President Biden is looking to woo energy communities long dependent on the fossil fuel industry — particularly those with coal workers who are out of jobs — with economic incentives to go green from Democrats’ tax and climate spending law.
At a White House event Tuesday, administration officials will detail new tax credits they say will bolster Mr. Biden’s climate change agenda while slashing U.S. dependence on China and providing an economic boon to towns with shuttered coal plants and mines.
“There are so many translatable skills that these communities are more of a natural place for investment to go, especially as these communities are transitioning,” Energy Secretary Jennifer Granholm told reporters in a preview of the announcement.
The focus on coal country comes amid the president’s plan to pivot the U.S. away from fossil fuels to cleaner energy sources. Mr. Biden suggested last November that the U.S. will soon be “shutting these plants down all across America” to replace them with wind and solar.
That rhetoric prompted scorn from critics including a prominent Democrat with close ties to the industry: Sen. Joe Manchin III of West Virginia.
“Comments like these are the reason the American people are losing trust in President Biden and instead believes he does not understand the need to have an all-in energy policy that would keep our nation totally energy independent and secure,” Mr. Manchin said at the time.
The coal industry has shed the most jobs in recent years among the fuel technology sector, losing more than 7,000 in 2021 for a nearly 12% year-over-year decline, according to the Energy Department.
And yet, the U.S. still relies heavily on coal. It was the second largest source of power in the U.S. last year behind natural gas, providing nearly 20% of total electricity generation, according to the U.S. Energy Information Administration.
Mr. Biden plans to steer to coal communities money from the Democrats’ climate law — dubbed the Inflation Reduction Act or IRA — which included $370 billion in clean energy spending over the next decade. The Treasury Department and IRS will unveil new rules outlining how new clean energy projects like wind and solar can receive up to 40% in tax credits if built in eligible coal communities.
“Coal communities have the knowledge, infrastructure, resources and know-how to play a leading role in the move to a clean energy economy,” said Wally Adeyemo, deputy secretary of Treasury.
The Department of Energy will also make available through the IRA $450 million for clean energy projects on 18,000 current and former coal mine land sites encompassing 1.5 million acres across the country. The administration estimates that up to 90 gigawatts of power — enough for nearly 30 million homes — could be produced by converting the areas into clean energy projects.
The administration will also disperse $16 million from the 2021 Bipartisan Infrastructure Law to the University of North Dakota and West Virginia University for studies on how to extract critical minerals from coal mine waste that electric vehicles rely on. The critical mineral supply chain is currently dominated by China, accounting for 60% of the globe’s total rare Earth elements production, per the International Energy Agency.
Mr. Adeyemo said the administration does not believe the billions it is injecting into the energy sector will contribute to soaring inflation because the money is directed at long-term projects that look to bring down energy costs — a leading inflation contributor — by increasing supply.
“This both creates energy security for us and also helps us deal with the climate challenge, but it also helps provide a supply of renewable energy that will get us out of our dependence on fossil fuels,” he said.
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