EcoFlight
Donald Trump’s haphazard legal approach to revive the coal industry has so far been a failure. In the span of three weeks, federal courts have invalidated two of the most significant supply-side coal policies the administration put in place to prop up a coal industry that is otherwise losing out to cleaner, cheaper competitors like solar and wind energy.
Since the beginning, we’ve seen the Trump Administration pursue a litany of failed and backwards policies on almost every environmental issue we’re facing, from threats to clean water, clean air, and ensuring we maintain a reliable energy grid. Fortunately, our air, water, and health have been spared because of the Administration’s ethical and legal incompetence.
Shortly after taking office, President Trump and then-Secretary of Interior Ryan Zinke made two decisions that showed just how far this Administration would go to put the wishes of coal executives ahead of the interests of the American public. First, they nixed a common-sense fix to the exploitation of a loophole that allowed coal executives to cheat the American people out of hundreds of millions of dollars in annual royalty payments from the sale of tax-payer owned coal. Second, they abruptly lifted a temporary pause on new coal leasing that the Obama Administration had put in place the year before, and cancelled the first-ever comprehensive study of the climate and economic impacts of the federal coal program, which generates roughly 40 percent of the coal produced in the U.S.
In the span of the last 3 weeks, both of those attempted rollbacks were stopped in their tracks by federal judges, proving yet again that our institutions are strong enough to withstand a President whose corrupt policies harm the American people at turn after turn.
Here’s why these decisions matter.
COAL LEASING MORATORIUM
The Trump Administration’s second major attempt to boost coal production, which in 2018 hit a 39-year low, was to lift a “moratorium” on processing most new coal leases on public lands that was enacted so the Bureau of Land Management (“BLM”) could study the climate and economic impacts of leasing publicly-owned coal to corporations. But let’s back up.
First, most Americans don’t know that the public owns more than 500 million acres of federal mineral estates within our invaluable public lands, and that these account for approximately 40 percent of U.S. coal production. The BLM manages these resources for the public’s benefit, meaning that it could decide the climate and economic damages from mining and burning roughly 400 million tons of publicly owned coal every year simply aren’t worth the pittance the coal industry pays. But remarkably, BLM has NEVER studied the climate impacts of the federal coal leasing program as a whole, and it hasn’t updated its assessment of economic impacts since the 1970’s.
In 2016, President Obama told the nation it was time to “accelerate the transition away from old, dirtier energy sources. Rather than subsidize the past, we should invest in the future. Shortly after, then-Department of Interior Secretary Sally Jewell announced that BLM would conduct a comprehensive study of the climate and economic costs of using publicly-owned lands to mine for coal. And during that study, BLM would temporarily pause issuance of new coal leases so that it didn’t lock in leases that last for 20 years only to later discover they were shortchanging the American people.
15 months later, then-Secretary Zinke and President Trump abruptly lifted the moratorium and cancelled the study of environmental and economic impacts, without providing justification that’s legally required under the National Environmental Policy Act. And that brings us to the ruling.
Last week, the federal district court in Montana ruled that Secretary Zinke violated the law by refusing to disclose the environmental impacts of re-opening 570 million acres of public lands and minerals to fossil fuel leasing, as required by the National Environmental Policy Act (“NEPA”). Zinke’s Order brought together a large coalition of environmental groups, four states (California, New York, New Mexico, and Washington), and the Northern Cheyenne Tribe, all of which challenged the decision to end the coal leasing moratorium under NEPA. The ruling is a big win for those that care about climate change and public lands, and it’s another blow to the Trump Administration.
FOSSIL FUEL ROYALTIES
Most people have never heard of the Office of Natural Resources Revenue (“ONRR,” think “honor”). It is a little-known agency that is responsible for collecting money due to the government from coal, oil, and gas companies that mine and drill for publicly-owned minerals. For 30 years, ONRR’s rules required companies to pay royalties on those minerals based on the first point-of-sale. Coal companies exploited this rule by selling coal to subsidiaries at an artificially low price, paying royalties, and then having the subsidiary sell the coal for upwards of 10x the price without paying any additional royalty. This became a huge problem: a 2015 report by the Center for American Progress found that the five largest coal companies in the Powder River Basin had more than 500 subsidiaries through which they shipped and marketed coal from public lands. The Obama Administration closed this unintentional loophole by basing sales on the first “arms-length” transaction -- between two unrelated parties, which would protect the American public to the tune of roughly $85 million a year.
The Trump Administration blindly followed the wishes of coal companies and promptly repealed this common-sense fix, turning an unintentional loophole into a deliberate corporate handout. On March 29, 2019, Northern District of California Judge Saundra Brown Armstrong, appointed by George H.W. Bush, overturned the Trump rollback, holding that the Administration failed to provide a “reasoned explanation” for reversing course or for “disregarding facts and circumstances” that prompted ONRR to close the loophole in the first place. The court vacated the Trump-era rule, put the Obama-era rule back in place, and noted that because of “ONRR’s improper attempt” to repeal the rule, these protections for taxpayers are more than two years overdue.
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The Trump Administration is morally bankrupt, and its incompetence has so far been the saving grace for environmental protections. However, as the administration breaks ties with incompetent and reckless corporate shills like Ryan Zinke and Scott Pruitt, it has begun to learn from past mistakes and is appointing far more experienced corporate boosters like David Berhardt and Andrew Wheeler.
The recent court rulings offer sincere hope that our institutions and legal legacy can withstand the Trump Administration, but we cannot lose our resolve to keep fighting for the common sense environmental standards that keep us safe and protect our invaluable and finite natural resources.