Enviro strategy: ‘Keep coal in the hole’

The Keystone XL pipeline fight foreshadows the future fight over coal.

The Washington Post reports today that the enviros are not only trying to stop coal burning, but coal extraction as well — “keep coal in the hole” is what the WildEarth Guardians call the strategy.

The Keystone XL pipeline controversy, of course, is the enviros’ test case for stopping fossil fuel production. If Keystone XL is blocked, they will move with full force to block coal mining and coal exporting. Most in the coal industry have their head in the sand about this.

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Coal extraction poses climate challenge for Obama administration

By Juliet Eilperin
December 25, 2011, Washington Post

When it comes to coal mining in the United States, environmentalists have a simple goal: End it. For the Obama administration, it’s a little more complicated.

Since taking office nearly three years ago, the administration has restricted coal-mining waste from being dumped into streams and imposed new pollution controls on coal-fired power plants. But on the fundamental question of whether the government should halt federal leasing, the administration’s answer has been: not yet.

Instead, the federal government is analzying the environmental impact of extracting coal from public land, drawing fire from both sides. Environmentalists say such action doesn’t go far enough, while industry officials question why it would pursue this analysis in the absence of a federal law on greenhouse gas emissions.

“On some level, the twin goals of increased fossil fuel production and reducing U.S. greenhouse gas emissions are necessarily in conflict, at least without a national cap on emissions,” said Paul Bledsoe, who was a special assistant at the Interior Department during the Clinton administration. “This fundamental contradiction in current U.S. energy policy is playing out on the Keystone oil pipeline, in our public lands policy and throughout the energy economy.”

Interior Deputy Secretary David J. Hayes said the agency is “committed to evaluating greenhouse gas emissions among the many important factors we analyze when considering whether or not a coal extraction lease sale makes sense for the environment, the economy and America’s energy security.”

Even as Interior has given added scrutiny to leasing and pushed for the development of renewable energy alternatives, Hayes added, it hasn’t sought to shut down coal production altogether.

“Coal is providing close to half the electricity in the United States, and 40 percent of the coal used in that mix comes from the public land — our land,” he said. “It’s an important part of our energy mix. The revenues that come from it are significant.”

Production declines

Overall U.S. coal production has dipped slightly since 2008, and federal coal leases have fallen more sharply. Coal production totaled 1.17 billion short tons in 2008, according to the Energy Information Agency. It declined to 1.074 billion tons in 2009 and last year reached 1.084 billion. It is expected to be roughly 1.08 billion tons in 2011.

While the economic downturn largely accounts for the decline, according to mining operators and analysts, federal policy has contributed to the fact that the number of tons the government leased each year over the past three years has averaged 272 million. The Bush administration, by contrast, leased an average of 515 million tons annually between 2002 and 2008. But federal royalties are rising, reaching $701 million in fiscal 2011.

The center of gravity for coal production in the United States has shifted over the past few decades for both economic and environmental reasons, moving from central Appalachia to the Powder River Basin in Wyoming and Montana. Central Appalachia now produces just 17 percent of the nation’s coal compared with 70 percent in the 1970s, according to Tom Sanzillo, president of the consulting group T.R. Rose Associates.

The Powder River Basin accounts for 43 percent, more than all of the coal produced east of the Mississippi River.

Part of this shift stems from two centuries of traditional coal mining in the East depleting reserves in central Appalachia.

And the mountaintop-removal practice used in the region has been curtailed on the grounds that resulting “valley fills” undermine local water quality. Final guidance on the practice issued by the EPA in July has come under legal challenge, but in the meantime, operators say, the new policy has stalled surface mining permits in states such as Kentucky and West Virginia.

Bill Bissett, executive director of the Kentucky Coal Association, said operators are concerned about what they’ll do when they’re finished mining on their current permits. In September, the EPA denied 19 surface mining permits in eastern Kentucky; Bissett estimated that translates into nearly 125.5 million short tons of lost coal production and 950 mining jobs over the life of the mines.

Powder River Basin

Increasingly, both the mining industry and environmentalists have focused on the Powder River Basin, where coal extraction has more than doubled over the past two decades. In 1990, the federal government made the decision to “decertify” the area as a coal production region, a move that allows coal companies to identify which tracts of land they’d like to lease rather than having the Bureau of Land Management select them.

According to Sanzillo, the facts that firms can access relatively inexpensive coal in the region and now enjoy the prospect of an expanded export market in China and other developing nations “place a major upward price premium on Powder River Basin coal for the coming decades.”

Companies such as Peabody, which declined to comment for this article, can earn three-to-five times more on sales of Powder River Basic coal overseas than in standard domestic sales. The firms are pushing for new terminals in Washington and Oregon from which they could ship tens of millions of tons of coal per year.

The Bureau of Land Management did not hold lease sales in Wyoming in 2009 or 2010 but has held four this year. Marion Loomis, executive director of the Wyoming Mining Association, said the industry is “very pleased the Department of Interior has started [leasing] again, and we hope that continues.”

But environmental advocacy groups are doing their best to stop it. Bruce Nilles, who directs the Sierra Club’s Midwest Clean Energy Campaign, noted that NASA scientist James E. Hansen has predicted coal combustion must cease by 2035 to avoid dangerous global warming.

“Everybody knows Appalachian coal is going away,” Nilles said. “But the big play is the Powder River Basin.”

Sierra Club and WildEarth Guardians have seven cases challenging federal coal leases there on several grounds, including their potential contribution to climate change. Using BLM estimates, WildEarth Guardians calculates the Powder River Basin coal that either has been approved for leasing or is pending approval will emit an estimated 11.37 billion metric tons of carbon dioxide, almost twice the amount of greenhouse gases released in the entire United States in 2009.

Evolving approach

WildEarth Guardians’ general counsel, Jay Tutchon, describes his group’s strategy as “keep the coal in the hole,” as opposed to BLM, which he said “views its mission as ‘get this coal out of the ground and sell it.’ ”

The Interior Department has prepared documents, obtained by The Washington Post, which BLM land-use planners use to provide field offices with direction on how to conduct a greenhouse gas analysis of coal leases. They include phrases such as “increasing concentrations of [greenhouse gases] are likely to accelerate the rate of climate change,” and “several activities contribute to the phenomena of climate change, including emissions of GHGs (especially carbon dioxide and methane) from fossil fuel development.”

When BLM applies this analysis to leasing, however, it often emphasizes that prohibiting mining in the Powder River Basin won’t cut greenhouse gas emissions. In its Record of Decision for the North Porcupine Coal Lease, it states, “BLM disagrees with the comment that denying the proposed Federal coal leasing application would consequentially reduce the overall rate of national coal consumption by electric generators. . . . Issuing a Federal coal lease for the North Porcupine tract would not result in the creation of new sources of human-caused GHG or mercury emissions.”

Hayes, the deputy Interior secretary, said when it comes to BLM officials, “there has been an evolution in their approach under this administration, from the time we walked in the door.

“Let’s be forthright on identifying the full greenhouse gas effects, including those downstream,” he said, adding when it comes to extracting coal in the United States, “we know it’s likely to be used as a fuel, it’s going to be combusted, and there will be greenhouse gas implications to that.”