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2015-8-6_WG_Keep_it_in_the_Ground_Report

Keep it in the GroundA Plan to Safeguard the Climate and End Miningof Our Publicly Owned CoalA Report by WildEarth GuardiansASSOCIATED PRESSAUGUST 2015PEABODY ENERGY


!MISSION STATEMENTWildEarth Guardians protects and restores the wildlife, wild places, wild rivers, and health of the American West.Inquiries about this report andWildEarth Guardians’ work can be made directly to:Jeremy NicholsClimate and Energy Program DirectorWildEarth Guardians1536 Wynkoop, Suite 310Denver, CO 80202303-­‐437-­‐7663jnichols@wildearthguardians.org©WildEarth Guardians. All rights reserved.


Responding to mountingcontroversy and scandal, theU.S. Department of the Interioris moving to reform the way itmanages publicly owned coal in theUnited States. As an initial step, theagency is holding a series of publiclistening sessions in Washington,D.C. and in the American West. 1It’s a welcome and refreshingacknowledgment of the need forbold change in the federal coalprogram.REFORMS MUST ADDRESSCLIMATE CRISISYet any reforms will be whollyinadequate unless and until theclimate implications of mining andburning more publicly owned coalDEPARTMENT OF THE INTERIOR2are confronted openly, aggressively,and effectively by the U.S. InteriorDepartment. As Secretary of theInterior, Sally Jewell, has remarked,there is a need to address how tomanage the federal coal programin a way that is consistent with ourneed to reduce carbon emissionsand combat climate change. 2Interior is now inviting theAmerican public to be a part ofan “honest conversation” aboutmodernizing the federal coalprogram. Honesty is important. Tothis end, any conversation must beanchored by the truthful reality thatmanaging federal coal consistentwith our climate objectives meansit will ultimately have to be kept inthe ground.[I]t’s time for an honestand open conversationabout modernizing thefederal coal program.—Sally Jewell,Secretary of theDepartment of the InteriorKEEPING IT IN THE GROUNDThe reasons for keeping coal inthe ground are all too clear. TheInterior Department overseesnearly a trillion tons of publiclyowned coal reserves in the lower 48United States, the vast majority inthe American West. 3 These reservesare the source of the majority ofall the coal mined and consumedin the U.S. In fiscal year 2014alone, more than 40% of all coalproduced in the nation came frompublicly owned reserves managed byInterior. 4Coal is mined for one reason,to be burned. And the burningof publicly owned coal producesmassive amounts of carbonpollution. All told, reports indicatethat 11% of all greenhouse gasemissions in the U.S. and 46% ofall carbon dioxide emissions fromcoal combustion can be traced backto the mining of publicly ownedcoal. 5 The link between the InteriorDepartment’s coal program andcarbon emissions has been describedas a massive “blind spot” of theObama Administration. 6Combating climate changemeans transitioning away fromfossil fuels, first and foremostcoal. Study after study has foundthat moving beyond coal is thesingle most important means oflimiting carbon emissions. Most


ecently, scientists concluded thatto meet modest climate targets, theUnited States must keep 95% ofits recoverable coal reserves in theground. 7AN URGENT NEED FORCHANGEIn spite of this, the InteriorDepartment continues to leaseand condone the mining of morepublicly owned coal. Since 2009,the agency has auctioned off morethan 2.2 billion tons of coal. 8 Thisincludes the sale of 40 million tonsjust in June of this year. 9And in what may be one of themost significant coal decisions evermade by the Interior Department,the agency proposed in May tomake more than 80 billion tons ofcoal available for leasing and miningjust in Montana and Wyoming. 10 Ifmined and burned, this coal standsto unleash more than 130 billiontons of carbon dioxide. 11The economic andenvironmental consequencesof more carbon emissions areundeniable. As the White HouseCarbon emissions from new mining plans in Montana and Wyoming would erasegains made by the Obama Administration's Clean Power Plan and would dwarfemissions from the Keystone XL Pipeline.has acknowledged, the devastatingimpacts of extreme weather, risingsea levels, and more threatenthe U.S. economy with billionsin losses, diminished nationalsecurity, public health risks, andsocial unrest. 12 Sally Jewell herselfhas pointed to the “economicimportance” of reducing carbonNOPPADOL PAOTHINGpollution to protect our publiclands, including our iconic NationalParks. 13Reports confirm that federalcoal production is costing theAmerican public nearly $80 billionannually because of carbon costs. 14These costs are based on socialcost of carbon estimates preparedby numerous federal agencies,including the U.S. EnvironmentalProtection Agency, Departmentof Agriculture, and Departmentof Energy. 15 According to theseestimates future carbon emissionswill cost even more than presentemissions, with estimates as highas $138 per metric ton of carbondioxide emissions by 2025. Thismeans more production meanscosts will mount, likely saddlingthe American public with trillionsof dollars of cumulative climateexpenses.Taken together, the U.S.Interior Department’s federal coal3


