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US coal sector nudges feds to deem supply chain critical as COVID-19 spreads

The U.S. coal industry is concerned that the federal government has not explicitly included the supply chain backing coal-fired power plants to be critical infrastructure as the country combats the COVID-19 pandemic.

The U.S. Department of Homeland Security's Cybersecurity and Infrastructure Security Agency, or CISA, designated the electricity industry broadly as critical infrastructure in a March 19 memo. However, it did not explicitly mention the supply chain feeding coal-fired power plants, coal advocacy group America's Power, formerly known as the American Coalition for Clean Coal Electricity, wrote in a March 20 letter to CISA Director Christopher Krebs that was provided to S&P Global Market Intelligence.

Under the "energy" category in an initial list of essential critical infrastructure workers, CISA lists workers in the electricity industry, petroleum workers, and workers in the natural gas and propane gas sectors.

"I respectfully urge you to update the list to include and reference the importance of the supply chain that supports our nation's fleet of coal-fired power plants, which provide almost one-quarter of the nation's electricity," wrote America's Power President and CEO Michelle Bloodworth.

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Writing on behalf of America's Power members, including electricity generators, coal producers, railroads, barge operators and equipment manufacturers, Bloodworth urged the DHS to consider the entire coal supply chain as a critical function. Bloodworth said the ability to maintain a large stockpile of coal at each power plant makes the coal fleet one of the most fuel-secure sources of power in the country. The industry has offered similar arguments, refuted by coal's opponents and competitors, to make the case for incentives and other policies to keep coal-fired power plants running in the U.S.

The DHS document outlines federal recommendations to local governments on which industries to prioritize and keep open as critical infrastructure during an emergency such as the COVID-19 pandemic. It is not a federal directive or standard, and CISA said it will update the list as the response to the viral outbreak evolves.

West Virginia exempted coal from restrictions placed on state businesses in response to the pandemic, and Pennsylvania initially included coal mines in a broader restriction order but quickly reversed its position on the industry and other sectors. The move in Pennsylvania would have shut down mines accounting for about 6.5% of the country's 2019 coal production and threatened the financial positions of companies such as Consol Energy Inc. and Corsa Coal Corp., which mine nearly exclusively in the state.

The U.S. coal mining sector also requested more direct help from the federal government in the wake of the pandemic. In a March 18 letter to President Donald Trump and other lawmakers, the National Mining Association requested tax breaks, reduced federal royalty payments and inclusion in policies meant to expand the credit available to businesses in the country.

While at least one lawmaker, Rep. David McKinley, R-W.Va., wrote to support similar measures to support the coal sector, some recoiled at the idea. House Natural Resources Chairman Rep. Raul Grijalva, D-Ariz., and Rep. Matt Cartwright, D-Pa., urged Trump and other leaders to ignore the requests in the mining association's letter.

The reduced economic activity resulting from the COVID-19 pandemic may accelerate the decline of the U.S. coal industry by reducing demand for electricity. Lower electricity generation could further squeeze coal producers, and many are already in a precarious financial condition.

"Unlike other industries asking for cash bailouts, the coal industry is not," the National Mining Association wrote in a March 23 email as part of its Count on Coal initiative. "Taking commonsense steps to reduce or defer taxes and royalties and to provide access to credit is smart, achievable action to keep the industry and its employees going through an unprecedented crisis."

Instead of supporting the industry, lawmakers hoping to help U.S. coal communities may opt to support short- and long-term economic development issues presented by COVID-19 in those regions. A coalition made up of groups including the Union of Concerned Scientists, Appalachian Voices, and the Just Transition Fund wrote a March 23 letter to Congress calling for significant investments in rural healthcare, additional benefits for those diagnosed with black lung disease, prioritized relief for small businesses in rural areas, support for rural development agencies and expanded access to broadband infrastructure.

"The pain felt in coal communities during this unprecedented crisis will be exacted on those who are already in turmoil, threatening to make a bad situation much worse," Just Transition Fund Executive Director Heidi Binko said in an emailed statement. "With an insufficient public health infrastructure, hundreds of thousands suffering from black lung disease, and a fragile economy that lacks adequate investment and broadband connectivity, the families in coal country are especially vulnerable right now."