Key Takeaways
President Trump has announced $700 million in subsidies to support the use of U.S. coal and its export to other parts of the world.
This program is designed to help upgrade 13 power plants in 10 states to extend their lifetimes, restart a coal plant in Maryland, and support the construction of the first two new coal plants in over a decade, to be built in Alaska and West Virginia.
It will also assist with a new coal export terminal in Oakland, located at a former Army base.
President Trump has long championed coal as a major energy source in the United States because of its vast reserves—the largest in the world — and its dispatchability.
President Donald Trump announced a plan to spend nearly $700 million to support coal-fired power plants and coal exports. Using authority under the Defense Production Act, the funds will support 13 coal plants across the country and help build coal plants in Alaska and West Virginia, the first new U.S. coal plants since 2013. The money will also help restart a shuttered coal-fired power plant in Maryland and support construction of a coal export terminal in Oakland, California, supporting more than 1,400 jobs. Existing coal plants can invest in upgrades that extend their operational lives for decades and reinforce the reliability of the U.S. electric grid.
According to Trump, $500 million of federal funds will go towards saving 13 existing coal plants ($425 million) and opening a new export terminal in California ($75 million). The 13 coal plants are located in Kentucky, North Carolina, Indiana, Tennessee, Arkansas, Arizona, Oklahoma, North Dakota, Wisconsin, and West Virginia. The Department of Energy will grant $200 million to build new coal plants in Alaska and West Virginia and restart a coal plant in Maryland. Private companies are expected to match or exceed that investment, bringing the total to approximately $386 million.
The West Gateway Terminal, which the coal industry has sought to build for roughly 20 years, would operate around the clock and ship more than 12 million tons of coal annually once fully online. The project will break ground this summer and is projected to be online by the summer of 2028. The project will benefit coal communities in Wyoming, Utah, and other Western states. The terminal will be sited at the Oakland Bulk and Oversized Terminal, a decommissioned Army Base near the entrance to the Bay Bridge, operated by developer Phil Tagami, who has sought to convert it into a marine shipping terminal. That effort has faced significant pushback from the city, which owns the land, as well as from local residents and stakeholders. The U.S. Energy Department said coal exports from the terminal would go to “allied nations” including Japan, South Korea, Taiwan, Vietnam, and Malaysia.
“For too long, limited West Coast export capacity has constrained America’s ability to move coal and other energy resources to global markets,” said DOE Secretary Chris Wright. “By investing in both coal generation and critical export infrastructure, including the West Gateway Terminal Project, the Energy Department is strengthening U.S. energy security, reinforcing strategic supply chains, and advancing American energy dominance.”
According to President Trump and his energy advisors, coal power is a matter of national security because of rising energy costs and the growth of artificial intelligence data centers. Residential electricity bills have increased nearly 11% since Trump took office in January 2025, according to the latest data from the U.S. Energy Information Administration. IER, however, has shown that electricity price increases are the result of climate policies, mainly coming from blue states, and not demand increases from AI.
President Trump said, “If you look at China, if you look at so many of the successful countries, they’re using coal.” “If you look at some of the real great failures, countries, they’re using wind.”
The Trump administration has approved 76 new permits for coal since President Trump took office last year. The Trump administration has also directed fossil-fueled power plants in Michigan, Indiana, Colorado, and Washington state to continue operating past their retirement dates to meet rising electricity demand and to increase the reliability of the electric grid.
Last year, coal accounted for 17% of electricity generation, down from 45% in 2010 due to onerous regulations targeting it under the Obama and Biden administrations and competition from low-cost natural gas after the fracking era set in. Natural gas accounted for around 41% of U.S. electricity generation last year, with the rest coming mainly from nuclear energy (18%), wind and solar power (17%), and hydro (6%). The United States has the largest proven coal reserves worldwide.
Analysis
The Defense Production Act originated during the Korean War to give the president authority to prioritize defense contracts, allocate scarce materials, and incentivize the production of critical goods when markets alone wouldn’t suffice to meet national defense needs. In mid-summer 2022, the Biden administration invoked the Defense Production Act to advance its climate agenda, granting the Department of Energy authority to accelerate domestic production of solar panels, heat pumps, and transformers for the electrical grid. Now, due to growing electricity demand and lengthy permitting times for new power plants, the Trump administration is using the Defense Production Act to provide $700 million to the coal industry to keep existing coal plants online in ten states, build two new coal plants in Alaska and West Virginia, restart a closed coal plant in Maryland, and build a coal export terminal in Oakland, California.
The U.S. coal industry has struggled due to onerous regulations from the Obama and Biden administrations and competition from low-cost natural gas following the use of hydraulic fracturing to drill in shale basins. President Trump has long championed coal as a major energy source in the United States because of its abundant reserves and dispatchability. Until Congress imposes serious constraints on the use of the Defense Production Act, presidents will continue to invoke it to advance their policy agenda.
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