trump allies, Trump campaign officials and a Trump-affiliated SuperPac to influence Trump’s policies on coal and nuclear bailouts.
- Undeterred by FERC’s failure to orchestrate Trump’s coal bailout, Trump came up with quite a nefarious plan: designate uneconomic coal power plants as a national security risk. On May 29, 2018, DOE ordered the National Security Council to determine the national security implications of “premature” retirements of coal and nuclear power plants. While this May 29 request wasn’t public at the time, on June 1, 2018 the Trump White House announced that “President Trump has directed Secretary of Energy Rick Perry to prepare immediate steps to stop the . . . impending retirements of fuel-secure power facilities”. Shortly afterwords, “FERC Chief of Staff Anthony Pugliese reportedly said FERC is working with the Department of Defense, DOE and the National Security Council to identify the plants that are critical to ensuring that military bases, hospitals and other critical infrastructure can maintain operations in a disaster.”
- In October 2018, DOE proposed a rule to create Defense Critical Electric Infrastructure Information and classify such info as secret, allowing owners of power plants to self-select their facilities for such designation, with DOE extending privileged treatment while the agency reviewed the application. We believe the purpose of this rule was to give DOE the logistical tools necessary to start designating coal power plants as national security assets in order to “black box” the process involved in granting the coal facilities public subsidies. Groups like Public Citizen would be unable to challenge the handouts if the underlying methodology is a national security secret. Public Citizen’s opposition to the rule paid off, as DCEII was eliminated from the final rule issued in 2020.
- On page 282 of the March 2019 Economic Report of the President, Trump called for “the strategic need for an electricity generation reserve” for nuclear and coal, with Trump’s deputy Energy Secretary Dan Brouillette stating in November 2019 that it was a “foremost priority” for DOE to keep uneconomic coal and nuclear plants open.
Given the well-documented history of Trump aggressively seeking to utilize national emergency declarations as a cover to funnel billions of dollars in taxpayer and ratepayer subsidies to politically-favored owners of coal power plants, Trump’s current campaign pledges of a “national energy emergency declaration” must be taken as a serious threat to energy affordability and sustainability.
