Reckoning Comes to Western Coal Country
The Otter Creek Valley in Eastern Montana is a wide, grassy plain cut by red dirt roads and the “crick,” a slow-snaking stream that drains into the Tongue River. When I visited in mid-August, wheels of hay dotted the fields, and the bushes along the road were heavy with chokecherries. The quiet valley felt worlds away from the strip mines and strip malls of Campbell County. Arch Coal, however, has plans to turn Otter Creek into the largest new mine in the country, some 7,639 acres holding 1.3 billion tons of coal. Arch’s ability to sell Otter Creek reserves depends on construction of the Tongue River Railroad, a long-stalled forty-two-mile stretch that would cut through private ranches and an Amish community.
One of the ranches the railroad would cross belongs to Wally McCrae and his son Clint, who breed cattle on land their family settled in 1882. The McCraes’ opposition to Otter Creek is based on property rights; they and dozens of other ranchers are alarmed by the railroad’s plans to condemn their land and the potential for pollution. The McCrae ranch sits just outside the town of Colstrip, home to Montana’s largest coal-fired power plant. Wally says that when he was a kid, his family was proud of the strip mine next door. “We would take our relatives from Minnesota over there and show them the ‘big shovel,’ the Bucyrus- Erie 1050, the largest scoop shovel in the world.” But coal, power and railroad companies have not been good neighbors, with one result being contaminated groundwater and poisoned cattle.
Opponents of Otter Creek also include residents of the Northern Cheyenne Reservation, which sits immediately west of Otter Creek and atop some of the largest coal reserves held by any tribe in the country. The Northern Cheyenne fought off coal development on their land in the 1970s, and although the economy on the reservation is in as dire a shape as it is for the neighboring Crow tribe, which inked a coal deal with Cloud Peak in January, many Northern Cheyennes have little faith in the promise of coal revenue.
Vanessa Braided Hair is one of the most vocal opponents of the Otter Creek development. A descendant of Native homesteaders who were kicked off their land in Otter Creek, she has worked as a wild-lands firefighter for nearly a decade and has seen the intensity of the fires increase. Last year, the Ash Creek fire ripped through 250,000 acres and destroyed several houses. The fire was so hot along sections of the Tongue River that superheated sap blew the bark off the cottonwood trees, leaving bone-white snags. “It’s gotten worse and worse,” Braided Hair told me. “You know it’s due to climate change.” She organizes opposition to the mine on the reservation, and although she tries to make the connection between coal and the climate, she told me the most effective argument is about the danger to ancestral lands. The terrain is made up of rock bluffs and coulees, sagebrush, aspen groves and stands of ponderosa pine, wild raspberries and crab apples—far more difficult to reclaim than the flat grasslands of Campbell County, Wyoming.
Otter Creek’s opponents worry that new infrastructure will open up the area to other mines. The Montana section of the PRB is largely untapped, and its reserves are greater than Wyoming’s, making the area attractive to investors. Otter Creek’s backers say the mine will be open within the decade, but in September the Tongue River Railroad Company ran out of money to conduct an environmental impact statement, delaying the permitting process by at least a year. Without the rail link, Otter Creek coal is stuck.
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Throughout the PRB, coal companies are scrambling to build routes to new markets. Historically, coal has left Wyoming via freight train for power plants in the Midwest and Southwest. But domestic demand has fallen steeply, as have appetites in Europe. Producers see Asia as the source of future profits, and shipping PRB coal there requires expanded rail capacity and new port facilities on the Pacific Coast. The three ports awaiting approval in Oregon and Washington would send upward of 100 million tons of coal each year to Asia, which amounts to roughly 200 million metric tons of carbon dioxide when the coal is burned. For comparison, the high estimate for the annual carbon pollution from the burning of oil transported via the Keystone XL pipeline is 181 million metric tons.
In the Pacific Northwest, grassroots activism that began with local opposition to the prospect of uncovered coal trains rumbling along fragile waterways and through urban centers has expanded into a regional movement sounding the alarm about the many paradoxes and perils of expanding coal production in the PRB. This coalition—more than the government—presents a threat to Big Coal’s plans. Protesters have employed many of the lessons gleaned in the Keystone XL fight about creative direct action, and have raised the profile of the work that groups like the Powder River Basin Resources Council have been doing for years to challenge the leasing program. Vanessa Braided Hair and Clint McCrae both traveled west to testify at public hearings, which have drawn thousands.
Critical to the opposition is the engagement of Native American nations, which have unique legal and cultural claims. The site proposed for the largest of the ports is on land in Cherry Point, Washington, an area sacred to the Lummi Nation. The tribe depends on fishing in the coastal waters that will be vulnerable to coal dust pollution. The Lummi Nation has protested the Cherry Point facility for months, and the fifty-seven-member Affiliated Tribes of Northwest Indians has asked for an environmental assessment that considers the regional and climate impacts of the terminals, as have the governors of Oregon and Washington. Federal agencies have so far declined to conduct a comprehensive study, so state officials are left to consider the projects individually.
If coal mined in the PRB is soon to be headed for Asia, the federal leasing program makes less sense than it ever did. “How do those subsidies meet our need of increasing domestic energy security and providing reportedly low-cost energy for the nation?” asks Shannon Anderson, a lawyer who works with the Powder River Basin Resources Council. Meanwhile, producers have a narrowing window in which to take advantage of the deal. China, long thought to be the bull market of the future, has recently tightened pollution controls, and new advances in Chinese coal production have slackened that country’s hunger for imported coal. Citibank, Goldman Sachs, Deutsche Bank, Bernstein and IHS analyses released this year all predict Chinese demand will peak in the next two decades. “We believe that thermal coal’s current position atop the fuel mix for global power generation will be gradually eroded,” wrote the Goldman Sachs analysts. “Most thermal coal growth projects will struggle to earn a positive return for their owners.”
Regardless of market conditions, the United States Geological Survey predicts that the PRB has only twenty-five years of recoverable coal left. That’s plenty of coal to wreck the climate, but it’s a salient point in response to the claim that cutting back production in the PRB would devastate the local economy. Coal stocks have dropped by 30 percent in the past five years; production is on track to fall to a twenty-year low; and coal prices around the Pacific Rim have collapsed. “The coal industry is in free fall, and they don’t have a plan,” says Sanzillo. A managed drawdown could keep the PRB from mirroring Appalachia, where coal reserves are all but exhausted and companies are leaving a string of bankruptcies and shattered communities behind. Since federal policy crowned PRB coal king in the first place, it’s worth asking what kind of responsibility the government bears for managing regime change.
Something extraordinary happened in August: for the first time, no one bid on a PRB tract the DoI offered for sale—not even Cloud Peak, the company that had applied for the lease. A month later, the agency rejected the lone bid for another tract because the 21-cent-per-ton offer was too low. Analysts viewed these failed auctions as another sign that regardless of federal policy, the markets are imposing their own moratorium.
In the bar in Gillette, I asked Mike what he would do if he didn’t work in the coal mines. He shrugged. Natural gas, he guessed. He’d probably have to move. “There’s nothing else to do here.”
In the May 20 issue, Naomi Klein reported that some mainstream environmental organizations are trying to wean themselves from fossil fuel investments—but some aren’t.