Regs helped Wyo’s coal industry. Weakening them won’t save it.

It’s impossible to have an honest discussion about the future of coal in Wyoming until lawmakers stop blaming the so-called “war on coal” and strict federal regulations for the steady decline in mineral production and state revenues. 

Any serious examination of the issue needs to acknowledge the history of coal development in the state. That will clarify how many federal environmental laws and regulations have positively — not negatively — impacted an industry that has paid the freight for funding state government for decades.

Our federal and state representatives are not doing Wyoming citizens favors by attempting to cast the fate of coal in purely political terms that, far from merely shading the truth, totally eclipse it.

So let’s recap the history, and benefits, of coal-related regulations. 

First, Wyoming owes the very existence of its economic boom from developing the Powder River Basin’s abundant coal reserves to the federal Clean Air Act of 1970 and subsequent amendments to the law. These changes made the low-sulfur content of PRB coal extremely desirable to coal-fired power plants that were mandated to reduce pollution.

Wyoming’s vast coal reserves, easily accessible through surface mining compared to the underground mines of Appalachia, were suddenly on a level playing field. The federal government’s decision to deregulate the railroad industry gave PRB coal a further competitive advantage. By lowering transportation costs, coal could be moved cheaply from Wyoming to valuable Midwest and East Coast markets.

Federal regulations, of course, are also responsible for making mining considerably safer for workers. Injuries and deaths still occur too often in the state, but such incidents would likely happen at a much higher rate if safety regulations did not exist.

Federal and state reclamation laws, meanwhile, have helped ensure that companies restore lands impaired by coal mining activity to government-mandated levels. Responsible companies voluntarily comply with these laws for the public good. Unfortunately, others wield bankruptcies and loopholes that have allowed them to escape their social obligations to reclaim affected lands.

Environmental protection laws and regulations mandated by Congress in the ’70s and ’80s, meanwhile, have helped hold industry’s feet to the fire in other ways. They are responsible for improving air quality for humans and preventing companies from harming Wyoming’s precious wildlife and habitat. The state’s sage grouse management plan is a model of state and federal cooperation that ensures protection of the iconic bird while still allowing mineral development.

I get more than a little riled up when I hear officials at the state and federal levels blame stronger environmental regulations for ruining the coal industry’s profit-making abilities, closing mines and reducing high-paying jobs and state revenues. 

On the contrary, it’s these very laws that allowed the coal industry to flourish in Wyoming for so many years. While imperfect — and in need of continuous revisions to improve them — the last thing in the world they need is to be gutted, leaving industry to police itself. I would hate to see what the state’s environment would look like absent these legal protections.

Which brings us to the bogus “war on coal.” I’ve attended countless legislative meetings and heard many floor debates where lawmakers rail against the federal government for enacting laws that allegedly place a stranglehold on the development of coal and other minerals.

Wyoming’s congressional delegation has blamed regulations promulgated by former President Barack Obama’s administration for the recent string of coal-company bankruptcies. When Blackjewel LLC closed two of the largest mines in the country in the Powder River Basin last summer, our Republican U.S. Rep. Liz Cheney quickly lashed out.

“While the Trump administration has made great strides in reversing President Obama’s War on Coal, a number of factors including the far-reaching impact of regulations that unfairly penalize this industry are still causing pain in Wyoming,” she said.

Let’s make certain that Cheney’s revisions don’t become part of Wyoming’s real history: Obama’s Clean Coal Plan to combat climate change by requiring stronger emission standards was never even enacted. It was fought in the courts by industry and harangued to death by Republican politicians until Trump took over.

In his doomed-to-fail attempt to revive the coal industry and his repudiation of climate change as a “Chinese hoax,” Trump has set environmental protections back decades. He has also proposed severely weakening a major environmental regulation covering mercury, a toxic chemical emitted from coal-burning power plants.

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Other than blaming the feds, what have state legislators been doing to staunch the bleeding of coal’s decline?

Lawmakers this interim have been discussing ways to protect miners from losing their retirements and health insurance in the instance of bankruptcies. That’s a vital discussion that needs action during the budget session next February.

But I don’t see much else on the horizon that can ease the state’s transition. A $1 million coal marketing fund being floated by some conservative lawmakers would be available for the governor to respond to unspecified coal “emergencies.” In its current form the bill is so vague and likely underfunded as to be essentially useless.

Other lawmakers want the state to fund a lawsuit to force Washington state to allow a coal export terminal so Wyoming can ship its product to Asia. They seriously believe Wyoming has an inherent right to make other states gut their own environmental protections to keep coal companies here profitable.

Coal’s steep production decline  — from a high of 462 million tons in 2011 to 324 million tons last year — is the result of two major factors. The first is cheap natural gas obtained through the environmentally damaging process of fracking, which the government has unfortunately allowed. The second is even cheaper renewable resources like wind and solar power.

The Legislature has gone to absurd lengths to prop up the coal industry. Earlier this year lawmakers passed Senate File 159, which requires companies that want to convert coal-burning power plants to natural gas and renewables or close facilities early, to first make a “good-faith effort” to find buyers. The bill was approved unanimously in the Senate and passed 50-8 in the House.

What makes anyone think that companies buying coal-fired plants could run them any cheaper than the current owners? PacifiCorp’s Integrated Resource Plan would retire much of its fleet over the next two decades, dramatically reducing utility rates for Wyoming consumers.

But the new law would require PacifiCorp to purchase its power from the new owners, wiping out those rate reductions.

Rather than relying on the free market to determine the future of coal in the state, the Legislature — and Gov. Mark Gordon, who signed the bill into law — decided to regulate the industry by picking winners and losers. The degree to which ratepayers will be unduly punished will largely depend on the final regulations that guide the process, which will be determined by the Wyoming Public Service Commission.

Some lawmakers have actually proposed adding two legislators to the PSC. That’s their solution to keep coal afloat: further politicize the regulatory agency so the industry can supposedly recover, climate change and financial concerns be damned. 

Wyoming’s best interests are not served when its politicians remain bent on a course of ignoring history and claiming that strict governmental regulations have ruined the coal industry.

 Strong environmental regulations have helped keep it in business while significantly protecting the state, and those who championed them aren’t to blame for the industry’s failure to remain competitive.

This is one of six pieces in WyoFile’s “Re-regulation” special edition. Click the links below to read more:

‘Re-regulation’: Examining Wyoming’s response to coal’s decline

Old plants, new ideas: Who might buy a retired coal power unit?

The Wyoming PSC’s uncomfortable moment in the spotlight

Chasing coal-plant longevity, bills open door to deregulation

The great coal transition, an economist’s perspective