The Only Fair Return is Keeping Coal in the Ground

After years of rebuffing calls for change (and even highly visible endorsements of more coal production from former Interior Secretary, Ken Salazar), the U.S. Department of the Interior and Interior Secretary, Sally Jewell, are engaging the American public in an “honest conversation” about how to reform the management of our publicly owned coal.

It’s a watershed moment in the history of the Interior Department and the federal coal program, and a refreshingly welcome sign that the agency is finally starting to take seriously the need to stop rubberstamping more coal mining in the U.S.

After all, the Interior Department directly oversees the production of more than 40% of our nation’s coal, the vast majority of which comes from extensive publicly owned deposits in the western U.S.  When burned, this coal produces more than 11% of our nation’s total greenhouse gas emissions, a distressingly odd situation considering the Obama Administration’s express commitment to combating climate change.

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Coal train hauling a load south out of the Powder River Basin of Wyoming.

The federal coal program also stands in stark contrast to the President’s signature climate accomplishment, the Clean Power Plan, which was finalized by the Environmental Protection Agency earlier this month.  Even middle of the road environmental groups like The Wilderness Society have described the federal coal program as a “blind spot” in our nation’s plans to curb carbon emissions.

Yet in moving forward with its “honest conversation,” there seems to be a lack of forthrightness from the Interior Department.  Rather than come clean and tell the American public that its reform efforts are about the fate of our publicly owned coal, they’re couching reform in terms of “fair return,” asking the public, for example, to provide comment on royalty rates, fair market value, and how to ensure greater competition when leasing.

Everybody loves a “fair return,” no doubt, but from a climate perspective, the only way the American public public gets a fair return from coal is when it’s kept in the ground.

We all know this.  It’s why as the Interior Department has engaged in a series of “listening sessions” in the western U.S., the agency has been overwhelmed with comments and concerns about the future of coal.  Like last week in Gillette, Wyoming, the heart of the Powder River Basin, the nation’s largest coal producing region, where people overwhelmingly called on Interior to consider the future of their community.

The folks in Gillette get it.  This isn’t about reaping more money for taxpayers, this is about figuring out how to get to keeping it in the ground.  As I remarked:

“We can’t keep mining and burning coal and have any chance of meaningfully reducing carbon emissions and combating climate change….The reality is we have to move beyond coal and we have to leave it in the ground.”

That’s why as the Interior Department’s “honest conversation” has unfolded, WildEarth Guardians has aimed for the heart of what matters here.  In a report released earlier this month, we presented our plan for how the agency can get to a point where our coal is kept in the ground and our climate protected.  The plan includes five key milestones, including:

  1. A moratorium on leasing more coal;
  2. Retiring existing leases that are not producing;
  3. Recovering carbon costs as coal is produced;
  4. Honestly reporting to the American public on the true climate impacts of the federal coal program; and
  5. Helping communities dependent on publicly owned coal transition to more sustainable and prosperous economies.

By our measure, within 10-25 years, we can end the federal coal program by following this path.

Report Cover

Certainly, it won’t be easy.  Helping communities like Gillette transition away from coal will require immense leadership from the Interior Department and a commitment from Congress and other agencies to provide the resources to make it happen.  As coal companies continue to go bankrupt, don’t expect any help from them.

Of course, that’s assuming consensus builds around the need for transition.  Even though communities like Gillette understand that Interior’s reform efforts are really about the fate of coal, they deny, adamantly, that this fossil fuel has no role in our future.  In fact, Wyoming Governor Matt Mead called on the Interior Department to “Keep coal profitable.”

It’s bizarre.  With agreement over the role of coal in fueling climate change, scientific studies confirming that coal has to be kept in the ground, mounting evidence that more carbon emissions are costing our nation and our world dearly, and even ongoing federal court rulings against Interior for failing to address the climate impacts of more mining, the writing is on the wall.

Coal is going to go away, whether Gillette likes it or not.  Denying this reality, or worse deceiving people into believing this fallacy, is nothing short of reckless.

