President Trump invoked the Defense Production Act to commit $700 million to coal plants and an export terminal, the latest move in an energy push that has sent federal lease revenue to record highs.
Trump committed the $700 million to coal plants and a new export terminal on June 4, invoking the Defense Production Act, a 1950 law that grants presidents broad authority to direct resources toward industries deemed critical to national security. "Today, we're taking historic action to bring down the price of energy and the cost of living for all Americans with the power of clean, beautiful coal," Trump said at the announcement.
The funding breaks down across three tracks. Defense Production Act reserves will send $425 million to 13 existing coal plants across 10 states including West Virginia, Kentucky, Indiana, and Tennessee. Department of Energy grants totaling $200 million will build two new plants in Alaska and West Virginia and restart a facility in Maryland. A separate $75 million goes to a new coal export terminal in Oakland, California. The White House says the package supports or creates more than 14,000 jobs in coal, construction, rail, and maritime industries.
Lease Revenue and Production Records
The coal push is running alongside the Interior Department's implementation of the energy provisions baked into the One Big Beautiful Bill Act, the reconciliation legislation President Trump signed into law. The law reduced the federal royalty rate for new onshore oil and gas production to a minimum 12.5 percent, reversing the 16.67 percent rate the Biden administration set through the Inflation Reduction Act. Interior projects that royalty rate cut alone will generate an estimated 225 additional oil and gas leases in 2026 and spur an average of 160 more wells per year on those leases in subsequent years. Onshore lease sales are now required quarterly under the law, closing the discretionary gaps that slowed leasing under previous administrations.
The numbers are reflecting the push. Federal oil and gas lease sales generated $592.7 million in the first quarter of 2026, the highest early-year revenue on record, according to Bureau of Land Management data. The total included the first lease sale in the National Petroleum Reserve in Alaska since 2019, covering 187 tracts and contributing $177.6 million. The Interior Department's Office of Natural Resources Revenue reported $14.61 billion in total energy revenue from federal lands and offshore areas in fiscal year 2025.
U.S. crude oil production hit a new annual record of 13.6 million barrels per day in 2025, a 3 percent increase over the prior year, according to the U.S. Energy Information Administration. The Permian Basin in western Texas and southeastern New Mexico produced 6.6 million barrels per day, accounting for nearly half of all U.S. crude output. The BLM has scheduled 26 competitive oil and gas lease sales for fiscal year 2026. Under the One Big Beautiful Bill Act, the Gulf of America must hold at least two offshore sales per year through 2039, with a third sale for this year mandated by August 15.
Critics Push Back
Critics say the administration is steering public money toward a declining industry at the expense of consumers and public health. Kit Kennedy of the Natural Resources Defense Council called the coal funding a "taxpayer bailout to build new phone booths," arguing it would raise electricity bills and worsen pollution. Lena Moffitt of Evergreen Action described the investment as "throwing a lifeline to a ship that has already sunk." Environmental groups have filed legal challenges to parts of the offshore leasing program, and E&E News has reported that the offshore agenda faces additional court tests ahead.
The administration has pointed to the One Big Beautiful Bill Act's statutory language as the legal foundation for the mandatory leasing calendar and has not offered a detailed public response to the pending litigation. The next clear marker for the energy agenda arrives August 15, when the third Gulf of America offshore sale is due. How those sales perform in the marketplace, and whether energy prices hold their downward trend through fall, will shape how much the administration can lean on its energy record heading into the 2026 midterms.
