The announcement by United States President Donald Trump of a $700 million investment package for the coal sector, using wartime powers, is considered a development that could have significant consequences not only in terms of energy policies, but also in terms of the economy, national security, and climate policies.[i] The rise in energy prices, particularly following the war with Iran, is leading the Washington administration to explore options that can increase energy supply in the short term. In this context, the Trump administration is trying to revive the American coal industry, which has long been in decline.
The first notable element in Trump’s statement is the use of the Defense Production Act to finance the investment. This legislation, created during the Cold War, authorizes presidents to provide direct support to sectors deemed critical to national security. The extension of this authority, previously used by various presidents for areas such as medical equipment, semiconductors, and strategic minerals, to the coal sector can be seen as a sign that the Trump administration views energy security as an integral part of national security.
Trump’s plan includes a $500 million allocation to keep existing coal-fired power plants operational and to fund the construction of a new coal export terminal in California. An additional $200 million from the Department of Energy will be used to build new coal-fired power plants in Alaska and West Virginia. This means that new coal-fired power plants will be commissioned in the US for the first time since 2013. Thus, the coal sector, which has lagged behind natural gas and renewable energy sources in the last decade, is being re-empowered to a strategic position.[ii]
One of the main reasons behind this decision is the increase in energy prices. The war with Iran and the subsequent closure of the Strait of Hormuz are causing significant fluctuations in global energy markets. Disruptions along this route, through which a significant portion of the world’s oil and natural gas trade passes, are driving up energy costs. The nearly 40% increase in the price of gasoline per gallon in the US in a short period of time is raising public concerns about energy costs. Similarly, the 17.9% year-on-year rise in overall energy prices paid by consumers is also increasing political pressure.[iii]
The Trump administration argues that coal is a domestic resource that can ensure energy supply security.[iv] While oil and natural gas markets are affected by international crises, the fact that coal reserves are largely located within national borders strengthens the discourse of energy independence. The prominence of domestic resources, especially during times of war or international crisis, is a frequently emphasized element in energy security literature.
However, the economic dimension of the investment is also important. Trump states that the announced package will create approximately 14,000 jobs.[v] In states heavily reliant on coal production, such as West Virginia, Kentucky, and North Dakota, these types of investments carry significant political weight. In regions experiencing economic contraction due to the closure of many coal mines in recent years, new investments are expected to create jobs. This could help strengthen Trump’s support in industrial and mining areas, which form his traditional voter base.
However, the long-term economic sustainability of this initiative appears debatable. In recent years, natural gas and renewable energy sources have become more competitive in electricity generation in the US. Cost reductions, particularly in solar and wind energy technologies, are driving many energy companies away from coal. Therefore, it is known that many coal-fired power plants struggle to remain economically applicable without state support. Consequently, the announced package is more of a sector protection policy based on public intervention than on free market conditions.
From an environmental perspective, the investment is expected to spark even greater controversy. Coal is considered one of the most carbon-intensive fossil fuels. Given the US targets under the Paris Agreement and global carbon reduction efforts, the construction of new coal-fired power plants is criticized by international environmental groups. European countries and environmental organizations, in particular, argue that increasing the use of fossil fuels under the pretext of energy security will harm the fight against climate change in the long run.
It is remarkable that Trump’s statements target renewable energy sources. The President claims that successful countries rely on coal, while characterizing countries investing in wind energy as failures. However, today, China, Germany, and many European countries are both increasing their investments in renewable energy and trying to protect their energy supply security. Therefore, there are strong academic opinions that energy security and renewable energy investments are not mutually exclusive elements.
From a geopolitical perspective, Trump’s coal move demonstrates the increasing intertwining of energy and security policies. The energy shock following the Iran-Iraq conflict has heightened Washington’s sensitivity to strategic reserves and domestic energy resources. In this context, coal investments are seen not only as an economic tool but also as a strategic one. The US administration argues that its energy supply should not be dependent on external developments and is therefore turning to domestic resources.
In conclusion, Trump’s $700 million coal investment package aims to stabilize energy prices, create jobs, and strengthen energy security in the short term. However, this policy also raises significant debates regarding environmental sustainability, market efficiency, and the long-term energy transition. Faced with rising energy costs following the Iran-Iraq conflict, the Washington administration is turning to solutions that can yield quick results. However, whether this investment in the coal sector will create a lasting change in the US energy strategy at a time when the global energy transition is accelerating is a matter that will become clearer in the coming years.
[i] Mitchell, Archie. “Trump Announces $700m Coal Investment Using Wartime Powers”, BBC News, https://www.bbc.com/news/articles/cy0209r62k5o, (Date Accessed: 07.06.2026).
[ii] Ibid.
[iii] Ibid.
[iv] Ibid.
[v] Ibid.
