Zinke pushes to end coal lease suspension, empower communities

Helena Independent Record June 16, 2016   By Tom Lutey For the Independent Record
BILLINGS – State and tribal governments deserve a bigger say in federal coal policies, U.S. Rep. Ryan Zinke said Tuesday, while seeking to overturn a temporary ban on coal leases.  

Montana’s lone Congressman told the House Natural Resources Subcommittee on Energy and Mineral Resources that the federal decision suspending coal leasing earlier this year was hurting state and tribal economies.  Leasing was suspended in January by Department of Interior, which contends the public isn’t getting a fair royalty price for its coal.  The department estimates there’s a 20-year coal supply available without new leases.  It’s expected to take several years to establish a more equitable royalty rate, Interior estimates.

To undo the suspension, Zinke has proposed the “Certainty for States and Tribes Act.”  In addition to ending the suspension, the bill directs the Secretary of Interior to re-establish a royalty policy committee from which state, tribal and energy interests consult the department.  A state would need to have $10 million in leasing royalties annually to be considered for the committee.

“This administration seems to be waging a war on coal specifically, and other natural resources, fossil fuels, and we’ve seen how hard hit Montana is as a result,” Zinke said.

Zinke cited the loss of research databases at Montana school libraries because of declining coal revenue.  In Mussellshell County, commissioners are preparing for a $300,000 shortfall because of slumping coal taxes and the local school district is faced with paying for a $9.8 million construction bond as its largest taxpayer falters.

The Crow Tribe has cited lost coal revenue at its southeast Montana mine for a multimillion deficit in the tribal budget.  Quarterly payments from the Absaloka Mine, operated by Westmoreland Coal Company, were off $1.2 million in 2015.  The tribal government furloughed a quarter of its workers in January as a result.

“For the Crow, there are treaties, the treaties specifically state the United States will not interfere with their manifest destiny if they choose to mine their coal,” Zinke said.  “The problem is, we’re getting in the way of a treaty. Either Indian tribes are sovereign or they’re not.”

Rep. Alan Lowenthal D-Calif., questioned the bill’s merits, both for reinstating coal leasing before Interior official determine a more lucrative royalty rate for public coal, and for seeming to allow states, tribes and coal companies a committee from which to override federal policy.

“This legislation would make the committee effectively stop a regulation in its tracks if it estimates there will be negative economic impact.  As far as the Congressional Research Service can tell, this is unprecedented,” Lowenthal said.  “It’s very possible this provision could block critical health, safety, or environmental regulations.”

But the undoing of Interior’s suspension of coal leasing was Lowenthal’s biggest concern.  He said 1.8 billion tons of coal would again be eligible for lease at royalty rates Interior estimates have cost the public billions of dollars.

Mark Squillace, a professor of natural resources law at the University of Colorado Law School, said state and federal losses under-calculated coal royalties exceed $28 billion.  Leasing more coal before adjusting the royalty rate, something the government hasn’t done in 30 years, just compounds the public’s loss, he said.  “We ought to recognize that coal is in decline,” Squillace said.  ” We need to manage that decline in a responsible way that can help coal-dependent communities transition away from coal.”

The professor’s remarks didn’t sit well with Jillian Ballow, Wyoming’s superintendent of public instruction, who had minutes earlier praised Wyoming coal revenue for financing 100 school construction and remodeling projects in her state since 2003. Coal revenues also cover roughly a third of Wyoming’s state budget, she said.  “This bill is really a responsible way for states, tribes and the federal government to engage so that all Americans can benefit.”

Earlier this year, Wyoming braced for a 9 percent hit to its state general fund because of a crashing coal industry.  Gov. Mike Mead, a Republican, estimated the state would need to cut $300 million or more over the next two years because of souring coal markets.

Mike Johnson, a union representative from Montana, told the subcommittee that federal management of public lands had cost him his job at a Missoula paper mill, apparently because of federal logging contracts, and now threatened his livelihood in Eastern Montana, where Colstrip miners and power plant workers were bracing for an unwelcome transition out of the coal economy.  The power plant at the heart of the community is challenged by energy market prices driven down by natural gas, and climate change-cautious customers in the Pacific Northwest who no longer want coal power.  Additionally, there are tougher federal pollution standards on the horizon that could shutter the older portions of Colstrip power plant built in the 1970s.

“These people have lived there for generations and generations.  They don’t want to have to relocate,” Johnson said.  “Most of them, the average age of coal miners is about 55 years old, they’re too old to retrain and start a new career.  They’re too young to retire.  It’s a very, very hard situation to have your life turned around like that.”

The subcommittee expects to mark up Zinke’s bill by month’s end.