Supreme Court Battle Looming Over Lucrative Clean-burning Coal Exports to Asian Markets
As any mining professional can tell you, mineral resources must be taken where they’re found. But in today’s mining industry, sitting on lucrative rich deposits is no guarantee that those resources will be able to find their way to high-demand markets. Especially if that resource is coal, the designated pariah of the environmentally sensitive.
In an all too familiar strategy, Washington state has blocked access to what a report at mining.com calls “the last major coal export project on the West Coast”.
That project is the proposed Longview coal export terminal in Washington state at the mouth of the Columbia River, a vital artery for moving some of the world’s cleanest burning thermal coal to hungry Asian markets. The Washington Department of Natural Resources is playing the environmental card by refusing to permit construction of the Millennium bulk terminal plant on the grounds that it “failed to meet water quality and other environmental standards”.
Wyoming Governor Mark Gordon joined forces with Montana to open the vital gateway from the coal-rich Powder River Basin located in northeast Wyoming and southeast Montana where 47% of the US coal supply is produced. All of the coal produced in Wyoming is thermal, the cleanest burning grade for reducing emissions from power plants where coal is relied upon to stabilize power grids and raise the standard of living in emerging countries.
With 65% of Wyoming’s state budget funded by returns from coal, oil, and gas, Governor Gordon isn’t pulling any punches to remove the roadblock as quickly as possible. Hoping to bypass lower federal courts, Wyoming and Montana are taking on Washington state with a rarely used “original jurisdiction provision” that would allow the Supreme Court to hear the case without delays caused by prior review in lower courts.
Feeling the Decline of Coal in the Powder River Basin (PBR)
The Powder River Basin (PBR) mining operations actually lead the way in the westward expansion of the coal industry, ironically as the result of a more rigorous Clean Air Act in the 1970s. Unlike traditional coal sources in the Appalachians, the low-sulfur content in Wyoming and Montana coal made it a favorite of US coal-burning power companies required to comply with the new stringent air quality laws. The high-quality thermal coal from the PBR delayed the onset of the coal crisis that disrupted the industry back in the east where coal with higher-energy but higher sulfur content quickly fell from favor. The Powder River Basin was able to avoid the closures that decimated mining operations in the Appalachians.
But the reprieve for the coal industry in the PBR was not to last. Today fracking has unleashed fierce competition with cheap natural gas and wind power is grabbing huge chunks of market share in the vast territories of the Great Plains. In 2018, US power companies consumed just 687 million tons of coal, the lowest number since 1978. As US coal-burning for power declines coal production in the PBR has dropped from 462 million tons in 2011 to 324 million tons in 2019 according to the Energy Transitions report at E&E News.
With well over 5,000 jobs at stake just in Wyoming’s coal industry, the booming Asian demand in 2020 could revitalize the troubled sector where 3 out of 4 of the PBR’s largest producers had to declare bankruptcy in 2015-2016. With easy access to Asian markets, 20-year lows in production and worst-case scenarios where 450 to 600 mining jobs are lost in a single day can be avoided, while providing the cleanest-burning low sulfur coal to developing countries determined to burn coal of any grade to support increasing populations and higher standards of living.
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