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Coal silos in Powder River Basin of Wyoming.

In the meantime, the Interior Department’s coal reform listening sessions are wrapping up this week in Denver and Farmington, New Mexico.  WildEarth Guardians will be there in force telling Interior to keep it in the ground.  Join us if you can, we’ll be rallying beforehand and spreading the word.  Here’s more info. on the Denver and the Farmington hearings.

And if you can’t attend a hearing, sign our petition calling on Interior Secretary, Sally Jewell, to keep our coal in the ground.  It’s our future, let’s speak out for it!

We can’t buy our way out of global warming.  The only fair return is to keep our coal in the ground.

WildEarthGuardians_Coal

Interior Department Killing Climate Progress

The climate hypocrisy of the U.S. Department of the Interior reached new and absolutely bizarre lows this past week.

On Monday, Sally Jewell, Secretary of the Interior Department, helped unveil the largest solar farm on our public lands, commending the project for taking “action on climate change” and helping “move our nation toward a renewable energy future.”

The plaudits were well founded.  After all, an estimated 300,000 tons of carbon stand to be displaced annually by the 550 megawatt solar farm, not an insignificant amount.

Two days later, however, Sally Jewell completely obliterated this climate progress.

In an oil and gas lease sale in Colorado, the Interior Department’s Bureau of Land Management auctioned off 15,424 acres of public lands for drilling and fracking in the Little Snake Field Office in northwest Colorado.

Touted as an economic success, what the Bureau of Land Management failed to acknowledge is that development of these leases would fuel an increase in carbon dioxide (i.e., CO2) emissions to more than 800,000 tons annually just in the Little Snake Field Office.  The chart below, taken from the agency’s own environmental analysis, plainly shows the projected increase.

CO2 increase in Little Snake Field Office

Air emission increases projected in the Bureau of Land Management’s Little Snake Field Office of western Colorado (taken from p. 23 of the agency’s analysis).

That’s not the worst of it.  The chart above also shows that methane emissions (i.e., CH4) from oil and gas development would increase to 19,247 tons annually.  Given that methane is 86 times more potent than carbon dioxide, that amounts to more than 1.6 million tons of carbon dioxide equivalent.

When everything is said and done, we’re looking at a decision by the Interior Department that will increase carbon emissions by more than 2 million tons annually.

carbon differences

The net carbon increase is actually 2,184,229 tons annually.  No climate benefits will be remotely reaped by the Interior Department’s solar project. 

And as if this wasn’t bad enough, this increase doesn’t even take into account the carbon emissions that will result from the burning of the produced oil and gas.  All told, we’re taking about a major carbon setback.

So much for the benefits of solar, so much for climate progress at the Interior Department, and so much for moving our nation toward renewable energy.

Oh, and as for the claimed economic success of the Bureau of Land Management’s oil and gas lease sale?  Taking into account the value of carbon, which could be as high as $220 per ton, we’re looking upwards of $480 million in costs.  That’s a far cry from the $319,113 in revenue reported by the agency.

The worst of it is, more oil and gas leasing and even more carbon pollution is on the horizon.

Just this past week, the Bureau of Land Management announced plans to lease 35,000 more acres of public lands in Colorado, including 25,000 acres of the Pawnee National Grassland.  And next week, the agency intends to auction off 12,000 acres of public lands for fracking in southern Utah.

The climate hypocrisy of the Interior Department seemingly knows no bounds.  For our nation and our future, hopefully this will change and change soon.  We can’t save the climate by selling more oil and gas.

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Public lands oil and gas development approved by the Department of the Interior is destroying climate progress.

Decorative Coal Landscaping? Anyone?

Coal is mined for one reason:  to be burned.

It’s not used for decorative landscaping.  It’s not used for building material.  It’s certainly not used for jewelry.  Whether it’s for power (the primary use) or industrial purposes (steel, cement, etc.), the bottomline is, coal is mined to be burned.

