POWER PLAY | Cheap electricity, a changing climate This is part of a series exploring how the world’s hunger for cheap electricity is complicating efforts to combat climate change.
A few feet below this prairie town lies one of North America’s biggest coal deposits, a 100-foot-thick slab of brittle black rock spanning an area the size of Rhode Island — nearly all of it owned by the U.S. taxpayer.
Just a dozen nearby mines, scattered across a valley known as the Powder River Basin, contain enough coal to meet the country’s electricity needs for decades. But burning all of it would release more than 450 billion tons of carbon dioxide into the atmosphere — more than all greenhouse-gas emissions from all sources since 2000.
The Obama administration is seeking to curb the United States’ appetite for the basin’s coal, which scientists say must remain mostly in the ground to prevent a disastrous warming of the planet. Yet each year, nearly half a billion tons of this U.S.-owned fuel are hauled from the region’s vast strip mines and millions of tons are shipped overseas for other countries to burn. Government and industry reports predict a surge in exports of Powder River coal over the next decade, at a time when climate experts are warning of an urgent need to reduce coal burning to prevent global temperatures from soaring.
Each shipment highlights what critics describe as a hypocrisy underlying U.S. climate policy: While boasting of pollution cuts at home, the United States is facilitating the sale of large quantities of government-owned coal abroad.
“We’re a fossil-fuel-exporting superpower that goes around lecturing the rest of the world about cutting emissions,” said Paul Bledsoe, who was an adviser on climate change during the Clinton administration. “The United States is reducing its domestic coal use and then simply exporting some of those emissions abroad.”
The production of electricity is the leading source of man-made greenhouse gases in the atmosphere, and the global demand for electricity, particularly in developing nations, will only grow. Coal accounts for 40 percent of the electricity produced globally — and more in China and India.
In December, the United States will join more than 190 other countries in Paris to negotiate a climate treaty, one that will be built largely on the pledges of individual nations to cut down on greenhouse-gas emissions. Restraining industrial and transportation-related emissions won’t be sufficient to meet the promises — electricity has to be part of the mix.
The Obama administration has pledged ambitious cuts in carbon pollution over the next 15 years, but that does not reflect emissions from coal and other fuels sold to nations in Asia, Europe and North Africa. Because of accounting procedures approved by diplomats during past climate negotiations, countries are responsible only for the emissions that occur within their borders.
“The Obama administration can’t have it both ways, limiting carbon pollution while encouraging exports of coal from U.S. public lands to overseas markets,” said Amanda Jahshan, an energy fellow with the Natural Resources Defense Council’s office in Bozeman, Mont.
Administration officials acknowledge the policy dissonance, which stems from decades-old programs Congress created to ensure that taxpayers receive the maximum benefit from minerals and fossil fuels buried in government-owned land in Western states. The policies allow coal companies to lease the rights to federal coal deposits — often at prices far below market rates — and then sell the coal at home or abroad.
In the Powder River Basin, the energy-rich region that spans northeastern Wyoming and southeastern Montana, foreign exports represent a modest share of the overall coal production: about 15 million tons annually, most of it sold to Asian countries such as China and India.
But with domestic demand shrinking, mining firms are looking to sell more coal abroad. Even as exports have fallen because of the economic downturn in Asia, U.S. companies are building the infrastructure for what analysts think will be a booming export market by the end of the decade. Backing the industry are lawmakers in Congress and state houses who are pushing for new rail lines and port facilities to handle the increased traffic.
U.S. officials have given mixed signals about whether they would support such an increase. Interior Secretary Sally Jewell, whose department manages coal leases, recently called for realigning the government’s coal policies in a way that is “consistent with our climate policies.”
Yet, the government continues issuing new leases for Powder River coal, in ever greater quantities. The Interior Department is finalizing leases for 2.5 billion tons of Powder River coal, and agency documents released earlier this year propose making an additional 10 billion tons available for mining — and, potentially exporting — over the next 25 to 30 years.
Some current and former U.S. officials who helped manage the federal program said increasing exports would send the wrong message to the rest of the world.
“It erases everything the Obama administration is trying to do,” said James R. Baca, a former director of the Bureau of Land Management, the Interior Department agency that oversees coal mining on government land. “The president is trying to reduce the use of coal, and these programs are going the opposite way. It doesn’t make any sense.”
By any reasonable calculation, the dark fuel that lies beneath a shallow layer of rock and dirt here is a national treasure.
The coal is but one part of a fossil-fuel trove in the Powder River Basin, a 26,000-square-mile swath of semiarid grassland. Sixty million years ago, the region was a partly tropical swamp, one that left its mark in the form of a thick layer of dead vegetative matter hundreds of feet thick. Over eons, the organic matter was buried under sediment, and a combination of time, heat and pressure transformed it into sub-bituminous coal, a kind of steam coal that can be burned in a power plant to make electricity.
