There’s been much to-do in the past month about the “war on coal,” the latest front of which is, supposedly, the Environmental Protection Agency’s new rule to cut carbon emissions from power plants. This “war” has already been invoked in midterm election campaigns, not just by Republicans but also by coal-state Democrats who protest that the industry is being singled out for euthanasia.
They’re half right. It’s important to distinguish between coal mining communities and Big Coal corporations; technology and geology doomed the former, not government policy. Coal mining jobs have been disappearing for decades as strip mines and advanced machinery made the work less dependent on human labor. In Appalachia, coal itself has run out, at least in reserves that are economically feasible to mine. Still, Big Coal’s investors and political supporters are right to notice that in a carbon-constrained world, their product has to be phased out even further. Burning carbon rocks is just irreconcilable with climate action.
What all this “war on coal” talk is missing is the fact that while the Obama administration is taking steps to discourage coal consumption at home, it is tacitly promoting coal exports overseas. Last week the Bureau of Land Management announced plans to lease more than 8 million tons of coal on public lands in Colorado’s Delta County—a continuation of a decades-long debacle known as the federal coal leasing program, which has cost taxpayers billions and effectively acted as a subsidy for Big Coal.
The primary benefit of the Delta County sale, according to the BLM’s environmental impact statement, is that it will be a “contribution to the supply of coal to meet the nation’s energy demands.” This is a fishy statement considering that demand for coal in the United States is at a twenty-four-year low. It looks particularly ludicrous in light of the fact that the prospective buyer, Bowie Resources, has been aggressively trying to develop new pathways to get its landlocked Western reserves to Asia—in other words, is actively looking for ways to avoid contributing to the domestic coal supply.
Bowie’s financial incentives are simple: demand for coal is still growing overseas, particularly in China, and it makes sense to go in search of higher price outside the United States. But things get more complicated when the coal Bowie and other producers are selling is taxpayer-owned, as most Western coal stocks are. Among the many problems with the leasing program is that the BLM “does not fully account for export potential” when it prices publicly owned coal, according to a 2013 report by the Interior Department’s inspector general. While giving producers access to below-market coal was originally intended to ensure a cheap supply of domestic energy, the leasing program now looks more like an arrangement benefitting Big Coal alone. As Massachusetts Senator Ed Markey wrote in a February letter calling for a moratorium on new federal coal leases, “Taxpayers are likely losing out so that coal companies can reap a windfall and export that coal overseas where it is burned, worsening climate change. This is a bad deal all around.”
So far the Obama administration has failed to address the climate implications of subsidizing coal exports with below-market prices (or, for that matter, the contradictions between the president’s climate agenda and his “all of the above” energy strategy more generally). It looks like the courts may beat the administration to the punch. Days before the Delta County sale was announced, a US District judge ruled that the BLM and the US Forest Service violated federal law by failing to consider the social cost of carbon before approving an expansion of a coal lease in Colorado’s Gunnison County. “While the agencies provided an adequate disclosure of effects on adjacent lands, their treatment of the costs associated with [greenhouse gas] emissions from the mine was arbitrary and capricious,” wrote Judge R. Brooke Jackson.
So far Big Coal’s export-expansion dreams have been kept at bay by local opposition to new port facilities in California and the Pacific Northwest. But that doesn’t resolve the incoherence between Obama’s regulatory agenda at home, which is intended to cut carbon emissions, and the administration’s resistance to considering the global warming implications of the leasing program, which continues largely unreformed despite successive reports of poor management. If Big Coal is dying, it’s going out with a bang; according to the BLM, leases are pending for 3.5 billion tons.