Wyoming and five other states say Washington is violating the Constitution by barring a coal export terminal on the West Coast.
The states filed a joint amicus brief Tuesday to act as a “friend of the court,” on behalf of Lighthouse Resources’ proposed Millennium Bulk Terminals.
The export terminal would provide Powder River Basin coal a faster, cheaper trip to Asia, but Lighthouse has struggled for six years to secure the right to build along the Columbia River given some environmental concerns by state regulators.
Supporters of the port, including the states that filed the amicus brief Tuesday, argue that Washington is not weighing the coal terminal on its own merits, but acting out of an anti-coal sentiment.
“The defendants are trying to force on other states their policy preferences regarding the use of coal as a source of fuel, and thus, they are impeding the free flow of commerce,” the brief states.
In January, Lighthouse, which owns the Black Butte mine in Wyoming, filed suit against Washington Gov. Jay Inslee and two other state officials for withholding permits for its proposed port.
The desire to sell Wyoming coal to Asia has increased in recent years. Though the regulatory battle over Millennium Bulk has dimmed immediate hopes of reaching overseas markets, diminishing coal demand nationally has raised the stakes on the future of Powder River Basin coal.
Wyoming’s Attorney General Peter Michael said the state of Washington’s actions threaten Wyoming’s economic gain.
“(Gov. Matt) Mead and I believe that this case has broad implications for the export of commodities that are important to the economies and people of many states,” he said in a statement Wednesday. “Our federal system depends on evenhanded access to markets, and we are participating to vindicate Wyoming’s right to engage in interstate and international trade.”
In the joint amicus brief, Seattle law firm Bullivant, Houser, Bailey said Wyoming has received nearly $4.89 billion from its coal taxes since 2007. The filing also notes the steps Wyoming has taken to establish economic ties to potential coal markets in Asia, including the memorandum of understanding that Mead recently signed with Japan’s coal industry group, JCOAL.
Currently, Wyoming coal does not make it to Asia. Cloud Peak Energy, a Gillette-based firm, does have contracts overseas but sends coal from its Montana mine, Spring Creek, up to a Canadian port.
Despite economic barriers that currently keep Wyoming coal from Asia, Washington’s stance irks the fossil fuel-loving state.
Rep. Chuck Gray, R-Casper, proposed a bill during the legislative session that would have set aside $250,000 to hire a private lawyer to sue Washington. Gray told the Star-Tribune at the time that in the absence of legal action from Wyoming’s attorney general, the state Legislature should act to save jobs and revenue offered by exports.
“The attorney general has not taken action and unfortunately, we do not elect the attorney general,” Gray said in an email Feb. 12. “In these situations, the legislature needs to consider whether to take legal action itself.”
Gray’s bill failed introduction. He said he was pleased by the state's action in an email Wednesday, but that Wyoming should take a more aggressive step.
"Filing a lawsuit in federal court will ultimately give us the best chance of a good result," Gray said. "We need to continue following this."
Gray also said he believed his bill prodded the attorney general to take the issue seriously.
The governor’s policy advisor, Mike McGrady, said Mead made the decision to participate in Lighthouse’s lawsuit before Gray's bill and before the legislative session began.
When asked why Wyoming, a state that fiercely protects its rights, was weighing in on Washington’s decisions, McGrady said there are limits to what a state can do when it affects commerce.
“The governor has often said we don’t try and regulate Washington apples coming into the state of Wyoming,” he said. “It’s unfortunate seeing such an effort go through to stop a single commodity.”
Still the argument that Washington is violating the Commerce Clause may be a difficult one, said Larry Wolf, a long-time lobbyist and former energy lawyer in Cheyenne.
If Wyoming had a strong enough case on its own, it probably would have taken stronger steps to join suit, he said.
“The dormant Commerce Clause is not intended to stop all exercises of state regulatory or tax power,” he said in an email Wednesday. “Just those that have a clear basis in trying to assist the economy of the regulating state at the expense of other states.”