So it was curious, if not utterly bizarre, to see the U.S. Interior Department’s latest response to concerns over the environmental impacts of authorizing more coal mining in northwestern Colorado.  That response?

“Combustion of the coal is too speculative.”

Too speculative.  In other words, according to the Interior Department, even though coal is mined for one reason and one reason alone–to be burned–it is too speculative to conclude that more coal mining will lead to more coal burning.

This has to be the most purposefully incompetent, willfully ignorant, and deliberately reckless responses to public concerns over coal burning.

And sadly, it gets worse.

The decision at issue is a new coal lease for Peabody Energy’s new Sage Creek coal mine in northwestern Colorado.  As I’ve blogged about before, Sage Creek is intended to fuel Xcel Energy’s nearby Hayden power plant.  Peabody is gunning for a federal coal lease to lock in the mine as a long-term source of coal for Hayden and potentially even for export to Europe.

Last fall, the U.S. Bureau of Land Management, the Interior Department agency charged with managing federal coal, proposed to auction off a new coal lease for Peabody to complete its Sage Creek mine.  Before doing so though, the agency had to analyze the environmental impacts of the new coal lease and solicit public input.

WildEarth Guardians responded.  And, of course, we called on the Bureau to address the fact that the coal from the Sage Creek mine would not only be burned in the nearby Hayden power plant, but fuel more coal-fired power plants in the U.S. and possibly abroad, leading more greenhouse gases and other harmful air pollution.

It goes without saying that more coal leasing means more coal mining, which of course means coal burning.  So, it also goes without saying that the Bureau of Land Management has a duty to address these impacts and perhaps temper its decision to better protect our health and the environment.

At least, that’s what we thought.

Because when the Bureau finally responded to our comments, it wasn’t a thoughtful analysis of environmental impacts or a meaningful effort to, perhaps, minimize the global warming impacts of its coal leasing decision.  No, it was this:

“Combustion of the coal is too speculative.”

Read for yourself on page 63 of their Environmental Assessment (or see the bottom of page 25).

The disconnection from reality is stunning.  Even Peabody has said coal from Sage Creek is intended to be a long-term fuel source for the Hayden coal-fired power plant, and has invested millions to make it happen and is locking in contracts as I write.

We know the U.S. Interior Department refuses to admit that its coal leasing and mining decisions have any greenhouse gas implications, but this latest claim–that combustion of Sage Creek coal is speculative–takes the cake.

This isn’t just an agency that’s avoiding responsibility, it’s an agency that’s demented.

Because if coal from the Sage Creek mine in Colorado isn’t burned, perhaps the Interior Department thinks it’s going to be used for decorative landscaping.  Or maybe building material.  Or maybe jewelry.

We can only hope.

In the meantime, that’s f-ing crazy.
Coal Mine

Coal mining…for decorative landscaping?

All Coal Goes Back to…Portland, Oregon?

Meet Pacificorp, a utility company that owns and operates more coal-fired power plants than anyone else in the American West and that happens to be headquartered, of all places, in Portland, Oregon.

Which is kind of odd because when I think of coal, the last thing that comes to mind is Portland, Oregon.

Nevertheless, with Pacificorp headquartered in old Stumptown, it literally makes this city the coal burning capital of the American West.  It’s quite a distinction, especially for a  city that’s normally known for being the greenest in the country.

For those who don’t know Pacificorp, the company owns all or portions of 11 coal-fired power plants in Arizona, Colorado, Montana, Utah, and Wyoming.  Its total coal-fired electric generating capacity amounts to 6,781 megawatts, more than any other utility in the West.

Its coal-fired electricity powers a vast service area, including portions of California, Idaho, Oregon, Utah, Washington, and Wyoming.  And even though the company has other sources of electricity, including hydro and wind, coal dominates the company’s portfolio.  That means coal is powering Oregon, California, Washington, Idaho, Wyoming, and Utah.

