Conservative rancor toward the free market in energy systems was on full display this week, as both Secretary of Energy Rick Perry and coal magnate Robert Murray made loud, unapologetic calls to subsidize coal-fired power plants.
“We don’t have a free market in the [electricity] industry, and I’m not sure you want one,” Perry said Monday at the BNEF Future of Energy Summit.
Speaking on Tuesday, Murray, CEO of the country's largest underground mining company, said that Perry “has to approve” an emergency bailout for coal and nuclear plants in order to “ensure the resilience, reliability, and security of the grid.”
Emboldened by President Trump’s promises to “save the coal industry,” conservatives who have long argued against subsidies for solar and wind power have a newfound desire for the federal government to pick winners in energy systems, as a growing number of coal plants become uneconomic and close down.
Murray, for instance, wants the DOE to approve an emergency order, under Section 202(c) of the Federal Power Act, which allows the federal government to intervene in energy markets in times of electricity reliability emergencies, though it’s only ever been used historically in times of war or sudden resource shortage.
Despite the lack of historic precedent, Murray said, “is the only option right now … it’s absolutely needed.”
Secretary of Energy Rick Perry Thinks Free Energy Markets Are 'Nonsense'
Perry told the room full of energy industry professionals and analysts that the government has always been involved in the energy markets, and always will be.
“It’s nonsense that there’s a beautiful free market in the power industry,” Perry said. What’s the good of a free market, he asked, “if when you flip the switch the electricity doesn’t turn on.”
To avoid that fate and ensure reliability, Perry argued, nuclear and coal are key.
“We’re going to have nuclear plants, we’re going to have coal plants, we’re going to have gas plants, we’re going to have renewables, we’re going to have hydro,” Perry said. “We’re going to have an all of the above energy policy in this country so we know that no matter what we get faced with, we’re going to have as many resources available as we can to feed that grid so that when the demand is put on it, it’s there to meet it.”
Of the emergency order, Perry said it’s being considered, but might not be the only way to prop up failing coal and nuclear plants.
“The 202(c) may not be the way that we decide is the most appropriate — the most efficient way to address this,” he said. “It is not the only play.”
Murray Warns that Grandmothers Will Die if Coal Doesn’t Get a Bailout
While repeatedly blaming President Obama for killing the coal industry through “excess regulation, much of it illegal,” Murray made an impassioned plea to save coal, warning that the electric grid was “dangerously close” to “collapse.”
Using the recent “bomb cyclone” and the 2014 polar vortex as case studies over and over again, Murray argued that “nothing was more resilient to keep the lights on than coal.”
If not for coal, Murray said, “the grid would have collapsed here in New York.”
“We have a responsibility in this room to make sure grandma doesn’t die on the operating table,” Murray said to the summit guests. “That’s a crude way of putting it, but we were very close to it during this polar vortex and during this bomb cyclone.”
Murray claimed that he wanted to see all forms of energy flourish, including renewables, but took repeated swipes at most others, including natural gas. “You must have reliable, resilient power grid,” Murray said. “And there are only two types of baseload generation: nuclear and coal. You can’t store wind, can’t store solar, can’t store natural gas at power plants.”
“Will we have to have a system collapse before we really recognize that something has to be done about the security, resilience and reliability of the power grid?” he added.
Murray Already Has Perry’s Ear
Last March, Murray met with — and hugged — Perry to discuss his proposed bailout for coal plants, a meeting that was made public by a DOE whistleblower who was later fired. Murray denied drafting the bailout plan that Perry’s DOE later sent to FERC, but this claim that he “had nothing to do with it” was contradicted by photos and an article published in In These Times, which proved that Murray presented “a proposal to alter the policies of the Federal Energy Regulatory Commission (FERC) to favor coal plants, as a way to increase ‘grid reliability.’”
The Grid Resilience Pricing Rule proposed by the DOE in September echoed Murray’s proposal, and some language looks to have been barely altered. The rule included special payments to power plants that could keep 90 days worth of fuel reserves on site, an arbitrary criteria that only coal and nuclear facilities would meet.
Ultimately, FERC — four of the five commissioners being Trump appointees — would unanimously reject the DOE’s proposed rule, a stinging blow to both Perry and Murray.
With those hopes for a bailout dashed, Murray is now putting his energy behind the emergency order described above and the EPA de-listing carbon dioxide as a pollutant.
Perry was ambivalent about the emergency order, which, again, Murray called “the only option” left. Former FERC Commissioner Nora Mead Brownell, an appointee of President George W. Bush, blasted the prospect of a bailout in the form of an emergency order.
“I think it’s a tragedy for a capitalist society,” Brownell said at the BNEF summit. “I think it’s a tragedy for energy markets, and it’s a real tragedy for ratepayers, who, by the way, have paid for these plants over the course of their lifetime, and again for stranded costs.”
Will Murray’s Ally Andrew Wheeler Take on the Endangerment Finding at EPA?
Murray’s other hail mary for the coal industry is for the EPA to “eliminate the endangerment finding” that is the scientific foundation of the Clean Power Plan. President Trump has already promised to repeal Obama’s signature climate change program, but the endangerment finding — a 2009 determination that carbon dioxide pollution causes climate change and poses a threat to public health—stands in the way of any complete and legal repeal of the Clean Power Plan.
This week, Andrew Wheeler is poised for confirmation to serve as the EPA’s deputy director, the agency’s second highest ranking position. This would put Wheeler next in line to lead EPA if current Administrator Scott Pruitt is forced to resign or is fired due to his countless ethics controversies.
Wheeler worked as Murray Energy’s top lobbyist in Washington DC from 2009 to 2017, and as a longtime outspoken climate denier has criticized the endangerment finding in the past.
According to a Huffington Post article on Wheeler’s confirmation hearings in February, “Wheeler could be the man to lead [the] assault” on the endangerment finding.
In March 2010, he accused the IPCC of blurring “the lines between science and advocacy” and functioning “more as a political body than a scientific body.” He suggested the EPA could “reconsider its endangerment finding without almost exclusively relying upon the IPCC,” according to remarks posted to his website.
As of Wednesday, Senate Democrats were seeking to delay Wheeler’s confirmation, but a vote is still expected this week.
If Wheeler is confirmed, Murray will have a close ally near the top of the EPA, who might have the explicit assignment to consider the endangerment finding. And if Pruitt doesn’t survive his many scandals, Murray’s recent top lobbyist will be running the agency that is, for now, legally compelled to regular carbon dioxide emissions.
Main image: Robert Murray speaks at BNEF Future of Energy Summit. Credit: Bloomberg New Energy Finance