Exporting Ideology: Anti-Coal Activists Open Second Front

Anti-coal activists are upset about the support being given the domestic coal industry by China and other Asian countries. Green groups would rather export their climate change ideology, but surely know that the government in Beijing actually cares very little about the Sierra Club.

By Richard Bornemann | June 26, 2013

It’s well known that that coal’s share of America’s electricity generation base has been under tremendous pressure from a squeeze play of forces. One is purely political, and based on an EPA climate change agenda that requires relentless contortions of the Clean Air Act never contemplated by Congress. The other is more market-oriented, based on today’s low natural gas prices, and predictions – against all experience – of stable and low prices for the foreseeable future.

So, where coal – as the cheapest resource – accounted for 50 percent of U.S. electricity generation as recently as 2005, its contribution has dropped steadily since, and even reached parity with gas – at about 32 percent each – for a time in the spring of 2012. With gas prices off their lows from last year, coal has re-crossed the 40 percent mark, but trends in the domestic market aren’t good. Some 34,000 megawatts of mostly coal-fired capacity are due to be retired by the end of 2016, according to a report by the Institute for Energy Research. And, to top it off, EPA regulation of CO2 emissions from existing plants has been all but promised by White House spokespeople.

It’s against the background of a grim domestic situation that coal exports have been a bright and solid pillar of support for the industry. Foreign customers of U.S. coal bought 55 million tons in 2007, and increased that by 130 percent to 126 million tons in 2012. Economic growth in Asian countries, chiefly China – the world’s biggest coal consumer – is driving three new terminal projects in Washington and Oregon. They’ll be the U.S. West Coast alternatives to British Columbia.

Two of the three projects are in Washington State. The Gateway Pacific project near Ferndale on the Puget Sound (already home to a BP refinery and an Alcoa aluminum smelter) is a venture of Seattle-based SSA Marine and St. Louis-based Peabody Energy, the world’s largest private sector coal company. A second Washington facility, on the Columbia River in Longview, is being developed by Millennium Bulk Terminals – a venture of Australia-based Ambre Energy and Arch Coal, the second largest producer in the U.S.

The Washington projects will handle rail shipments of over 100 million tons a year of low-sulfur Powder River Basin coal from Wyoming and Montana. A smaller third project – also Ambre’s – is proposed for the Port of Morrow on the Columbia River in Boardman, Oregon.

Anti-coal activists are upset about the support being given the domestic coal industry by China and other Asian countries. Green groups would rather export their climate change ideology, but surely know that the government in Beijing actually cares very little about the Sierra Club.

So, with economic growth as a tenet of faith in that part of the world, the Greens had banked on using the regulatory power of the U.S. Army Corps of Engineers as their export vehicle. The Corps was expected to use a very wide and “comprehensive” scope of its review responsibilities under the National Environmental Policy Act (NEPA). The Corps was expected to go beyond its mandate, to be another EPA.

The Corps has two primary responsibilities when it comes to port facilities: keeping navigable U.S. waterways unobstructed under the River and Harbors Act, and regulating the discharge of dredged or fill materials into waterways under the Clean Water Act. These two laws are the basis for the Corps’ NEPA reviews of the proposed coal terminals, and neither statute says a word about Chinese coal combustion or CO2 emissions.

This was the message delivered on June 18 to the House Energy and Commerce Subcommittee on Energy and Power by Jennifer Moyer, Acting Chief, Regulatory Program, of the Corps. She said that concerns about “rail traffic, coal mining, shipping coal outside U.S. waters, and the burning of coal overseas are outside of the Corps’ control and responsibility. [They’re] far too attenuated and distant from the proposed activities being evaluated by the Corps to be considered effects of the Corps’ permit actions . . .”

In that vein, the scope of the Environmental Impact Statements for the two Washington projects is going to stick closely to waterway matters under the Corps’ jurisdiction. (The Oregon project is getting a less burdensome Environmental Assessment, which could lead to a “Finding Of No Significant Impact.”)

That a federal regulator said “no” to them was a shock to Green groups, a disruption of their narrative that fossil fuels connect to every evil that can be shoehorned to fit under every agency’s jurisdiction.

Their champion during the June 18 hearing was Ranking Energy Committee Democrat Henry Waxman of California, who had no trouble finding his shoehorn. If navigable waterways are the objects of the Corps’ “control and responsibility,” then, surely, climate change has to top the list of concerns. After all, there is no greater threat to U.S. waterway navigation than climate change.

Wyoming coal burned in China will add to global warming, and cause droughts that can make the Mississippi River impassable. Coal shipped through Washington and Oregon will cause rising sea levels and the flooding of New Orleans. CO2 emissions from U.S. coal used in Asia will give us repeats of Superstorm Sandy – and those will surely impede navigation.

It’s a good day and a surprise when arguments like these fail in Washington. And, while the ideology that drives them has been terribly destructive to U.S. energy policy, it’s surely not yet ready for export.

Richard Bornemann has provided strategic legislative and regulatory counsel to American energy and surface transportation companies of all sizes for more than 20 years. He is an energy and environment analyst for the Selous Foundation for Public Policy Research, and author of American Energy Independence: A Policy Review 1973-2012. Mr. Bornemann is also a contributor to SFPPR News & Analysis.