By Mead Gruver

May 19, 2016 - Emotions ran high in a showdown Tuesday between environmentalists and the mining industry over coal-leasing reform and whether the federal government should increase how much it charges corporations to mine federal reserves.

On one side, landowner advocates and environmentalists told a U.S. Bureau of Land Management public hearing that change is overdue — up to and including halting coal mining to limit climate change. Others in this coal-friendly city rejected any change to the leases amid a three-year federal leasing moratorium Interior Secretary Sally Jewell announced in January that has added uncertainty amid coal bankruptcies, layoffs and mine closures.

No justification exists for higher federal royalties, Cloud Peak Energy Vice President Richard Reavey said at a pro-coal rally held by the Wyoming Mining Association before the hearing.

“Here we are at another one of the secretary’s Soviet-style show trials, where the verdict has already has been decided and the sentence already issued. The verdict is that coal will be found to have been guilty of delivering reliable, affordable electricity. Guilty of providing well-paying jobs in flyover states that don’t support the Obama regime. Guilty of trying to make the American economy stronger,” Reavey said.

“And the sentence? The sentence is keep it in the ground,” he said.

Miners and others at the rally held signs that read “No New Electricity Tax!” and “Coal supports my family.”

The Bureau of Land Management’s hearing was the first of six planned at the outset of the moratorium. Any changes that result — likely hinging on who is elected president this fall — will have a big effect on whether the U.S. coal industry continues to coalesce around the huge surface mines of northeast Wyoming’s Powder River Basin.

More hearings are planned through June in Salt Lake City; Knoxville, Tennessee; Seattle; Grand Junction, Colorado; and Pittsburgh.

The vast challenges facing coal lately include low prices for natural gas but also federal regulations for coal-fired power plants to limit mercury and other substances that include the greenhouse gas carbon dioxide. Environmentalists have filed several lawsuits, with mixed results, to compel the federal government to consider climate change among the environmental effects of mining federal coal.

The moratorium is a rare opportunity to transition toward keeping coal in the ground, said Jeremy Nichols with the group WildEarth Guardians.

“It’s not easy. Coal has done a lot of good for this state. I don’t deny that, and I don’t think anybody denies that,” Nichols said at the hearing. “We support keeping it in the ground, but we support a just transition that will be part of that.”

Others, including Bob LeResche, chairman of the Powder River Basin Resource Council landowner group, struck a more moderate tone.

“The leasing system must be modernized and simplified to fit new market realities,” he said. “Interior must assess a fair return on the nation’s coal.”

The Bureau of Land Management set aside time during the hearing for Wyoming Gov. Matt Mead to call on the federal government to invest more in carbon-capture technology. Wyoming has pledged $15 million toward a carbon conversion research lab being built at a power plant near Gillette.

Federal regulators are dragging down the coal industry, Mead said.

“States like Wyoming, on the other hand, are striving to keep coal as part of America’s energy mix; find new processes, uses and markets for coal; and capture and create products with CO2,” Mead said.

Other state officials in Casper included state education superintendent Jillian Balow, who told the pro-coal rally she has reached out to the Wyoming Mining Association and Petroleum Association of Wyoming and is working behind the scenes to make sure Wyoming students hear about coal mining as well as carbon emissions.

“We have worked to make sure that we take away the rhetoric — the liberal rhetoric — around climate change and around output carbon emissions and make sure that our kids get a balanced approach to science,” Balow said.

Longstanding criticism of the federal leasing program includes how the coal industry, not the federal government, decides which federal coal tracts become available for leasing. Typically those tracts are next to existing mines, making it impractical for others to bid in a competitive process.

Federal coal-lease sales in Wyoming, which produces 40 percent of the nation’s coal, rarely attract multiple bidders. Companies almost always meet the Bureau of Land Management’s baseline bid requirements, determined in secret before the auctions, and win the lease. 

Federal coal leasing in the Powder River Basin has ground to a halt amid the industry’s recent downturn.