That makes the company’s greenhouse gas footprint enormous.  Nearly 50 million tons of carbon dioxide, to be exact (based on EPA data for 2010).  That’s more than five times the amount of greenhouse gas emissions produced in Oregon in 2007.   Check out the table below.

Plant State Ownership Share (%) Total CO2 (tons)
Colstrip MT 7 1,311,327
Wyodak WY 100 3,199,281
Dave Johnston WY 100 5,992,189
Jim Bridger WY 66 10,743,842
Naughton WY 100 5,882,446
Hayden CO 17 700,187
Craig CO 19 2,041,915
Carbon UT 100 1,473,621
Hunter UT 85 8,349,312
Huntington UT 100 6,252,135
Cholla AZ 39 3,213,406
 TOTAL 49,159,661

What’s more, the company is a subsidiary of MidAmerican Holdings, which is owned by Warren Buffet’s Berkshire Hathaway.  Buffet’s connection to Pacificorp’s western coal shadow isn’t much of a surprise, but it is increasingly odd given recent statements he made supporting a major ramp up in renewable energy development.

Making matters worse, Pacificorp is fighting to keep its coal plants alive, even despite growing costs.  And that’s where the real rub comes into play.  It’s one thing to own or operate an old coal-fired power plant.  It’s another thing to fight to keep it open as long as possible, environmental impacts be damned.

See for yourself what Pacificorp’s coal shadow looks like, check out our Google map below for more information on the company’s coal-fired power plants, some of WildEarth Guardians’ efforts to confront these coal plants, and links to other helpful websites, like SourceWatch’s amazing database of coal and coal-related information.  This map is also on our Pacificorp Coal-fired Power Plant map page.

In the meantime, let’s not lose sight of the fact that the key to confronting greenhouse gas emissions in the West is to tackle Pacificorp.  Whether in Portland or in Denver, Wyoming or California, we can’t make meaningful progress to safeguard the climate without taking on this company’s coal.

Fair Market Secret (and Updated Powder River Basin Map)

On the heels of news that more than one billion tons of coal have been auctioned off from the Powder River Basin of Wyoming just in the last year, the Bureau of Land Management yesterday stunningly rejected a bid from Peabody Energy for one of the biggest coal leases ever to be offered.

The lease in question, called South Porcupine, would have added 400 million tons of coal to Peabody’s North Antelope Rochelle mine, the second largest in the U.S.

The reason for rejecting Peabody’s bid?  According to the Bureau of Land Management, their 90¢ per ton offer for the lease was below fair market value.

But what is fair market value?  Funny you should ask, because the fact is, we don’t know.

That’s because the Bureau of Land Management won’t tell us.  In fact, not only will they not tell us what fair market value is, they won’t even tell us how they calculate fair market value.

In a 2011 response to a Freedom of Information Act request from WildEarth Guardians asking for fair market value records for several coal leases that were already sold, the Agency refused to provide any documents.  Their reason?  Well, read for yourself:

In this case, the government is involved in a commercial endeavor and is statutorily required to ensure that it receives at least fair market value (FMV) for the coal being sold. We are withholding coal reservoir appraisal data, coal reservoir geological analysis data, and the FMV data that were derived from the appraisal and geological data. Disclosure of the referenced data could cause substantial harm to the competitive position of the government by creating an unfair or “gamed” bidding processt thereby suppressing the value of bids for pending sales, as well as in subsequent sales of adjacent lands.

The Agency went on to assert:

We are also withholding the information in these documents pursuant to exemption 5 because disclosure of this information could interfere with the deliberative process leading up to BLM’s final decisions on FMV estimates. The documents reveal BLM staff opinions and recommendations that are considered in development of the FMV estimate. Disclosure of that information could create confusion about the primary factors considered in FMV decisions and would have a chilling effect on the agency’s candid discussion of the various factors that influence the FMV estimates.

You can read the full response here (page 10 has their response on the fair market value data).  In other words, fair market value is secret and the process for calculating fair market value is secret.  If this sounds a bit odd, it’s because it is.

