By Stuart Leavenworth

June 25, 2017 - Any day now, a federal appeals court in Denver is expected to rule on a case with major repercussions for coal mining on western public lands, one that could potentially affect other energy projects.

Depending on its decision, the 10th U.S. Circuit Court of Appeals could force the U.S. Interior Department to more extensively analyze how expansion of coal mining on federal land affects carbon emissions.

Or it could keep in place the Interior Department’s current method of reviewing new coal leases, which is supported by the mining industry but opposed by many environmental groups.

The court battle involves possible expansion of the nation’s two most productive coal mines, the North Antelope Rochelle mine and the Black Thunder mine, both of which sit on federal land in the Powder River Basin of northeast Wyoming. Together, these two mines account for nearly a quarter of all coal mined in the United States — 208 million tons in 2015, according to the U.S. Energy Information Administration.

“If we prevail, this is going to have a big impact in the way agencies look at climate change impacts,” said Nathaniel Shoaff, a staff attorney at the Sierra Club, one of two environmental groups that have challenged the mine expansions. Based on the court’s past handling of cases, he said he expects a ruling within the next two weeks.

Across the West, a range of environmental groups have filed lawsuits against mine expansions and new oil-and-gas leases sought by private industry and granted by the U.S. Bureau of Land Management, or BLM, and other agencies. The goal is to slow down these fossil fuel projects and also force federal agencies to more extensively evaluate the direct and indirect impact of their decisions on carbon emissions.

Under the National Environmental Policy Act, federal agencies are required to analyze the direct, indirect and cumulative impact of projects they are reviewing. In the current case, environmental groups — the Sierra Club and WildEarth Guardians, an organization that originated in New Mexico — argue that BLM erred in its analysis in approving expansions of the Wyoming mines.

BLM concluded that, even if it didn’t approve the mine expansions, the decision would have no impact on cumulative carbon emissions, because coal-fired power plants would simply secure coal from other sources.

Environmentalists disagree, arguing that a reduction in Powder River coal would boost prices of coal and coal-fired electricity, and prompt utilities to consider alternate sources of power, such as wind, solar or natural gas.

“As BLM explained throughout the record, Powder River Basin coal enjoys significant price advantages over coal from other regions, which is more expensive to mine,” said the environmental groups in a brief to the 10th Circuit. “A massive reduction in Powder River Basin supply here would increase coal prices.”

BLM officials are declining to comment on the case, pending the conclusion of the litigation. But in their own brief to the appeals court, agency lawyers argue that the environmental groups misstate how BLM came to its conclusions.

“The plaintiffs oversimplify the administrative record in an effort to make it seem that the BLM is either unaware of or willing to ignore basic principles of supply and demand,” the federal agency stated. “But this attempt at over-simplification does not withstand scrutiny.”

The Powder River Basin stretches about 120 miles from southeast Montana into Wyoming, and altogether accounts for 40 percent of U.S. coal production. Unlike coal mines in West Virginia and Pennsylvania, it produces a type of low-sulfur coal, attractive to utilities trying to reduce sulfur emissions. It is also extracted through mechanized surface mining on a vast scale, making it less expensive to produce than coal from underground mines in the Appalachians.

Yet sagging demand and unwise investments have hammered the industry. Arch Coal and Peabody Energy, owners of the Black Thunder and North Antelope-Rochelle mines, both filed for bankruptcy in last two years. Arch has undergone a restructuring and Peabody is preparing for one.

For a while, it appeared that demand for coal from China and Asia might help these companies find new markets for Powder River Basin coal. But China is reducing its dependence on coal, and is also limiting imports to protect its domestic industry.

Opposition has also mounted to coal export terminals on the West Coast. Last year, the U.S. Army Corps of Engineers rejected a coal terminal near Bellingham, Wash., ruling that it would abrogate the treaty rights of the Lummi Nation, a tribe that opposed the project.

Since Donald Trump took the White House, environmental groups have mounted multiple lawsuits against his early environmental decisions, but the case before the 10th Circuit is a carryover from the Obama administration.

Former President Barack Obama embraced the Paris climate agreement and, late in his tenure, implemented a moratorium on new federal coal leases, which Mr. Trump has reversed. Despite Mr. Obama’s public rhetoric about climate change, his Interior Department continued to approve new coal mining leases on public land, and his Justice Department aggressively defended those decisions, joined by the National Mining Association and other mining interests.

Last year, a federal judge in Wyoming ruled in favor of the federal government in the current case, “WildEarth Guardians et al. v. U.S. Bureau of Land Management et tal.” The Sierra Club’s Mr. Shoaff said his side is hopeful of a different decision from the appeals court, based on the judges’ questioning during oral arguments.

Depending on how the 10th Circuit rules, its decision could prompt more extensive climate analysis of other energy projects proposed for federal government lands, he added.

“That’s true of oil, and also true of natural gas projects,” said Mr. Shoaff. “It could also have a big impact on projects like coal export terminals.”