New Coal Rules Give Trump Political Opportunities

The Obama administration has fired two parting shots at the coal industry that are more about public relations than environmental protection. They could be early and easy targets for the incoming Trump administration to show its resolve to “rescue” coal.

Just about a year ago, in January, the administration announced a moratorium on new coal leases on federal land, including leases in the application process. Interior Secretary Sally Jewell said the moratorium would be temporary, while the administration took a new look at the coal leasing program that dates to the 1980s. Jewell said, “That was a time, 30 years ago, when our nation had very different priorities and needs. The result was a federal coal program designed to get as much coal out of the ground as possible, and in many ways that’s the program that we’ve been operating ever since.”

Federal Coal Production

Federal Coal Production

During the moratorium, Interior said it will produce a programmatic environmental impact statement on federal coal leasing. That’s likely to take years, as the program is complex and controversial, so litigation is almost certain to accompany the EIS.

The Powder River Basin in Wyoming and Montana, the largest coal operation in the world, is built on leases of federal coal managed by Interior’s Bureau of Land Management. Powder River coal captured a large portion of the U.S. electric generating market because it is easily mined and cheap as a result, and because of increased demand in the 1980s and 1990s for low-sulfur coal. When competitive rail routes came to the region, PRB coal reached ever deeper into the electric market, penetrating to the U.S. south and east, displacing expensive underground coal.

A coal leasing moratorium is unlikely to have an impact on PRB production, where enormous coal reserves are already under long-term federal leases. Companies in the PRB shouldn’t feel any economic pain from the moratorium, as demand for steam coal in the U.S. is declining as gas is picking up the market for new generation and electricity load isn’t growing much.

There may be an impact in Utah, where two counties, Kane and Garfield, have sued to overturn the moratorium, as reported in The Salt Lake Tribune. The attorney for the counties said that “the coal moratorium is an arbitrary and capricious decision by the secretary, which should be vacated as ill-considered and contrary to law.” But the Utah production that could be shut off by the moratorium is not significant beyond Utah.

This action by the Obama administration gives the incoming Trump crew an easy way to claim they are bringing back coal jobs, a campaign pledge. Look for Trump’s team to vacate the moratorium, for what that’s worth.

Then this week (Dec. 19), the Obama administration gave Trump another easy win, when Interior’s Office of Surface Mining Reclamation and Enforcement (OSM) announced new rules for reclaiming strip mines. The Stream Protection Rule has been under development for six years, tightening earlier rules OSM adopted in the George W. Bush administration under the 1977 Surface Mine Control and Reclamation Act, one of the lasting legacies of the Carter administration.

A Wall Street Journal editorial said Wednesday, “Ostensibly it’s about keeping American waterways clean. In reality it’s a power grab aimed at giving federal regulators more authority to make coal too expensive for anyone to mine or use.” The Journal argued that the rule “is legally dubious, given that the new rule conflicts with” the 1977 law, “which specifically prohibits initiatives that duplicate other federal environmental rules.”

The OSM rule pins a “kick-me” sign on the outgoing administration. Senate Majority Leader Mitch McConnell (R-Ky.) has already said he will use the Congressional Review Act to kill the rule, which is set to go into effect Jan. 19, the day before Trump’s swearing in as president. Democrats in Congress will be unable to save it, as the review act cannot be filibustered in the Senate.

Press coverage of the new surface mining rule created the impression that the earlier mine reclamation rules haven’t worked. But there is plenty of evidence that they have. On the day the administration announced the new stream rules, West Virginia Gov. Earl Ray Tomblin (a Democrat) and officials from the state’s natural resources agencies trumpeted the return of elk to the state, imports from Kentucky. The Elk will graze on 32,000 acres in Logan, Mingo, and Lincoln counties, bought by Conservation Fund for $20 million and turned over to the state, which acquired another 10,000 acres on its own. The lush grazing for the elk, which haven’t been seen in West Virginia in 141 years, is reclaimed mine land.