Enviro groups argue at appeals court against four Powder River Basin coal leases

WildEarth Guardians on Jan. 29 filed its opening brief at the U.S. Tenth Circuit Court of Appeals as it attempts to overturn a U.S. District Court ruling that rejected its claims about an environmental review for four federal coal leases in the Powder River Basin of Wyoming.

This is an appeal by WildEarth Guardians and the Sierra Club from the final order and judgment of the U.S. District Court for the District of Wyoming dated Aug. 17, 2015, which disposed of all of WildEarth’s claims against the U.S. Bureau of Land Management and the U.S. Forest Service. The notice of appeal in this case was filed in October 2015, with the Jan. 29 brief containing the environmental group’s first full legal arguments against that lower court ruling.

This appeal concerns the Bureau of Land Management’s (BLM) authorization in 2012 of the “Wright Area” leases, which allow the two largest coal mines in the country to mine an additional 2 billion tons of coal. Those are the neighboring Black Thunder mine of Arch Coal and the North Antelope Rochelle mine of Peabody Energy (NYSE: BTU).

The only issue in this appeal is whether BLM acted arbitrarily in assuming that issuance of these leases would have zero impact on the total amount of coal mined and burned in the United States, and thus on the total amount of carbon dioxide emitted from the U.S. electricity generating sector.

Together the leases would generate more than 2 billion tons of coal. If all 2 billion tons were burned to generate electricity, which BLM admitted was the likely result of the agency’s decision, it would release more than 3.3 billion tons of heat-trapping carbon dioxide into the atmosphere, said the brief. On an annual basis, the leases would dominate the U.S. marketplace by generating up to 230 million tons of coal per year in total from the two mines, it said. Although BLM quantified the amount of carbon dioxide that would result from mining and burning the Wright Area coal, and provided a general overview of the state of the science around climate change, the agency arbitrarily concluded that an equivalent amount of coal would be mined and burned regardless of whether BLM issued the leases, said the legal brief.

According to BLM, if it were to reject the Wright Area leases, coal from other mines would perfectly substitute for 100% of Wright Area coal in the marketplace. This assumption is contradicted by record evidence and has been rejected by the courts, the brief said. BLM based this assumption principally on introductory information contained in a U.S. Energy Information Administration (EIA) report that predicted a slight increase in coal demand over the next twenty years. EIA’s prediction that that coal demand may increase over time, however, does not logically lead to BLM’s conclusion that other coal is a perfect substitute for abundant and low-cost coal from the Powder River Basin, said the brief.

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 brief. A massive reduction in Powder River Basin supply would increase coal prices, as ‘substitute’ coal would be more expensive, thereby suppressing nationwide coal demand.

The North Antelope Rochelle and Black Thunder mines are the two largest coal mines in the country. Although there are more than 1,000 coal mines in the United States, on an annual basis these two mines currently produce more than 20% of the coal used to generate electricity in this country.

The Wright Area leases allow these mines to produce more than 2 billion tons of taxpayer-owned coal on about 16,000 acres of currently un-mined federal land, much of it located in the Thunder Basin National Grassland in the PRB. The North Porcupine and South Porcupine leases would allow the North Antelope Rochelle mine to produce around 95 million tons of coal per year for more than eleven years. The North Hilight and South Hilight leases would allow the Black Thunder mine to produce up to 135 million tons per year over about seven years.

The environmental groups are responding to an August 2015 decision by Judge Alan Johnson out of the U.S. District Court for the District of Wyoming in a case initially filed in 2012. The judge said that BLM did an adequate environmental review of the lease applications under the National Environmental Policy Act and that the leasing decisions were not “arbitrary, capricious or contrary to law.”

U.S. Mine Safety and Health Administration data shows that the Black Thunder mine produced 99.5 million tons in 2015 and 101 million tons in 2014. The North Antelope Rochelle mine produced 109.3 million tons in 2015 and 118 million tons in 2014.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.