DENVER POSTprogram can no longer continueto condone and facilitate theextraction of more coal and theproduction of more carbon. It’stime for Sally Jewell and theDepartment to chart a deliberateand expeditious path toward endingthe program and keeping publiclyowned coal in the ground for good.MILESTONES FORSAFEGUARDING THE CLIMATETo set about this path on the rightfoot, the Interior Departmentshould move to adopt andimplement five key milestones:1. A moratorium on leasingpublicly owned coal. Interioris currently weighing whetherto lease billions of tons of newcoal. In the Powder River Basinof northeastern Wyoming, thelargest coal producing regionin the nation, the agency isconsidering offering six newcoal leases totaling more thantwo billion tons. 16 No reformswill be effective if Interiorcontinues to sell the rights tomine publicly owned coal andclose the door on options torein in coal production. In thepast, the Interior Departmenthas imposed moratoriums onleasing to address controversyand scandal around the federalcoal program. 17 Former InteriorDepartment officials have echoedthe call for a moratorium,including former Bureau of LandManagement Director, Jim Baca,and former Deputy Interior18, 19Secretary, David Hayes.2. Retiring existing coal leases.Federal coal leases that haveproduced in the past, but havenot produced coal in the pasttwo years should be terminatedby the U.S. Interior Department.The Interior Department shouldalso reject all pending preferenceright coal lease applications,or applications to lease landsunder permits issued prior to1976. Leasing conveys a rightto mine. It is incumbent uponInterior to ensure these rightsare relinquished so as to notincentivize companies to restartmining or otherwise use leasesas assets to game coal markets.The Interior Department hasthe authority to terminate leaseswhere continue operation isnot maintained pursuant to 43Whatever is mined isgoing to get burned,and whatever is burnedis going to go up intothe atmosphere andsomebody jolly well betterbe thinking about theimpacts.—U.S. District Court Judge R.Brooke Jackson]4


C.F.R. § 3483.2. Further, under43 C.F.R. § 3430.5, preferenceright coal lease applications canonly be approved where there arecommercial quantities of coal. 203. Recovering carbon costs.Interior should move within theyear to adopt and implement acarbon cost recovery program.Such a program should seek torecover funds sufficient to offsetthe cost of carbon emissionsresulting from burning publiclyowned coal, as estimated usingthe federal government’s socialcost of carbon protocol. 21 Suchcost recovery has been describedas imposing a “carbon adder”and has been endorsed by formerInterior Department officials. 224. Honestly report to theAmerican public. Interiorshould move to prepare ananalysis of the full amountPublicly Owned Coal Leases at a GlanceAccording to the U.S. Interior Department...• The agency manages 310 leases.• These leases total more than 470,000 acres in 10 states.• Of these leases, 74 are not associated with mines thatare currently producing.• There are 62 new leases pending approval totaling morethan 128,000 acres.• Peabody Energy owns 39 leases, more than any othercompany.• Arch Coal has more than 68,000 acres under lease, morethan any other company.of present and reasonablyforeseeable carbon emissionsassociated with the ongoingimplementation of the federalcoal program. Already, federalcourts have reprimanded theDepartment for ignoring theclimate impacts of coal mining. 23Such an analysis should beprepared pursuant to theNational Environmental PolicyAct and aim to shine a brightspotlight on the total carbonemissions that the Departmentis responsible for enabling.Such transparency is critical forbuilding public and politicalawareness and support for endingthe federal coal program.5. Help communities transition.The Interior Department canand must start to play a leadingrole in helping communitiesdependent on publicly ownedcoal transition to moresustainable and prosperouseconomies. The agency shouldwork to ensure that existingprograms, such as the POWERInitiative, are utilized to helpcoal communities transition. 24The Department should alsowork to secure authorizationto direct carbon cost recovery5


