President Trump moved to channel nearly $700 million in federal resources to bolster the U.S. coal industry on Thursday, invoking the Cold War-era Defense Production Act as part of a package the White House said aims to modernize coal infrastructure and expand output. The announcement was accompanied by a rally in coal equities, with Peabody Energy Corp (NYSE:BTU) trading roughly 4% higher during the session.
The administration laid out the components of the package: $425 million is earmarked to upgrade 13 existing coal-fired power plants across 10 states, while $75 million will go toward constructing a new export terminal in Oakland, California. Separately, the Department of Energy will provide $200 million in grants to fund two new coal plants in Alaska and West Virginia and to restart a coal plant in western Maryland. The White House noted these new facilities would be the first U.S. coal plants built since 2013.
The initiative was announced at a White House event titled "Beautiful, Clean Coal," where the president was joined by Interior Secretary Doug Burgum, Energy Secretary Chris Wright and EPA Administrator Lee Zeldin. The White House said the plan will create thousands of jobs for miners, railroad workers, engineers and construction workers and save consumers $50 billion in energy generation costs.
Market responses were concentrated in coal and related utilities. In addition to Peabody's move higher, the Range Global Coal Index ETF was reported up about 2.43% on the day. Utility companies with coal exposure posted more modest gains; Duke Energy Corporation (NYSE:DUK), Hallador Energy Company (NASDAQ:HNRG) and American Electric Power Company Inc (NASDAQ:AEP) each registered increases of less than 1% during the session.
The coal announcement came amid a broadly positive day for equities. Wall Street advanced Thursday as progress toward ending the Iran war lifted investor sentiment and the Dow reached a record high, though gains were tempered on the Nasdaq by a selloff in chip stocks after disappointing results from Broadcom, according to Reuters.
Longer-term trends cited by the administration underscore the scale of the coal sector's decline: coal's share of U.S. electricity generation has fallen from over 45% in 2010 to roughly 15% in 2024 as utilities shifted toward cheaper natural gas and renewable energy sources. The administration framed the renewed focus on coal as a national security and energy-security imperative, pointing to surging electricity demand from AI data centers as part of the rationale.
This move follows an earlier executive order in February that directed military bases to sign electricity contracts with coal plants, signaling a continued push by the administration to reinsert coal into federal procurement and energy planning.
Industry reaction included public praise from the National Mining Association. CEO Rich Nolan said the administration "is supporting that strategy with decisive action at home to ensure that upgrades to existing energy assets are made, and at our ports to ensure that U.S. coal can answer the world's needs."
Environmental organizations responded with sharp criticism. The Sierra Club called the spending "disgusting and reprehensible," arguing it would "make Americans sicker and drive up electricity prices." Kit Kennedy of the Natural Resources Defense Council characterized the plan as "propping up coal billionaires with taxpayer money."
Context and implications
The package combines direct federal investment in existing facilities with grants for new construction and port infrastructure. While officials emphasize job creation and consumer savings, environmental groups contend the spending runs counter to public health and clean-energy goals. Market participants moved quickly to price the policy shift into coal-related equities and ETFs, while utilities with coal exposure saw smaller, more measured responses.
The administration's appeal to energy-security rationales and recent military contracting guidance suggest coal is being positioned as part of a broader federal strategy, though the long-term market and policy effects remain subject to debate among stakeholders.