POWDER RIVER BASIN — Standing ankle deep in a hill of powdery clay, chunks of rock and waste coal, Patrick “Rooster” Baumann, senior project manager for Cloud Peak Energy, can just make out equipment sitting on a ridge outside the boundaries of Antelope Mine near Wright.
He’s staring northeast, at the edge of the largest coal mine in the country, North Antelope Rochelle.
Beyond North Antelope lies the second largest surface mine in the U.S., Black Thunder. Invisible on a horizon of gray and beige, are 10 more mines. This is the heart of the U.S. coal industry, which provides fuel for about 30 percent of the country’s electricity.
On a recent September morning, Baumann watched as miners he oversees drilled holes packed with fertilizer that when mixed with diesel will turn into mini bombs. They will go off like a string of firecrackers beneath the soil, breaking it up so diggers can easily shovel away the loosened ground exposing coal seams beneath.
The two large mines that are Antelope’s northern neighbors, which account for nearly one quarter of U.S. coal production, are the subject of a once fierce leasing debate that has lost visibility in light of coal’s two-year downturn, its bankruptcies and its layoffs.
On Sept. 15, the Tenth Circuit Court in Denver ruled in favor of environmentalists and against the Bureau of Land Management. The court said that the BLM has failed to judge the climate change impact of four leases, two for Black Thunder, and two for North Antelope Rochelle. The agency had also misinterpreted the economic impact these leases would or would not have on the coal economy at large, according to the courts.
The leases were not rescinded. Operations have already begun on three of the four bits of land, but the court returned the case of the Wright Area Leases to a lower court in Cheyenne for subsequent action.
Environmentalists that took the matter to court, Sierra Club and WildEarth Guardians, say the ruling was an enormous victory, reflecting a trend of state and court decisions that give greater consideration to the environmental impacts of energy development.
For coal firms adapting to waning demand, the decision is concerning, a chance for environmental groups to push back on an industry already worried about a contracting market and a declining customer base. Last year, Wyoming produced 84 million tons of coal less than the year before. It lost nearly 500 workers in a single day in 2016.
But the state still sent nearly 300 million tons of rock to power plants across the country. For those who work on the muted landscape surrounding Antelope mine, the court decision is no more than a spec on the horizon.
“We are mining coal in the meantime,” said Travis Deti, director of the Wyoming Mining Association. “We are just going to wait and see what happens.”
A trend in decisions
“Maybe [the Trump Administration] will really want to embrace climate change and promote the warming of our planet ... They get to do that. But whether they like climate change or dislike it, they still have to be honest about the impact.” — Nat Shoaf, attorney for Sierra Club.
It’s been about five years since the Wright Area Leases were given the right to proceed, and BLM found there would be no significant impact to the coal economy or to the levels of carbon dioxide in the atmosphere.
The leases were meant to extend the life of Black Thunder by four years and North Antelope by nine years, and the federal agency acknowledged that if these mines dug up the coal and sold it to power plants to burn, it would result in 382 million tons of yearly carbon dioxide emissions, about 8 percent of the country’s total. But if the BLM did not allow extensions to the life of these mines, other mines would simply produce more coal.
The opposition convinced the Tenth Circuit otherwise.
“The agency has offered no evidence as to why it thinks it can take 20 percent of coal off the market, and have no impact on price or demand for coal,” said Nat Shoaf, attorney for Sierra Club.
The reason environmentalists see this as a win is that it forces federal agencies to consider the impact of fossil fuel emissions, so the public can at least know the long term effect of burning coal, he said.
It’s unclear what the court case will lead to, or what the lower court will tell the BLM to do. But the decision sets a precedent for environmental groups.
“You are seeing state regulators and courts step up and say that you cannot build a massive fossil fuel project and pretend that the impacts end at the property line,” said Caleb Heeringa, spokesman for Sierra Club, Beyond Coal. “There are upstream and downstream impacts, and impacts to the markets for energy.”
“The smart money will sit on the sidelines for a while.” — Clark Williams Derry, director of energy finance at Sightline Institute, a research group pushing for a move away from fossil fuels.
Months before the court decision on the Wright Area Leases, the BLM sent a letter to Arch’s subsidiary, Ark Land Company, noting that the firm had been granted three requests to delay the North Highlight sale since 2012. It’s the final of the Wright Area Leases to be sold. Each time the company has sought delay “due to continued economic slowdown that has kept downward pressure on projected coal demand.”
But the agency had to have a decision. Was Arch going to move forward?
“The BLM cannot continue to hold on to tracts indefinitely,” wrote Mary Jo Rugwell, state director of the BLM. “We must also consider that [environmental analysis] used to support the decision to offer this tract for sale continues to age.”