monies toward coal communitiesto facilitate economic planningand development. InteriorDepartment staff and expertiseshould also be made availableto communities to aid themtransition. As part of this, theagency should ensure thatreclamation of mines is a topeconomic development priorityfor communities. To this end,Interior must guarantee coalcompany clean up bonds aresufficient for full restoration ofland, water, wildlife, and cleanair. 25A NECESSARY PATH FORWARDThis approach to keeping it in theground will assure that companiesproducing from existing federal coalleases will able to continue mining,that jobs and communities willstay intact as a transition is made,The federal coal program is clearly no longer serving ournation’s economic or environmental interests. For the sake ofthe American taxpayer and the climate, it’s time for Interior tostart leading.that our electricity supply will notbe disrupted as the nation movesaway from coal, and that carbonemissions linked to publicly ownedcoal will begin to be meaningfullyreduced. Ultimately, this approachwill ensure that all publicly ownedcoal is fully kept in the ground overthe next 10-25 years.Keeping coal in the groundwon’t be easy, but it will be allthe more difficult to accomplishif the Interior Department doesnot commit to meeting these—Jim Baca, former Director of U.S. Interior Department’sBureau of Land Management]key milestones. Honest, careful,and deliberate planning are keyto ensuring that the federal coalprogram is brought to a timely endand in a manner that both fullysafeguards our climate, our energyneeds, and communities.It is time for an honest conversationabout how best to keep publiclyowned coal in the ground. And onlyby adhering to five milestones abovecan this conversation lead to theright path forward for our climateand our future.6