Nearly all of the coal is government-owned as a result of century-old laws that cede to the federal government the ownership of minerals that lie beneath much of the West’s land. Mining companies in the basin typically pay as little as $1 a ton for the federal coal they mine, although Washington assesses additional royalties and fees, and requires bonding to ensure the sites are cleaned up after mining operations end.
Coal company officials insist that taxpayers are getting an exceptional deal.
“The law requires maximum economic recovery for these reserves,” said John Eaves, chairman of the board for Arch Coal, the coal giant and the operator of Black Thunder, a Powder River Basin mine that ranks among the largest surface mines in the world. “Few industries anywhere generate such a high percentage of value for the public good.”
The “value” here stems in part from the fact that Powder River coal is cheap, by world standards. By a geology quirk, the basin’s biggest coal seam is unusually thick and sits just below the surface. There are no tunnels to dig and no mountaintops to blast away. The labor and materials required to extract the coal puts the average going price at about $10 a ton, a quarter of the cost of coal mined in Appalachia and little more than a sixth of the market price of Chinese coal. Wyoming’s coal contains less energy but also less sulfur, so it burns more cleanly.
The low price has helped drive coal operations out of business in other parts of the country while also increasing the appeal of Powder River coal as an export commodity. Advocates for increased exports include not only coal companies but also elected officials who worry about the economic impact of lower coal sales in the United States. Revenue from coal has helped ensure the popularity of the federal coal-leasing program in Wyoming and Montana, where the industry has a protected status among a wide range of elected officials, including senators, governors and city council members, said Baca, the former Bureau of Land Management director.
Administration officials have acknowledged that the country, and the world, will continue to rely on the basin’s coal for decades. A third of the U.S. electricity supply comes from coal, and coal remains the cheapest option for many developing countries that are struggling to provide energy for growing economies.
“Coal is, and will continue to be, an important part of our energy mix for the foreseeable future,” Jewell, who has championed solar and wind energy during her two-year tenure, said at a public hearing in Washington in August. “We’re sitting under light right now that is being produced from coal.”
Industry officials say U.S. coal exports have a negligible environmental impact because Asian power plants will continue to burn coal regardless of what U.S. policymakers do. If China and India are shopping for coal anyway, why shouldn’t they buy it from American mines, asked Luke Popovich, a spokesman for the National Mining Association.
“What taxpayers are being helped by denying the United States — with the biggest coal reserves in the world — the fastest-growing markets for coal in the world?” Popovich asked.
The Obama administration has said reducing reliance on coal is a key part of its climate strategy. The Clean Power Plan that the Environmental Protection Agency adopted in August seeks to scale back the use of coal by limiting pollution from electricity providers. The White House’s plan for reducing U.S. carbon emissions by up to 28 percent by 2030, compared with 2005 levels, hinges primarily on restricting the use of coal at home.
“We’re the first generation to feel the impact of climate change and the last generation that can do something about it,” President Obama said in an Aug. 3 speech announcing the plan.
The enthusiasm for expanded mining is not universally shared, even here in the heart of Powder River coal country. The prospect of a surge of export-fueled mining faces determined resistance from a broad array of opponents, such as local landowners who are concerned about property values and national environmental groups that oppose expanded markets for coal.
Outside Gillette, a town of 30,000 that dubs itself the “Energy Capital of the Nation,” some longtime residents question whether more of the region’s gently rolling rangeland should be ripped up for the sake of increasing coal sales to Asia.
L.J. Turner, 74, a rancher whose property borders a large mine, now grazes his cattle next to a moonscape of bare rock and dirt. Excavation has caused wells on his property to run dry, and the corrosive dust from constant digging affects humans and livestock for miles around. When Turner’s calves began dying a few years ago, he consulted a veterinarian, who quickly diagnosed the problem: dust pneumonia. Turner’s health has suffered too, he said.
“We have accepted an awful lot because the nation needs the energy,” Turner said. “It’s one thing to be a national sacrifice zone for the country to provide the United States with electricity. It’s another thing altogether to sacrifice what we have so Chinese and Indian companies can have cheap energy and compete with us.”
In Gillette, coal’s contributions to the local economy are apparent in amenities unusual for a town of its size, including a 9,000-seat concert arena and an Energy Capital Sports Complex built on 300 acres. But not everyone is eager to see new rail lines hauling miles of coal-laden freight cars through the center of town.
“This is a finite resource. Is this the best use of it?” asked Shannon Anderson, a lawyer with the Powder River Basin Resource Council, a local nonprofit group that advocates for sustainable development of the region’s energy reserves.
“Most people around the country are surprised when they find out that the coal mined here is federally owned,” Anderson said. “The corporations drive the decisions, and the federal government usually goes along with it. But the coal belongs to you and me, and we need to make sure they get it right.”