Rich in the Wrong Stuff
The doubtful blessings of Wyoming’s coal
Wednesday, June 18, 2014
The misfortune of living atop the nation’s greatest coal deposit was slightly evident the other day, as Bellingham was visited by a delegation from a state that is lawyering up to sue us. Four Wyoming officials came to tour Cherry Point as guests of the Gateway Pacific Terminal, proposed as the largest coal port in North America.
They were eager to expound on the world’s exponential need for energy. They were less interested in talking about Wyoming’s threatened lawsuit against Washington for over-studying the impact of coal export. The Wyoming state legislature has set up an expandable war chest of half a million dollars to protect against those its proponents call “sister states who might violate the interstate commerce clause of the U.S. Constitution.”
The delegates included Wyoming State Senators Jim Anderson (2nd District Republican), Wyoming State Senator Chris Rothfuss (9th District Democrat), Western Research Institute CEO and Wyoming Infrastructure Authority Board Member Don Collins, and Loyd Drain, executive director of the Wyoming Infrastructure Authority. Representatives from the Northwest Jobs Alliance and Gateway Pacific Terminal also fielded questions from reporters. Each question triggered a discussion on the present and latent virtues of coal. The unspoken subtext: Coal can save civilization, but only if they can sell it to Asia by way of Cherry Point.
Many questions focused on the parallel legal threat, which delegates mostly brushed aside: They were there to talk about the economy and marketing of coal.
Wyoming’s legal threats are nothing more than chest beating and political maneuvering, says Jan Hasselman, an attorney for Earthjustice, a public interest law firm dedicated to environmental causes.
“They’ll never file the suit,” Hasselman predicted this week.
“If they tried, they’d not find a judge who would accept it. The people of Washington and Whatcom County get to have their say on a huge industrial project on their coastline. The state and county can take decisions to protect the health and safety of their citizens.”
The Department of Ecology declined to comment.
“We are not aware of any lawsuit at this time,” the department’s Northwest Regional Director, Josh Baldi, said Monday. “We have no comment on the considered decisions of our sister states on their use and appropriation of public funds.”
Much as the coal merchants need to be shipping coal to Asia now, port development permits are a long way from approval. The kind of climate impact study Ecology intends could take years.
So could lawsuits between states, with both sides invoking the doctrine of states’ rights to regulate and promote internal business without interference from each other.
The coal business may be in something of a sooty cloud right now, but Lloyd Drain says coal technology will change everything, almost overnight. Drain directs the Wyoming Infrastructure Authority, a state-funded entity that he pointedly says is not a state agency, but an “instrumentality” of a state with a population smaller than that of Snohomish.
There seems not to be a comparable agency (or instrumentality) in Washington. Drain’s organization is responsible for expanding and marketing Wyoming’s abundantly surplus energy resources. Until now, that has meant developing the electrical grid, nurturing a huge wind power project in the state’s very windy southeast, and selling the power to California.
With a newly approved state budget, the Wyoming legislature has expanded the Authority’s authority to include the marketing of Wyoming coal. Drain is charged with doing what has to be done to get the coal to China, India, Japan, South Korea—all of whom he finds to be clamoring for it, never mind China’s forceful cutback in coal-fired power plants.
A day or so earlier, Bloomberg Business News reported on a new study that reveals the dimensions of the air pollution crisis in China, and its effect on coal markets.
The report says China, the world’s biggest coal consumer, has moved forward its goal of reducing coal to less than 65 percent of its energy usage—moved it from 2017 to this year. Further limits are said to be under discussion among China’s government advisors, one of who called the country’s air pollution “unbearable.”
According to Bloomberg, coal now sells in China’s main trading hub for one third less than the price of two years ago.
On Wall Street, shares of Arch Coal, a huge player in the Wyoming coalfields, lost 26 percent during the past year.
Peabody Coal, whose 24-million-ton contract with Gateway Pacific amounts to half the terminal’s proposed shipping capacity, lost 12 percent in a year that saw the Standard and Poor’s 500 index climb 19 percent.
A number of coal companies have stayed out of what used to be bidding contests for coal mining leases on public land in Wyoming. As a result, some win with bids as low as 21 cents a ton. A scheduled auction last August was cancelled when no bidder showed up. The expected bidder, Cloud Peak Energy, said the estimated 148 million tons of coal wasn’t worth the cost of mining it.
