How Coal Giant Peabody's Ideas Ended Up in Trump's Coal Study

Updated on
  • Coal giant gave advice to political appointee on grid report
  • Energy Department proposed changes to bailout coal plants

A front loader moves coal at the Peabody Energy Somerville Central surface mine in Oakland City, Indiana.

Photographer: Luke Sharrett/Bloomberg

Days after Energy Secretary Rick Perry requested a study on how to help coal-fired power plants, a lobbyist for the largest U.S. coal producer contacted the department to offer his advice. Many of those ideas became part of the department’s efforts to help the fuel source.

Emails obtained by the Sierra Club show that Travis Fisher, a senior adviser at the department who coordinated the report, sought and received input from Raymond Shepherd, a top Peabody Energy Corp. lobbyist in Washington.

"It occurred to me that the DOE study would be a good way to highlight the inequities in the market and the uneven playing field on which coal plays," Shepherd wrote in an April 19 email to Fisher, adding he was including "some broad questions that could be addressed by the study."

Shepherd, a vice president for government affairs, said the department should highlight a key reason why coal is important: "On-site fuel storage increases reliability," he said in an email. "Power generation can be interrupted by outages, weather events and competing market pressures."

The resulting study, released by the Energy Department in August, touted the value of power from coal-fired power plants, emphasizing just that point: on-site storage of fuel offers an important way to safeguard the electric grid’s resiliency. A month later the department proposed a rule to bail out coal plants, touting just those fuel-storage attributes. 

That regulation, if adopted, would be a boon for coal companies like Peabody. Neither natural gas nor renewable energy, coal’s chief competitors in electricity markets, have the fuel-storage attributes of coal, supporters say.

Shepherd’s emphasis that the electricity marketplace wasn’t working correctly was also highlighted repeatedly by Perry and other supporters of the new regulation.

Read More: U.S. to Say Power Markets Must ‘Evolve’ to Value Coal, Nuclear

"We engage and advocate with a broad range of stakeholders based on our views and experiences from the markets in which we conduct business," Peabody said in a statement.

"We support policy that recognizes the importance of baseload power from coal for a reliable, resilient, cost-effective electric grid," the company said. "The administration recognizes that reducing coal from the baseload mix and forcing too much reliance on renewables creates reliability issues and drives up costs."

The emails were obtained through an open-records request. An Energy Department spokeswoman didn’t respond to a request for comment.

Not all of Peabody’s ideas were adopted. Shepherd recommended that the administration move to "suspend or limit" the wind production tax credit and provide tax incentives to existing coal plants for the construction of environmental controls.

The emails also show that Peabody sought help from the Energy Department and other federal agencies to extend the life of the massive coal-fired Navajo Generation Station in Arizona. A Peabody mine supplies that plant.

"We would love to get your insight on how DOE could work with the EPA and Interior to assist in keeping the plant open," Shepherd wrote in an April 12 email.

The emails show that the Energy Department’s study was not an objective look at the reliability of the grid as the department has maintained, said Casey Roberts, a senior attorney for the environmental group, the Sierra Club.

The Sierra Club has joined with groups as diverse at the American Petroleum Institute and American Chemistry Council to oppose Perry’s proposed regulation.

"These documents show the influence certain private interests had and the extraordinary access they had while the Department of Energy was conducting this study," Roberts said in an interview. "The communications between Peabody and Department of Energy staff show a shared understanding that the objective of the DOE study was to preserve coal generation."

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