The War on Coal Continues (The Revolution Was Not Televised)

Pennsylvanians were bombarded with the rhetoric of our age in 2016, much like voters in Indiana, Kentucky, West Virginia, and Wyoming: the ‘war on coal’ will be over! A Trump Administration will mean the end of ‘job-killing regulations.’ Businesses like coal will flourish again. But you’d be hard pressed to find any evidence of that in the budget they dropped this month, in any of the many executive orders they’ve published, or, indeed, in anything they’ve announced since the election. Indeed, as coal giants like Peabody shed massive legacy debts (including many miners’ pensions) through their bankruptcies and bide their time, all indications are that the ‘war on coal’ has simply entered a new phase—miners and their communities notwithstanding. In short, there’s not a damned thing the Trump Administration will do about it. This post explains why.
 
Cheap Natural Gas, Brought to You By . . . No ‘Job-Killing Regulations’

When the Obama Administration finalized the first-ever restrictions on new natural gas wells’ methane emissions in June 2016, it marked a turning point in the history of shale gas development since the hydro-fracturing revolution began a decade ago. For it was that (relatively lax) Clean Air Act rule regulating methane as a greenhouse gas from fracked wells which, for the first time, subjected such operations to the typical “media” pollution statutes that have come to define America’s basic environmental playbook. Before that, fracking had been getting a free pass—and profits in gas production showed as much. The Safe Drinking Water Act had never applied to well fracking. It was specifically and quietly cut through by the ‘Halliburton Amendment’ back in 2005 which barred application of that statute’s basic underground well injection standards to fracking.

The Clean Water Act generally excludes ground water from its protections and, thus, well fracking that happens to toxify underground aquifers was largely invisible to it. Finally, the Resource Conservation and Recovery Act’s Subtitle C standards for safe disposal of hazardous wastes exempts oil and gas well development and production (so-called E&P) wastes.

Indeed, the Clean Air Act, which for over forty years has regulated the emission of hazards like sulfur dioxide, volatile organic compounds and other conventional air pollutants (many of which the average fracked well spews into the air), is implemented by way of state plans derived from computer-modeled emissions factors. And those models, hard to calibrate and even harder to update on the fly, never built in the expected well-related emissions in places like Bradford, Susquehanna and Washington counties—never calculated what all the other emissions of those pollutants plus fracking’s contributions would mean for local air quality. As those models improved and fracking’s contributions became less invisible to the state’s clean air implementation plan, serious problems began to emerge.

Then the June 2016 rule on methane emissions at wells went final. In truth, the methane standards were (and remain) relatively easy to meet. But that is the point. Coal’s loss of market share to cheap natural gas over the last decade has been due in no small part to gas’s free (environmental) pass. While coal mining’s technological evolution from pick and shovel to ‘mountain top removal’ has placed it squarely at odds with anyone who likes mountains, cheap natural gas combined cycle (NGCC) units which burn cheap-to-produce shale gas have made it the market leader. Gas sets the market price per megawatt—and Donald Trump isn’t going to do anything about that. Is Scott Pruitt’s EPA going to ratchet down on fracked wells’ SO2 or VOC emissions? The first thing he did as Administrator was to withdraw the information collection aimed the Obama EPA had issued to existing wells and their emissions.

Stone Ages Don’t End Because Stones Grow Scarce

Fossil fuel development is known to historians of the oil age as the ‘resource curse.’ Petro-states like Venezuela, Saudi Arabia, Nigeria, Libya, or Kazakhstan all thought they were in the business of economic development. They all viewed the mining, production, and sale of the oil as an economic stepping stone: a way to clothe, educate, shelter and enrich their people, supporting the institutions of civil society that would eventually become the economic engine when the oil ran out. They all imagined themselves transitioning to a fate like Norway’s: oil wealth subsidizing a high standard of living for all without dominating and polluting the wider political economy (like how much to spend on education, health, environment, etc.). Yet none of them succeeded. Indeed, they’ve grown poorer as most of the economic value of the resource production was added elsewhere—or simply spirited out of the jurisdiction. The highest paid workers were and are imported and leave when their job is done. The technological know-how involved flows quickly to the next payday. Of course, that toxic hole in the ground stays where it was dug—like the fish kills in the local rivers. Depleted or poisoned aquifers stay put. The lung cancers stay local and the animosities engendered by the have/have not economy worsen. The good news is corporate dividends enrich the investors regardless.

When Secretary of the Interior Sally Jewell announced her “pause” on new federal coal leases (mostly in Wyoming) in January 2016, 20+ years of reserves under existing contracts kept producing. But the report that Jewell somehow got together before leaving office this January painted a grim picture: 42% of the nation’s thermal (i.e., electricity generating) coal comes from federal lands and most of that is tied up in no-bid contracts, undervalued leases, and deals nobody understands. What was also clear is that coal is no longer the energy bargain it once was. With renewables quickly falling in price-per-kilowatt hour, their grid-competitiveness is a surer bet than coal’s.

Voters in America’s coal states had to have known in the back of their minds that the ‘war on coal’ wasn’t going to be over. They didn’t think they had the inside track to becoming the next Norway. But I wonder how many figured out that the defense of coal as an energy source today is rather like fighting to keep losing. With so many other, better possibilities in the global marketplace, coal energy will be able to compete only where corners are cut, environmental, health and safety precautions are ignored, or legacy debts are written off. That’s not greatness. It’s stone cold madness.