Some of the above might help to explain a sense of urgency on the part of mining companies, would-be terminal builders and the governments of coal states. It might explain the threatened lawsuits by Wyoming, Montana and North Dakota, as Washington’s Department of Ecology follows through on its unprecedented climate impact study of nascent coal ports at Cherry Point and Longview.
Big coal needs things to happen in a hurry, for a number of reasons: growing competition from cheaper and cleaner natural gas; China finally paying attention to its air pollution crisis; western rail capacity being taken up by crude oil traffic; President Obama ordering new, stringent pollution restrictions on coal-fired U.S. power plants.
Washington defends its right to study whatever it needs to study before permitting a coal port on its seacoast; and both invoke the doctrine of states’ rights to regulate and promote internal business without interference from each other.
“We just don’t want coal singled out and treated unfairly,” Drain said. “If the state wants to study the impact of coal from the mines to the generating plants, then they ought to do the same thing with other products that are transported through the state.”
“How about all the jet aircraft that are manufactured out there? They’re the source of serious air pollution. The parts are shipped around the world. Shouldn’t they be studied in the same way?” he asked.
Despite everything, Drain says the future looks bright for coal. His optimism embraces scientific breakthroughs that have not yet broken through. China is not turning away from coal, he insists; it’s turning away from “coal as we know it.” A transformed coal, as we don’t know it will soon be available. Everything will change.
“Within this decade—in the next four to six years—we’ll see advances in clean coal technology that you won’t believe,” he said.
Drain spoke glowingly of a new process for capturing carbon dioxide from coal, then converting the CO2 to bio-crude, a non-polluting fuel so efficient that everyone will want it. He says Wyoming has already budgeted $40 million to help advance the research.
In the meantime, he contends, there remains a huge demand for plain old coal, untransformed, of which Wyoming is said to be sitting on 1.4 trillion tons. China may be increasing its coal needs at a decreasing rate, but it’s still an increase. Aside from China, Drain says, a huge demand waits to be met in Japan, North Korea, and India, where coal-fired generating plants have yet to muddy the sky to the extent that the Chinese have endured.
Shortly before Drain and his delegation came to Bellingham, Wyoming Governor Matt Mead made a similar expedition to Longview, where Ambre Energy and Arch Coal propose to build a coal export terminal. He encountered protestors who described his visit as “an attempt to bully us into accepting his dirty coal trains that will clog our intersections and harm our health,” in the words of Diane Dick, of Cowlitz County Landowners and Citizens for a safe community.
Mead is that unusual north-of-Dixie elected official who publicly denies that human activity affects the global climate, but he might be modifying those views.
“I’m not a scientist, I could be wrong on this,” Mead said in a Wyoming speech last month. “Whether or not one believes in climate change, Wyoming needs to respond” to industry’s move away from coal. He called for more Federal research into cleaner coal and recycled carbon dioxide. The Casper Star-Tribune suggested that sinking coal prices might move the governor to recast his position on climate change.
Wyoming still calls itself the Cowboy State, and the iconic buckaroo still rides every license plate. But it’s coal, not cattle, on which the state’s political leaders base their hopes for wealth and prestige, and not everyone in Wyoming shares their coal-fired enthusiasm.
LJ Turner of Campbell County raises cattle and sheep on land his family homesteaded in 1918. Strip mines tear away his grazing land; oil and gas pollute his water sources. The Star-Tribune recently published Turner’s “Open letter to Gov. Mead,” on its editorial page. Here are excerpts:
“Our ranch has lost over 6,000 acres of good grazing grasslands to strip mines and none of this land has been restored…
“The amount of acres that have (met required restoration standards) is pitiful, at a mere 6 percent,” he wrote.
“Much of the coal mined in Wyoming is… leased at way below market rates through a process that has now become a national scandal. Taxpayers like you and me get cheated out of revenue to fund schools and public services every time more coal gets leased.”
He continued, “Our cattle herd has experienced health problems caused by fugitive dust and toxic blasting pollution.”
“I hope you will think twice about our concerns before you further tout the massive export of Wyoming coal to Asian countries.”
Photo by Paul K. Anderson
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