Energy companies in U.S. Chamber silent as Chamber opposed use of Defense Production Act to produce medical supplies for COVID-19

Major electric utilities and fossil fuel producers that are members of the U.S. Chamber of Commerce remained silent when asked whether they supported the lobbying group’s controversial opposition to using the Defense Production Act to address a shortage of medical supplies and equipment crucial to fighting the coronavirus. 

Some of those same energy companies, and their trade associations, have for years lobbied for the use of the Defense Production Act to bail out struggling coal plants.

The law allows the president to direct companies to produce needed goods; President Trump invoked it for the first time earlier today when he directed General Motors to produce ventilators. But the administration’s use of the law resistance, despite pleas from state leaders for desperately needed medical supplies in short supply.

The New York Times first reported news of the U.S. Chamber’s lobbying the Trump administration against using the Defense Production Act. The report prompted Senator Elizabeth Warren and five other members of the U.S. Senate to send a letter to the U.S. Chamber demanding answers: 

“We are writing regarding a highly disturbing report that, amidst the coronavirus disease

2019 (COVID-19) pandemic that threatens to become a national public health and economic catastrophe, the “U.S. Chamber of Commerce and the heads of major corporations have lobbied the [Trump] administration against using” the Defense Production Act to address the huge shortfall of ventilators, respirators, and personal protective equipment (PPE) needed to treat COVID-19 patients and protect health care providers from contracting the virus. If these reports are true, you owe the American public an explanation for your actions.“

The Energy and Policy Institute asked a dozen electric utility, coal, and oil and gas companies for comment on reports of the U.S. Chamber’s lobbying.. 

EPI did not receive any response from most of the energy companies represented on the U.S. Chamber’s board, including Florida Power & Light, Entergy Louisiana, Southern Company, Sempra, Peabody Energy, ConocoPhillips, Devon Energy, and Alliance Resource Partners. Phillips 66, whose VP of Legal and Government Affairs Paul Johnson serves on the Chamber’s board of directors, referred EPI to the Chamber for comment.

EPI also asked other U.S. Chamber members including AEP, Duke Energy and FirstEnergy Corp. for comment. Duke Energy responded, but declined to comment.

Electric utilities’ ratepayers generally pay for the companies’ dues to the U.S. Chamber of Commerce, as EPI has reported.

Chamber lobbied against DPA despite pleas from local leaders

“The proponents of invoking the Defense Protection Act have not identified what problem exists that this law can solve,” Neil Bradley, chief policy officer for the U.S. Chamber, said in a March 23 statement posted on the group’s coronavirus live blog. 

“President Trump said he is prepared to invoke the Defense Production Act to expand the supply of ventilators and masks if needed,” the Chamber noted in a post several days earlier on March 18. 

The Chamber’s lobbying came as governors like New York’s Andrew Cuomo pleaded for the president to invoke the Act.

“I look at actions, not words,” Cuomo said on Mar. 24, according to Yahoo News. “They’re doing the supplies? Here’s my question. Where are they? Where are the ventilators? Where are the gowns? Where’s the PPEs [personal protective equipment]? Where are the masks? Where are they? Where are they if they’re doing it?””

Reacting to Trump’s use of the Act today, Gov. J.B. Pritzker of Illinois told Politico: “That’s terrific, but we need more.” “We need thousands more ventilators, as many as we can in short order. As you hear time and time again, you’re competing against everybody all the time.”

A Mar. 21 letter from the American Hospital Association, American Medical Association, and American Nurses Association had asked for the move:

“America’s hospitals, health systems, physicians and nurses urge you to immediately use the DPA to increase the domestic production of medical supplies and equipment that hospitals, health systems, physicians, nurses and all front line providers so desperately need. As COVID-­‐19 continues to spread throughout the country, these supplies are urgently needed to care for our patients and communities.”

Some Chamber members have sought Defense Production Act bailouts for their own industries

Glenn Kellow, the CEO of coal producer Peabody Energy, serves on the board of directors of the National Mining Association, which this month asked the Trump administration and Congressional leaders to use the Defense Production Act to bail out the coal industry. 

“The fuel security provided by coal reserves at power plants offers resiliency to a system that is bracing for uncertainty, and it is imperative to keep these plants online—whether through the use of the Defense Production Act or other means—in the interest of national security,” a letter from the National Mining Association obtained by E&E News said.

The bankruptcy-plagued coal industry asked the Trump administration for bailouts in 2017 and 2018, long before the current coronavirus crisis emerged. 

In 2018, Trump’s National Security Council considered a draft plan for the Department of Energy to use the emergency powers of the Defense Production Act and Federal Power Act to bail out uncompetitive coal and nuclear power plants. 

When the plan leaked, the American Coalition for Clean Coal Electricity (now called America’s Power) released a blog post supporting the move, and said the plan “provides compelling justification for DOE to take action to protect national security.” The National Mining Association also supported the plan, which the Trump administration later abandoned. 

FirstEnergy Solutions (FES), then a bankrupt subsidiary of FirstEnergy Corp., also petitioned the Department of Energy for a Federal Power Act bailout for coal and nuclear plants in March 2018. Lawyers and lobbyists for FES at Akin Gump reported doing work related to the Defense Production Act that year on invoices filed in the utility’s bankruptcy case. 

Kellow and Joseph Craft, the CEO of Alliance Resource Partners, called for a government bailout of the struggling coal industry as far back as 2017. Their calls were echoed in a letter that Robert Murray, the CEO of Murray Energy, sent to then Secretary of Energy Rick Perry that summer, also asking for a bailout.

Coal-fired power plants are a source of harmful air pollution. Experts warn that people who live in areas with air pollution are more at risk from coronavirus.  

Image of U.S. Chamber building courtesy Tim Wang, via Flickr. Creative Commons.

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