Because the Bureau of Land Management is basically claiming not only that it can’t release fair market value data for leases that have already been sold, but it can’t even release records that explain how fair market value is calculated.

It would be like an appraiser not only refusing to share with us the appraised value of our home, but also refusing to share with us the procedures for appraising our home.  That would be a huge problem, especially when it came time to, oh, I don’t know, sell our home.

Yet that’s exactly what’s going on here.  Because the coal being auctioned off in the Powder River Basin is owned by the federal government, which means it’s owned by us.  That means it’s supposed to be sold to make money for us.

Of course, how do we know we’re making money if we don’t even know the value of what we’re selling?

We don’t know.  And, unfortunately, we apparently can’t know because according to the Bureau of Land Management, the value of our public assets and the process for valuing those public assets, is secret.

While this may be convenient for the federal government, ultimately, it leaves the American public with little reason to believe that we’re actually recovering the full value of this coal.

As for all the Bureau of Land Management’s excuses about “substantial harm” to the competitive position of the government and the “chilling effect” of releasing fair market information, this all seems to be a ruse.

Although the Agency has a point that releasing fair market value data for pending leases could lead to rigged bidding (in fact, that’s exactly what happened in the late 70’s and early 80’s, read the declaration of economist Tom Sanzillo at page 18-22, which was filed in conjunction with WildEarth Guardians’ most recent lawsuit over coal leasing in the Powder River Basin), the fact is, it’s a rigged process already.  That’s because, for the most part, there is no bidding for Powder River Basin coal.  In the last 22 years, 27 coal leases have been sold and only five have had more than one bidder.  If that’s not rigged bidding in and of itself, then I don’t know what is.

Regardless, there should be no problem in releasing fair market value data for leases that have already been sold.  The only thing this data would ever “chill” is public concern over whether the government is doing its job.

So what is the Bureau of Land Management hiding?  Honestly, I think they’re hiding the fact that for years now, they’ve been offering Powder River Basin coal at bargain prices.

That’s not say they haven’t been selling the coal at fair market value.  It’s just that fair market value, in all reality, probably isn’t really, truly, actually fair market value.

Perhaps they’re waking up to this.  I hope so.  The South Porcupine coal lease threatens to lead to the release of more than 660 million metric tons of carbon dioxide.  According to the U.S. Environmental Protection Agency’s handy online greenhouse gas equivalency calculator, that’s equal to the annual emissions of 156 coal-fired power plants.

The Bureau of Land Management seems to be taking a newfound stand against artificially cheap coal and in turn, global warming.  Let’s hope this trend continues.

In the meantime, I challenge the Agency to come clean with its fair market value assessments.  Just like no reasonable homeowner would ever allow an appraiser to keep their appraisals secret, the American public has a right to know how the Bureau of Land Management is assessing our coal and what the value really is.

UPDATED MAP!

On other fronts, check out our updated interactive Powder River Basin coal map (view the larger map for easier navigation).  And if you’re into Google Earth, download this .kml file with more detailed data and learn more about this coal producing region.  The map is always available on our Powder River Basin map page.

More Gas Pains on the Climate Front

A new study slated to be published in the Journal of Geophysical Research reports that natural gas producers in the Denver-Julesberg Basin north of Denver are losing 4% of their gas to the air because of leaks and venting.

That lost gas is primarily methane (and a bit of other harmful pollutants, including volatile organic compounds, which contribute to Denver’s smog problem), which of course is not only a valuable product, but a potent greenhouse gas.

How potent?  It depends on the time frame.  Over a 20 year period, in other words the “short-term,” scientists report that methane has 105 times the heat trapping capacity of carbon dioxide.  In the “long-term,” or over 100 years, methane is 33 times more potent than carbon dioxide (this is because methane breaks down over time in the atmosphere, so after 100 years, is less potent).

