LaGreca: Colorado kicked in the shin by coal industry (column)
June 25, 2016
Even with the cushion of twenty-years worth of coal reserves already under lease, I was still kicked in the shin and verbally assaulted yesterday on my way out of a public meeting in Grand Junction to review future coal leasing on federal lands. In the style of the NRA at events concerning any limitations on gun control, the "Coal Forever" lobby was unmistakably present, sporting an overwhelming, yellow-shirted tide of support for this carbonized plant matter.
The Obama administration issued a moratorium on new coal leases on federal lands in January to evaluate a program that has been all but untouched since the Reagan era. In this time, the formulas for establishing royalties to tax payers have been distorted, while the bidding process for leases has become opaque and noncompetitive. Since 2010, our reliance on coal has dropped from 44 percent of our electricity generation to just 29 percent, in large part due to cheap natural gas and decreasing international demand. Coal has annually become a less important component of our energy mix, yet it remained in the protected graces of the untouchable fossil fuel giants, that is, until this moratorium.
The BLM's stated purpose for conducting this periodic review is to ensure that the public gets a fair return from the private companies extracting the publicaly owned resource. The "fair return" designation is meant to evaluate whether or not the effective 4.9-percent rate paid to the Office of Natural Resources Revenue (ONRR) is sufficient to account for the health, climate and ecological externalities inherent to coal production. Though the legally-mandated royalty rates are between two and three times as high, the system of payouts is convoluted, leading to economic calculations which seriously under compensate the public for the damages caused by mining coal.
Among the 140 speakers on the docket at this event were Western Slope county commissioners, seeming to speak directly off of talking points written by the coal lobby. We first learned from a Mesa County commissioner, who was himself wearing a bright yellow shirt emblazoned with "COAL: Reliable, affordable, proven, abundant," that regulations and obstructions by NGOs were keeping the "cleanest coal in the country" from eliminating poverty in the region. We were next informed by a Montrose County commissioner's scientific exclamation that, "If environmentalists really cared about climate change they would put out all of the fires in the west." Not withstanding the 2009 article in the journal "Science" finding in contrast to this commissioner's claim that forest fires globally represent just shy of half the CO2 emissions from fossil fuels annually, the environmental speakers and industry advocates seemed to be speaking of parallel, yet different scientific realities.
In fact, the water and outdoor recreation of certain public lands have been valued higher than the minerals underground.
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Perhaps what was missing from the ire aimed at myself and others not wearing yellow yesterday, was any mention of culpability of the Peabody Coal and other companies for the harm to communities precipitated by layoffs to mineworkers. First, the process of mechanization necessitates fewer workers to perform the same tasks. Second, the hyperinflation of CEO salaries, coinciding with declining revenues, provides less money for the payrolls of employees. Logically, the salary of failing companies' CEOs should go down with the sinking ship. Between 2010 and 2014 however, executive bonuses and salaries increased an average of 8 percent, all the while the combined share prices plummeted 58 percent. It is clear that the Obama administration's Clean Power Plan has coal power plants squarely in its sights for shut down; however, the coal industry's campaign of blame for its worker's misfortunes is disingenuous at best.
The decline of the coal industry follows lock step behind the boom-to-bust cycles of extractive industries in the west over the past 150 years. Starting with hard rock mining, followed by uranium mining, and shale oil, small towns have begun to feel the burn from yet another extractive industry presented as eternally viable in its heyday. The transition is clearly under way in Colorado towards a recreation-centric economy, with over $13 billion in annual spending due to this industry. In fact, the water and outdoor recreation of certain public lands have been valued higher than the minerals underground. Not immune to economic cycles itself, but highly resilient to volatile international circumstances, outdoor recreation is a more stable investment for the BLM and for local economies today than coal.
After tax payers foot the bill for clean up of derelict mines and pay for assistance for countless workers laid off by indifferent coal companies, maintaining the current coal leasing program is not only illogical, it is economically irresponsible. As a former Telluride mayor suggested, BLM needs to establish a creative royalty plan to help coal communities suffering from the unstoppable decline of the once king, coal. The misguided animosity from the coal industry and its workers might find a clearer course forward by looking back at the generations of booms and busts before them. Unless the moratorium is lifted, the coal industry has twenty years to find its way into the modern economy before its leases run out. Coal executives, however, may only have this three-year BLM review period to fulfill grand promises to the communities and to the workforce they continues to lay off, before the CEOs start getting kicked on their way out the door.
David LaGreca is an independent environmental consultant, mountaineer and conservation writer, working in the outdoor industry in Colorado's Western Slope. He lives in Dillon.
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