The Trump administration will channel nearly $700 million into the U.S. coal industry on Thursday, using a Cold War-era defense law to fund power plants and a contested California export terminal. The move invokes the Defense Production Act to declare coal essential to national security. Kit Kennedy of the Natural Resources Defense Council called it a taxpayer giveaway to "coal billionaires."
$425 million of the total will go to 13 existing coal plants. They are scattered across ten states: West Virginia, Kentucky, North Carolina, Indiana, Tennessee, Arkansas, Arizona, Oklahoma, North Dakota, and Wisconsin. The money comes from the Defense Production Act, a statute originally written to mobilize steel for the Korean War.
The beneficiaries include some of the biggest names in U.S. utilities. Duke Energy, Hallador Energy, Oklahoma Gas & Electric, and at least one American Electric Power subsidiary are on the list. Another $75 million in DPA funds is earmarked for the Oakland Bulk and Oversized Terminal in California.
That project has been a political and legal battleground for nearly two decades. If the terminal moves forward, it would open a new export route for up to 12 million tons of coal annually from Wyoming and Montana. Conservation groups have blocked it repeatedly.
They argue open coal cars would foul the air in surrounding communities and that the facility locks in global coal demand for decades. The question now is whether federal defense dollars can override California’s permitting power. The legal fight is almost certain. "Propping up coal billionaires with taxpayer money is one more way for the Trump administration to put polluters first," said Kit Kennedy, managing director for power at the Natural Resources Defense Council. "The best thing for the air, the climate and our utility bills is to let these plants retire peacefully."
Separate from the DPA money, the Energy Department is awarding $185 million in grants. Those funds support two new coal plants — one in Alaska, one in West Virginia — and the restart of the AES Warrior Run station near Cumberland, Maryland. The companies involved, Terra Energy Center Corp. in Alaska and TerraPurus Inc. in Mount Storm, West Virginia, will contribute matching funds.
The combined project spend reaches $386 million. If completed, these would be the first new coal plants built in the United States since 2013. That is a striking fact.
The industry has been in structural decline for years. Coal’s share of U.S. electricity generation has collapsed from over 50% at its 2007 peak to around 16%-17% today. The Energy Information Administration projects that share will ease further to roughly 15% in 2026.
The administration’s argument rests on a specific national security thesis. Interior Secretary Doug Burgum has framed winning the artificial intelligence race as a national defense imperative. Coal, in this view, provides the essential baseload power that data centers require.
Trump has repeatedly called coal "clean" and "beautiful." The White House schedule lists a 3 p.m. Oval Office event Thursday on "Beautiful, Clean Coal."
There is some grid reality behind the rhetoric. electricity demand is heading for record highs. The EIA projected consumption would hit 4,283 billion kilowatt-hours in 2026, up from 4,097 billion in 2024. Data centers are the primary driver.
Coal generation nationally was up roughly 13% in 2025, according to federal data, as utilities fired up idled capacity to meet summer and winter peak demand. Trump has been the Defense Production Act’s most aggressive user in the energy space. He previously invoked it to attempt to restart oil production off California’s coast.
In April 2026, he issued a Presidential Determination formally declaring coal supply chains and baseload power generation essential to national defense. That followed a February executive order directing the Department of War to enter power purchase agreements with coal plants to service military installations. A January push from the Energy Department reinstated the National Coal Council.
The Biden administration had disbanded it in 2021. Peabody Energy CEO Jim Grech now chairs the council. Peabody, the largest U.S. coal producer, reported a 2025 rebound in U.S.
The company noted coal-fired generation was up significantly year-over-year. But the broader market tells a more qualified story. The Zacks coal industry sits in the bottom 3% of all tracked sectors.
Earnings estimates for 2026 have been revised down nearly 55%. Cheap natural gas and falling renewables costs have made coal economically uncompetitive on most grids. The $700 million commitment is the largest single federal infusion into the coal sector since Trump’s return to the White House.
It lands in a market that has spent nearly two decades shrinking. The policy says one thing. The reality says another.
Federal dollars can subsidize plants. They cannot force utilities to run them when cheaper power is available. They cannot reverse the cost curve that has pushed coal to the margins of the U.S. electricity mix.
What this actually means for your family depends on where you live. In coal-producing states like West Virginia and Wyoming, the funding sustains jobs and local tax bases that have been eroding for years. In port-adjacent communities near Oakland, it means a renewed fight over air quality and rail traffic.
For electricity customers nationally, the impact on bills is likely negligible — coal plants receiving subsidies will still have to compete in wholesale power markets where gas and renewables set the price. Both sides claim victory. Here are the numbers.
The administration can point to 13 plants kept online, two new builds, and a potential export terminal. Opponents can point to a 15% generation share that keeps falling, a sector in the bottom 3% of all industries, and earnings estimates slashed by more than half. The grid, not the DPA, will ultimately answer whether this $700 million delays the trajectory or merely marks a pause.
Why It Matters: The Oakland terminal decision tests whether federal defense powers can override state environmental law — a precedent that would extend far beyond coal. If the DPA can force open a California port, it can be used to override state-level blocks on pipelines, LNG terminals, and mining projects across the country. The legal outcome here shapes the next decade of energy infrastructure fights. - The Trump administration is channeling $700 million in federal funds to coal plants, new construction, and a California export terminal under the Defense Production Act. - The Oakland terminal has been blocked for nearly 20 years; the $75 million DPA allocation sets up a major legal test of federal versus state permitting authority. electricity generation has fallen from over 50% in 2007 to roughly 16% today, a trend federal subsidies are unlikely to reverse. - The funding targets 13 existing plants across 10 states, two new coal plants in Alaska and West Virginia, and the restart of a Maryland facility.
The immediate next step is the Oval Office announcement at 3 p.m. Thursday. After that, attention shifts to the courts.
Environmental groups have already signaled opposition. The legal question is whether the Defense Production Act preempts California’s environmental review process. A ruling in the administration’s favor would mark the most significant expansion of DPA authority in the energy sector since the law’s creation.
A ruling against it would leave the Oakland terminal where it has been for 19 years: blocked. Watch for lawsuits to be filed within days of any formal funding award.
Key Takeaways
— - The Trump administration is channeling $700 million in federal funds to coal plants, new construction, and a California export terminal under the Defense Production Act.
— - The Oakland terminal has been blocked for nearly 20 years; the $75 million DPA allocation sets up a major legal test of federal versus state permitting authority.
— - Coal's share of U.S. electricity generation has fallen from over 50% in 2007 to roughly 16% today, a trend federal subsidies are unlikely to reverse.
— - The funding targets 13 existing plants across 10 states, two new coal plants in Alaska and West Virginia, and the restart of a Maryland facility.
Source: OilPrice.com
