(BY: DAN MOLINSKI, THE WALL STREET JOURNAL) – West Virginia Gov. Jim Justice is asking President Donald Trump to extend his support for the coal industry by providing some $4.5 billion a year in federal funding for Eastern coal, a proposal miners in Western states say goes against free-market principles.
The governor, who days ago switched parties to Republican from Democrat, said in an telephone interview Wednesday that Mr. Trump’s elimination of burdensome regulations have been very helpful in starting to get the U.S. coal industry back on its feet. But he said Appalachian region coal mines specifically—and the thousands of jobs they provide—remain at risk because of rising competition from natural gas and less-labor-intensive coal mines in Western states such as Wyoming, the nation’s leading coal producer.
If the Eastern coalfields were to disappear altogether, he said, then any disruption to the power grid in the East because of terrorism or other reasons could lead to tragedy because there would no longer be a nearby, abundant and easily-accessible energy source.
“The survivability of the Eastern coalfields is very, very iffy,” he said. “And if you lose the Eastern coalfields, you are putting the country at risk beyond belief.” He insisted his funding proposal isn’t for a subsidy, but rather a “homeland security incentive.”
Mr. Justice said he made the proposal directly to President Trump in the Oval Office recently. It calls for federal funding to pay Eastern power plants $15 for each ton of thermal coal they buy from the Central or Northern Appalachian region, which includes states such as parts of West Virginia, Ohio and Pennsylvania. This, for example, would allow a utility to pay something like $50 a ton to a mining company, but in actuality only be paying $35, he said. At 300 million tons a year, that could cost the U.S. $4.5 billion annually, he added.
“In the scope of things, that would be a drop in the bucket to protect ourselves,” Mr. Justice said. “And looking at the other side, you would put thousands and thousands and thousands of people to work, and the net-net of that is that the $4.5 billion would get eroded tremendously, so that it may end up costing almost nothing.”
Mr. Justice’s family owns businesses in the region, but he said they mostly produce metallurgical coal for steel-making rather than thermal coal, so his proposal wouldn’t directly benefit him. “I am not in play trying to pat myself on the butt,” he said.
Travis Deti, executive director of the Wyoming Mining Association, said “we certainly understand” Mr. Justice’s desire to defend and preserve jobs and industry in his region of the U.S. But he said the proposal seemed misguided. “We very much think it’s best when the government’s not involved, and feel the free market instead should be allowed to work,” Mr. Deti said.
“We need to stick together,” Mr. Deti said, referring to the overall U.S. coal industry, adding that he believes Mr. Justice should perhaps allow more time for Trump’s regulatory relief to the coal industry to take effect.
Mr. Justice said President Trump and Energy Secretary Rick Perry have given a “favorable” response so far. The Energy Department wasn’t available to comment.
Write to Dan Molinski at Dan.Molinski@wsj.com
Appeared in the August 10, 2017, print edition as ‘Governor Seeks Subsidy to Save Coal.’