The ambitious pro-coal plan of US presidential candidate Donald Trump has been on full display during this week’s Republican National Convention, but leave it to that pesky meddling EPA to put a damper on the party. On Tuesday, the same day that US Senator Shelley Moore Capito (R-WV) spoke to the convention in support of the coal industry, a federal court issued a ruling that upheld the EPA’s veto of the notorious Spruce No. 1 mine in her home state.
However, all is not lost. The Spruce decision may rile up Capito and other pro-coal Trump supporters, but it will help provide a competitive boost for Trump’s other favorite fossil sector, the natural gas fracking industry.
Coal Vs. Natural Gas Fracking
Industry analysts widely agree that coal consumption in the US has been declining in recent years, primarily because of competition from low cost natural gas for electricity generation. Renewable sources have been a far less significant factor, and they are only just beginning to weigh in more.
Low cost gas is a side effect of the domestic shale fracking boom, which was touched off by a loophole in environmental regulations created under the Bush Administration.
So, blame President Bush for the decline in domestic coal consumption. The loophole has crippled the Obama Administration’s efforts to bring the fracking industry under the regulatory umbrella of the EPA, and this lack of oversight has helped to keep gas costs down.
Longstanding federal restrictions on exporting natural gas have also played a role in the domestic gas glut, though the Obama Administration has made some cautious steps toward enabling more exports.
Coal supporters like Capito have been especially fond of nailing President Obama’s energy policies for the decline of coal in West Virginia and other states in the Appalachia region, but the fact is that Appalachian coal faces a triple whammy. In addition to new competition from natural gas for the domestic market, it also has to compete with coal from Wyoming’s Powder River basin, and compete globally with Australia and other coal-exporting countries.
Spruce No. 1 developer Arch Coal underscored this dynamic just last spring, when it issued a press release citing “near-term weakness in coal markets” among the factors leading it to abandon its pursuit of a new mining permit in the Powder River basin:
…given current conditions, Arch can no longer devote the time, capital and resources required to develop a coal mine on the Otter Creek reserve block. Arch remains committed to navigating a challenging market environment, executing upon its prudent capital allocation strategy and preserving liquidity…
In this context, we’re guessing that Arch is none too happy with Trump’s horn-tooting for fracking — especially now that rumors are swirling around the idea that “fracking mogul” Harold Hamm would be Energy Secretary under a Trump presidency.
The Spruce No. 1 Coal Mine
That brings us to Spruce No. 1. The proposed coal mine is a sprawling project in southern West Virginia that would have affected an area the size of downtown Pittsburgh. As a mountaintop removal project, it would involve literally blowing the tops off of mountains to expose shallow coal seams. The leftover rubble would be pushed aside to fill adjacent valleys and bury mountain streams.
As with fracking, mountaintop removal was not in common use until enabled by Bush-era policies, and the Obama Administration has been trying to play catchup ever since.
The West Virginia Gazette‘s Ken Ward provides a quick rundown of the Spruce No. 1 history leading up to the present. For those of you interested in the details, the long story is that one version of the project was proposed back in 1998, in the last years of the Clinton Administration.
Early in the Bush Administration, the EPA raised concerns and the project was consequently revised. The EPA continued to raise concerns, but in 2006 the US Army Corps of Engineers issued a permit over EPA’s objections (page 20, if you follow the link).
Environmental groups took legal action to stall the project until early in the Obama Administration. Citing a growing body of research on negative environmental impacts, in June 2009 the EPA joined with the Interior Department and the Corps of Engineers in a memorandum of understanding intended to reduce the impacts.
The EPA acted swiftly after that. By September 2009 it set the wheels in motion to invoke Clean Water Act protections for nearby streams affected by Spruce No. 1. That resulted in a 2011 determination that effectively quashed the project.
That put the legal ball in the hands of Arch Coal. The company appealed the EPA’s decision and lost its case in a lower court in 2014, so it took the matter up the ladder.
In Tuesday’s Spruce No. 1 ruling, the US Court of Appeals for the District of Columbia upheld the EPA’s determination and affirmed the agency’s authority to overrule permits issued by the Corps of Engineers.
So far both the EPA and Arch Coal have been mum on the decision. Based on the company’s concern over Powder River costs, though, we’re guessing that Arch will continue to press for Spruce No. 1.
Who Is Killing Coal Jobs In West Virginia?
Mountaintop removal is an unusually destructive mining practice that has been linked to birth defects and other ill effects in its host communities, but in bottom line terms it’s a winner because it cuts labor costs down to the bone.
In fact, the advent of labor-saving practices in the coal mining industry has been a root cause of coal job destruction in Appalachia for generations, with mountaintop removal being the latest iteration.
Perhaps as President, Donald Trump will have his Energy Secretary restore coal jobs by requiring the coal industry to return to pick-and-shovel days, though our money is on Secretary Hamm to play up natural gas at the expense of coal. Stay tuned.