This week, President Trump signed a Presidential Proclamation to employ the Defense Production Act (DPA) to secure coal supply chains and support affordable and reliable baseload power generation capacity. The order – part of a salvo of actions in response to the global energy crisis – will allow the administration to make purchases, commitments and financial instruments available to support coal supply chains and baseload power generation, including coal mining, rail and barge logistics, export and domestic terminals, generating unit availability and life-extension work, as well as on-site stockpiling.
“This action recognizes the unique and irreplaceable attributes of coal to our nation’s power system,” said Rich Nolan, National Mining Association President and CEO. “Look no further than the current fuel challenges confronting countries that turned away from coal as they rush to restart plants and scramble to source thermal coal to replace strained LNG supplies. Preserving the security that coal provides our grid is not only the right move given today’s global realities, it’s a key part of a truly comprehensive national security strategy,” he added.
Invoking the DPA and using it to support coal supply chains and generation makes sense for many reasons:
Global Crisis: This is the largest oil disruption in history and an equally massive disruption to global LNG supply–20% of the world’s oil and LNG is shipped through the Strait of Hormuz. As we’re seeing across Asia and Europe, nations that can pivot to coal to shore up energy security and reduce spiking costs on consumers are doing so.
Markets Need U.S. Energy: The U.S. is a critically important oil, LNG and coal exporter. More U.S. energy in global markets is essential to meeting demand, buffering price spikes and providing security for our trade partners and allies. With U.S. coal going to more than 70 nations, and none of it moving through the Strait of Hormuz, the U.S. supply is an irreplaceable swing supplier during price shocks, enabling more coal to get to the global market is an important response to urgent need.
Coal is a Price Shock Absorber: As the world pivots to coal to reduce electricity costs and shore up energy security, coal supply and generation is also the key electricity price shock absorber here at home. Fortunately, U.S. natural gas prices have not spiked from this global crisis, but U.S. LNG export capacity is growing rapidly – jumping another 30% by 2027 – as domestic natural gas demand also surges. Even a small rise in U.S. natural gas prices can translate into huge costs for American consumers. The optionality provided by the coal fleet serves as an irreplaceable buffer, allowing utilities to move to a lower cost alternative when natural gas prices rise. In 2025, higher natural gas prices led to a 12% increase in U.S. coal generation which saved U.S. consumers an estimated $30-40 billion in otherwise higher natural gas and electricity costs. Investing in domestic coal supply and coal plants is an investment in the nation’s resilience to market volatility.
Surging Domestic Power Demand: The global energy crisis is driving emergency action, but the U.S. is already facing an electricity supply emergency with grid reliability deteriorating and power demand growing far faster than the supply of reliable, dispatchable power. The PJM electricity market alone is forecasting a shortage of 60 gigawatts of capacity in the next decade, equivalent to the power needs of 45 million homes. Markets across the country are facing similar shortfalls. Jim Robb, president and CEO of the North American Electricity Reliability Corp., recently called the state of the nation’s supply of power a “five alarm fire.” Using the DPA to further address this crisis isn’t just warranted, it’s essential.
Simply put, invoking the DPA to bolster U.S. coal supply chains and electricity generation is a vital and necessary response to an unprecedented global energy crisis—a crisis that has underscored the importance of coal to both global and domestic energy security and affordability.
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