So what does 4% mean in terms of actual greenhouse gas emissions?  Well, just looking  at Weld County, which is where the bulk of natural gas development has occurred in the Denver-Julesberg Basin, total production in 2011 was 212,958,693 thousand cubic feet according to the Colorado Oil and Gas Conservation Commission, most of it methane.

4% of 212,958,693 thousand cubic feet is 8,518,347 thousand cubic feet.   And using the Environmental Protection Agency’s handy online methane converter, we can calculate that 8,518,347 thousand cubic feet equals 361,689,000 pounds, or 180,840 tons.

Now, greenhouse gases are usually measured in metric tons.  So again, using EPA’s handy converter, we can calculate that 180,840 tons of methane equals 164,056 metric tons.  That means that just in Weld County, the heart of the Denver-Julesberg Basin, natural gas producers are losing 164,056 metric tons of methane annually.

From a greenhouse gas standpoint, 164,056 metric tons of methane has the same impact as 17,225,880 metric tons of carbon dioxide, at least when considered over a 20 year period.  Over a 100 year period, it would equal 5,413,848 metric tons of carbon dioxide.

Regardless of whether one looks at the 20-year or 100-year time-frame, that’s a lot of greenhouse gases.

According to another one of EPA’s handy online calculators, 17,225,880 metric tons of carbon dioxide is the same amount released annually by 3,377,624 passenger vehicles (check out the chart below).

In other words, losing 4% of all produced gas every year in the Denver-Julesberg Basin is like adding more than 3 million vehicles to the road.  That’s a potent punch to the climate.

Greenhouse gas emissions from natural gas production in Denver-Julesberg Basin and equivalent number of passenger vehicles.

Of course, this is based on natural gas production just in Weld County.  And, as the authors of this latest article point out, their estimates of lost gas don’t include “additional losses in the pipeline and distribution system.”

Is this an indictment of natural gas?  Certainly not.  But it continues to undermine its reputation as a cleaner alternative to coal, or a “bridge” to renewable energy.  It also emphasizes that the greenhouse gas footprint of this “cleaner” fuel may be stomping out the very progress we need to be making in the fight against global warming.

The Forest Service Still Doesn’t Care (An Update and Lament)

I wrote last week about the Forest Service’s less than friendly response to public comments over a proposal to expand coal mining into western Colorado’s Sunset Trail Roadless Area.

As an update, the Forest Service did post an “edited” version of its response to comments on its website.  Amazingly though, many of the same snarky responses are still there (see p. 160, for example, where the Forest Service still tells the hunter to go take a hike).

As far as an apology, however, it appears as if the public shouldn’t expect the Forest Service to offer that any time soon.  Although the agency was kind enough to apologize for the “confusion,” they only described their nasty responses as “regrettable,” but apparently not worthy of an apology.

So it goes for an agency that seems hellbent on catering to big coal companies throughout the American West.  Not only is the Forest Service bending over backward to sacrifice undeveloped National Forest lands in western Colorado for more coal mining, but now they’re also signing off on coal strip mining in the Thunder Basin National Grassland of Wyoming.

That’s why WildEarth Guardians, with the help of students at the the University of Colorado Law School Natural Resources Clinic, today filed suit against the Forest Service, challenging the “South Porcupine” coal lease.  This lease would facilitate the expansion of Peabody Energy’s North Antelope Rochelle Mine, one of the largest coal mines in the world, in turn sacrificing 2,000 acres of the Thunder Basin National Grassland and leading to more than 500 million tons of carbon dioxide.

That’s on top of the more than 11.3 billion tons of carbon dioxide threatened by pending coal leases in the Powder River Basin of Wyoming, which is where the Thunder Basin National Grassland is located.

And this from an agency that’s charged first and foremost with protecting public lands, not developing coal.

Insulting comments from the Forest Service are discouraging, but what’s more discouraging is an agency that puts the interests of coal companies ahead of our climate and our public lands.

100_3250Bear claw scratches on aspen in the Sunset Trail Roadless Area of Western Colorado.  Click here for more pictures of Sunset Trail.