While the coal industry has changed since the BLM made its decision on the Wright Area Leases, the impact of the court decision is still unclear, even to the BLM.
“We do plan to move forward in processing the North Highlight tract for sale,” said Ashlie Fahrer, spokeswoman for the BLM in Wyoming. “At this time we are still in the process of analyzing our path forward with the NEPA in light of the recent 10th circuit court decision.”
Arch did not respond to multiple requests for comment on this story. But the BLM’s note about time’s passing highlights one of the curiosities of this court case.
Cloud Peak, the owner of the Antelope Mine, is seeking new lease options, but those are for expansions of existing assets. The company isn’t sticking its neck out given coal’s current climate.
The company spokesman Richard Reavey said in an email that brand new leases were unlikely at this time.
“Frankly, given the general poverty of the industry and prevailing market conditions, as well as the fact that such bids usually cost hundreds of millions of dollars, I don’t expect any of these types of leases in the near future,” he said in August.
Reavey declined to comment on how the BLM court case could impact Cloud Peak’s current or future leasing decisions.
A spokeswoman for Peabody downplayed the importance of the Tenth Circuit ruling on Peabody’s operations.
“The court has appropriately determined that mining operations can and should continue,” said Charlene Murdock in a statement. “We remain confident in the BLM’s ability to address the ‘fairly narrow’ issues identified by the court.”
“It’s going to be used as another hurdle to stall the process.” — Travis Deti, director of the Wyoming Mining Association, on environmentalists’ intention with the court case.
The Powder River Basin used to be an inland sea. The coal was once dead organic matter. It’s been packed together over millions of years, hardening and cooking beneath the pressure of the ground above it.
Back at the Antelope Mine, operations man Baumann, stood at the base of a canyon of clay, marveling at the expanse of coal beneath his feet. His pride in the mine, and in the industry at large, was palpable.
The climate always changes, he mused. Every coal miner works excavating the leftover of another time, a different climate, he said, quietly bucking the consensus that climate change, this time, is happening too fast.
What some in the coal community of Wyoming are concerned about is that the court decision will be used as “ammunition” from those who seek an end to the burning of fossil fuels.
“They came flat out and said they are going to use this decision to challenge every future lease,” said Deti, of the Mining Association. “It’s going to be used as another hurdle to stall the process and that sort of thing … The decision is out there, and it could cause some trouble down the line
There is a slight possibility that this case could be in conflict with other circuit court cases, making the Wright Area Leases a candidate for the Supreme Court, he said.
But the reality of a coal-dependent electricity mix, despite headwinds like plant closures and environmental regulations, is hard to ignore from the plains in Campbell County.
The industry simply needs new customers, whether in the U.S. or overseas, Deti said.
“It’s a simple fact of the matter that the industry is not going away and the use of coal is not going away,” he said.
Environmental groups like Sierra Club admit that an end of fossil fuel burning is their intention. And they believe they have made progress. The recent court case is evidence of the direction the country is going and the changing desires of customers for Wyoming’s resources.
“That is going to continue to happen,” said Heeringa, from the Sierra Club. “And Wyoming can recognize that and continue to produce the power that people want, or they can cling to what they’ve been doing in decades past.”
“It’s been good to me. I’m proud of it.” — Patrick “Rooster” Baumann, senior operations manager at Cloud Peak Energy
Political winds blow over Antelope mine, but the miners keep coming to work for their 12-hour shifts. There were no layoffs at Cloud Peak, though the firm’s earnings declined due to the coal depression in demand that drove down production.
The amount of coal dug from the ground this year is expected to be higher than 2016, which was a record-setting low. Some projections see coal hitting historic norms, near 400-million tons per year, before declining again. Others say the trend of power companies switching to other fuel sources is happening faster than projected. The growth of open market grids is allowing for more renewables competing with traditional sources of power like natural gas and coal. The number of factors swinging coal one way or the other is numerous, but no projections are rosy decades out.
On the reclaimed hills of Antelope, miners have made rock formations, standing out skeletal against the beige grasses. One structure was carefully laid out to resemble Stonehenge, a matter of pride among the employees tasked with the job.
Dead trees, too, have been planted on the hills, providing roosting perches for eagles and hawks. When they fall, they will be homes for jackrabbits and foxes. One day it will look like it did before the mines, said Baumann, the project manager.
He is two decades into his career in coal. He thinks the new administration in Washington will be good for industry, that Cloud Peak is a strong company and that technologies like carbon capture will help the industry stick around long term.
“I know there is a lot of controversy in coal, but, I still support it,” Baumann said. “I’m still proud of what we do.”
The chance of his industry going into serious decline is a far off specter. Coal is his life’s work, he said.
“It’s been a wonderful adventure.”
Follow energy reporter Heather Richards on Twitter @hroxaner