End Notes1. U.S. Bureau of Land Management, “Interior Announces Series of Public Listening Sessions on Federal Coal Program,” http://www.blm.gov/wo/st/en/info/newsroom/2015/july/nr_07_09_2015.html.2. U.S. Department of the Interior, “Sally Jewell Offers Vision for Balanced, Prosperous Energy Future,” http://www.doi.gov/news/pressreleases/secretary-jewell-offers-vision-for-balanced-prosperous-energy-future.cfm. In this speech, Sally Jewell commented, “How do we manage the [federalcoal] program in a way that is consistent with our climate change objectives?”3. U.S. Departments of Energy, Interior, and Agriculture, “Inventory of Assessed Federal Coal Resources and Restrictions to their Development”(August 2007), available online at http://www.law.indiana.edu/publicland/files/epact437_final_rpt.pdf. According to the report, there are anestimated 957,217,000,000 tons of federal coal reserves in the U.S.4. U.S. Energy Information Administration, “Sales of Fossil Fuels Produced from Federal and Indian Lands FY 2003-through FY 2014” (July 2015),available online at http://www.eia.gov/analysis/requests/federallands/pdf/eia-federallandsales.pdf.5. Stratus Consulting, “Greenhouse Gas Emissions from Fossil Fuels Produced from Federal Lands and Waters: an Update,” Final Report Prepared forThe Wilderness Society (Dec. 23, 2014), available online at http://wilderness.org/sites/default/files/Stratus-Report.pdf. According to the report, coalproduced from federal lands produced 769,155,909 metric tons of carbon dioxide equivalent, or CO 2 e. This represents 11% of the 6,673 millionmetric tons of U.S. greenhouse gas emissions reported in 2013 and 46% of all carbon dioxide from coal combustion. See U.S. EnvironmentalProtection Agency, “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2013” (April 15, 2015), available online at http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2015-Main-Text.pdf.6. The Wilderness Society, “A blind spot in the plan to reduce emissions is slowing progress in the fight against climate change,” http://wilderness.org/blog/blind-spot-plan-reduce-emissions-slowing-progress-fight-against-climate-change.7. Carrington, D., “Leave fossil fuels buried to prevent climate change, study says,” The Guardian (Jan. 7, 2015), http://www.theguardian.com/environment/2015/jan/07/much-worlds-fossil-fuel-reserve-must-stay-buried-prevent-climate-change-study-says.8. U.S. Bureau of Land Management, “Total Federal Coal Leases in Effect, Total Acres Under Lease, and Lease Sales by Fiscal Year Since 1990,” http://www.blm.gov/wo/st/en/prog/energy/coal_and_non-energy/coal_lease_table.html. According to this data, a total of 2.2 billion tons of coal wereleased in the states of Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming.9. U.S. Bureau of Land Management, “BLM Conducts Coal Lease Sale for Tract in Sanpete County,” http://www.blm.gov/ut/st/en/info/newsroom/2015/June/blm_conducts_coal.html.10. WildEarth Guardians, “Guardians Challenges Massive Mining Plans in Western U.S.,” http://www.wildearthguardians.org/site/News2?page=NewsArticle&id=11713&news_iv_ctrl=1182#.VbKA8mRViko.11. The Bureau of Land Management has used an emission factor of 1.659 metric tons of carbon dioxide for every ton of coal burned in Wyomingand Montana. See e.g., Wright Area Coal Leasing Final Environmental Impact Statement at 4-140, http://www.blm.gov/style/medialib/blm/wy/information/NEPA/hpdo/Wright-Coal/feis.Par.33083.File.dat/01WrightCoalVol1.pdf. Based on this, 80 billion tons of coal would produce morethan 130 billion tons of carbon dioxide when burned.12. White House, “Climate Change and President Obama’s Action Plan,” https://www.whitehouse.gov/climate-change.13. U.S. Department of the Interior, “Interior Department Releases Report Detailing $40 Billion of National Park Assets at Risk from Sea Level Rise,”http://www.doi.gov/news/pressreleases/interior-department-releases-report-detailing-40-billion-of-national-park-assets-at-risk-from-sea-level-rise.cfm.14. WildEarth Guardians, “Unaccounted Carbon Costs Pushing America into the Red” (July 22, 2014), available at http://www.wildearthguardians.org/site/DocServer/2014-7-22_Interior_Climate_Costs_Report.pdf?docID=14222.15. Interagency Working Group on Social Cost of Carbon, “Technical Support Document—Technical Update of the Social Cost of Carbon forRegulatory Impact Analysis Under Executive Order 12866,” available at https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-finaljuly-2015.pdf.16. U.S. Bureau of Land Management, “Powder River Basin Coal Leases by Application,” http://www.blm.gov/wy/st/en/programs/energy/Coal_Resources/PRB_Coal/lba_title.html. According to the agency, there are six pending coal leases just in the Powder River Basin of northeasternWyoming. Together, these leases amount to more than two billion tons.17. U.S. Bureau of Land Management, “History of the Coal Program,” http://www.blm.gov/wy/st/en/programs/energy/Coal_Resources/PRB_Coal/history.html. According to the agency, a moratorium on leasing was imposed in 1971.18. Baca, J., “Come clean on federal coal program,” Denver Post (July 21, 2015), http://www.denverpost.com/opinion/ci_28512622/come-cleanfederal-coal-program.19. Hayes, D., “The case for reforming the federal coal program,” The Hill (July 29, 2015), http://thehill.com/blogs/congress-blog/energyenvironment/249442-the-case-for-reforming-the-federal-coal-program.20. Given costs associated with carbon emissions, it is questionable, at best, whether extraction of current coal deposits is economically viable, andtherefore whether any deposits that are part of any preference right coal lease application could exist in commercial quantities.21. U.S. Environmental Protection Agency, “The Social Cost of Carbon,” http://www.epa.gov/climatechange/EPAactivities/economics/scc.html.22. Hayes, D., “The Real Cost of Coal,” The New York Times (March 24, 2015), http://www.nytimes.com/2015/03/24/opinion/the-real-cost-of-coal.html?_r=0.23. Associated Press, “Rulings require feds to consider carbon impacts of coal mines,” The New York Times (May 15, 2015), http://www.nytimes.com/aponline/2015/05/15/us/ap-us-coal-mines-climate.html.24. U.S. Economic Development Administration, “Power Implementation Grants Frequently Asked Questions,” http://www.eda.gov/power/faqimplementation.htm.25. Coal companies have been increasingly under fire for their inability to cover reclamation bonds. See e.g., Miller, J.W. and D. Frosch, “Coal minerspressed on cleanup costs,” The Wall Street Journal (July 17, 2015), http://www.wsj.com/articles/coal-miners-pressed-on-cleanup-costs-1437151107.7

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