Coal should stay in the ground.
I’ve mostly been offering modest praise for Obama’s climate plan, but there are some notable oversights. While it addresses U.S. coal-fired plants through EPA regulations, it neglects another, equally large aspect of the coal problem. Specifically, I’m talking about coal mining, leasing, transport, and export in the U.S. Northwest. There’s a bad situation there and it’s getting worse.
The Powder River Basin stretches across southeast Montana and northeast Wyoming. It is rich with low-grade (dirty) coal. Most of that coal is on public land, owned by you and me. What you and I are doing at the moment, via the Bureau of Land Management in the Department of the Interior, is leasing the mineral rights on those public lands to coal companies for pennies on the dollar.
Domestic demand for coal is declining (and will decline further once EPA regulations are in place), so what these coal companies want to do is start shipping the coal by rail to the West Coast and from there exporting it to China and other coal-hungry developing countries, where it sells for prices up to seven times higher than in the U.S.
It’s a sweet deal for the coal companies: buy low, sell high. But it’s a raw deal for everyone else and a disaster for the climate.
Joe Smyth has a great post about the rotten coal-leasing program here, and I wrote about the push for coal-export terminals here. There’s lots of background in those posts if you want it. In this post, I’ll mostly focus on the topic at hand, which is what Obama can and should do about it.
First, the coal-leasing program. A recent report from the Inspector General at Interior revealed that the program is (or rather, remains, after decades of corruption [PDF]) terribly run, with spotty enforcement, very little competitive bidding, disregard of rising exports, and prices that fall well below going market rates. Overall, writes The New York Times, the program’s failures “deprived taxpayers of almost $30 billion over the previous 30 years.”
The BLM says it has a “task force” looking into it, for whatever that’s worth. Obama should make it a priority to finally clean up that cesspool.
But he should go farther than that. The problem is not just that the public is leasing coal at below-market rates, it’s that market rates are too low. Coal markets do not currently internalize the costs imposed by carbon pollution (the “social cost of carbon”). Obama should insist that the social cost of carbon be integrated into the leasing program. That would more fairly balance the public’s interest in revenue from leases with its interest in a livable climate. Such a move would substantially reduce the the amount of coal leased on public land — as it should.
Second, coal exports. “Turning Cascadia into a conveyor belt for coal,” as KC Golden puts it, flies in the face of the region’s character as a nature-rich tourist destination and as a high-skill, high-tech hub. Dozens of new coal trains a day would thunder through the region’s small towns (and my beloved Seattle as well), making noise, clogging traffic, and spewing toxic dust. The coal would then be loaded on to giant, polluting ships in giant, polluting ports, turning the bucolic coastal towns where they are located into loud, dirty industrial hubs. All to ship coal the American public got scammed out of to China, where it will be burned and accelerate climate change.
It’s insane. And it’s running into resistance that may prove fatal. Three of the six proposed coal export terminals have been scrapped and the others face serious problems. Delay alone could kill the remaining ports, as there are signs that China’s demand for coal may fall short of expectations. News of slowing Chinese growth is part of what sent coal stocks tumbling the other day.
What’s needed is a comprehensive environmental assessment of the whole network of coal leases, trains, and ports, an assessment that includes the effects on carbon emissions. (Preliminary analysis shows that — shocker — exporting the coal would raise carbon emissions [PDF].) Only the feds can do that kind of analysis. The governors of both Washington and Oregon have asked the feds for one, as have mayors, members of Congress, and activists. But just the other day, the Army Corps of Engineers refused (again). That’s Obama’s corps. He should kick their asses into gear and get a comprehensive assessment underway.
Remember what Obama said about Keystone: “Our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution.” How does turning over one of the world’s biggest dirty coal fields to private companies for cheap not exacerbate the problem of carbon pollution?
Of course it does. Digging up and burning that Powder River Basin coal will put enough carbon in the atmosphere to undo all of Obama’s other climate work.
If Obama really believes, as he proclaimed on Tuesday, that increasing climate pollution is not in the nation’s interests, then he needs to get serious about stopping coal leasing and coal exports in the Northwest.
