Obama’s Parting Shot at Coal Gives Streams Priority Over Mining

  • Protection rule takes effect days before Trump inauguration
  • Republicans vow to unwind latest threat to industry survival

President-elect Donald Trump’s vow to personally aid the coal industry just got a bit harder.

On Monday, the Obama administration released a last-minute environmental policy that foes say could be fatal to the industry’s most-efficient form of underground coal mining. The Interior Department’s stream protection rule, taking effect just days before Trump is inaugurated, could only be cut short by a Republican Congress whose anti-Obama to-do list is already piled high.

While proponents say the rule is designed to protect streams and groundwater from damage, industry champions led by Robert E. Murray insist its main target is longwall mining, a process that uses huge machines to cut coal from the earth in slices that can run for miles underground. The new regulations could be used to eliminate mining under any site where there’s so much as a “dry ditch” on the surface, Murray contends. 

"This unlawful and destructive rule is nothing but a thinly veiled attempt to destroy our nation’s underground coal mines and put our nation’s coal miners out of work," Murray, the chief executive officer of Murray Energy Corp., said in a statement Monday.

The rule is really just an update of regulations that have been around for 33 years. It will protect 6,000 miles of streams and 52,000 acres of forests primarily in Appalachia, according to an Interior Department statement on Monday. Proponents say it is designed to end practices that can permanently pollute streams and drinking water, requiring companies to restore streams once their mining work is complete and to monitor water quality.

‘Negligible Impact’

“Economic impacts were thoroughly analyzed and the final rule is projected to have a negligible impact on the coal industry overall,” according to the agency’s statement on Monday.

The National Mining Association disagrees. It estimates the regulation could prevent as much as 64 percent of U.S. coal reserves from being mined. In Illinois, longwall mining produced 32 million tons of coal in 2015, 57 percent of the state’s 56 million tons, according to Phil Gonet, president of the Illinois Coal Association.

The law comes as the U.S. coal industry is reeling. Coal accounted for just 32 percent of the U.S. power mix in September, down from over 50 percent in 2007, according to the Energy Information Administration. Over the 52 weeks ending Dec. 10, the U.S. produced just 730 million tons of coal, down from 1.2 billion tons in 2008.

The losses come as the result of a combination of factors. Tighter environmental regulation has increased coal’s cost to users at a time when cheap natural gas and clean renewable energies have surpassed the fuel as the country’s primary source of electricity generation. The latest environmental push, focusing on streams and groundwater, has the industry crying foul.

‘Dagger’ to Industry

“If you can’t get a mining permit, you can’t mine coal," Gonet said. "This was going to be the dagger to put the coal industry out of business."

Murray ranks Stream Protection as his company’s biggest foe, worse than the Environmental Protection Agency’s Clean Power Plan and the Interior Department’s moratorium on federal-coal leasing. His company, he said, has already prepared a lawsuit to block the regulation.

To be sure, Murray has acknowledged that repealing all three regulations won’t bring back new coal demand. Rather, he has said he hopes that eliminating them under Trump might slow the industry’s further deterioration.

The rule now joins a long list of Obama-era regulations that Republicans will seek to unwind after Trump takes office. Even before it was issued Monday, President-elect Trump vowed to rescind it, calling it "excessive." Senate Majority Leader Mitch McConnell of Kentucky also was critical, promising to introduce a resolution of disapproval under the Congressional Review Act to overturn the rule.

Exercise in Futility

"The decision by voters last month makes today’s announcement by the Office of Surface Mining an exercise in futility," said Shelley Moore Capito, a West Virginia Republican who serves on the Senate Energy and Natural Resources Committees.

Gonet, of the Illinois Coal Association, agrees. "They say the only sure things are death and taxes,” he said. “I’ll add a third thing -- this one’s dead on arrival."

Under the Congressional Review Act, lawmakers can vote to invalidate an agency ruling within 60 official legislative working days after it’s finalized. That said, Republicans will probably have to prioritize what they want to scale back, said Rob Barnett, an analyst at Bloomberg Intelligence. There’s the Affordable Care Act, the Dodd-Frank banking regulations and methane emission rules associated with drilling for oil and gas.

"The oil and gas guys will be pushing harder for using CRA on the methane rules," Barnett said.

Supporters of the stream protection rule, meanwhile, are concerned. "It’s not a perfect rule, but it’s a step in the right direction and doing something to overturn it would be a step backwards and a freebie for polluters and their supports in Congress," said Theo Spencer, a senior policy advocate at the Natural Resources Defense Council.


    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE