A Fossil-Fuel-Exporting Superpower that Lectures the World about Cutting Emissions

by Gaius Publius

Bottom line first — the title of this piece is taken from the following quotation:

“We’re a fossil-fuel-exporting super­power that goes around lecturing the rest of the world about cutting emissions,” said Paul Bledsoe, who was an adviser on climate during the Clinton administration. “The United States is reducing its domestic coal use and then simply exporting some of those emissions abroad.”

Consider that the next time you want to give Barack Obama, or any U.S. president, credit for not allowing drilling in the U.S. part of the Arctic. Easy to do when Shell says it's not even profitable. If the U.S. government were truly serious about cutting global CO2 emissions, it would stop all oil, gas and coal leases on public lands. Yes, we're even leasing coal rights.

The Hypocrisy of the U.S. Government

And now the detail. The federal government leases the right to extract burnable carbon in many forms from publicly owned land. This story is about leasing the right to extract burnable coal. Joby Warrick writing at the Washington Post:

U.S. exports its greenhouse-gas emissions — as coal. Profitable coal.

Gillette, Wyo. — A few feet below this prairie town lies one of North America’s biggest coal deposits, a 100-foot-thick slab of brittle black rock spanning an area the size of Rhode Island — nearly all of it owned by the U.S. taxpayer.Just a dozen nearby mines, scattered across a valley known as the Powder River Basin, contain enough coal to meet the country’s electricity needs for decades. But burning all of it would release more than 450 billion tons of carbon dioxide into the atmosphere — more than all greenhouse-gas emissions from all sources since 2000.

The Obama administration is seeking to curb the United States’ appetite for the basin’s coal, which scientists say must remain mostly in the ground to prevent a disastrous warming of the planet. Yet each year, nearly half a billion tons of this U.S.-owned fuel are hauled from the region’s vast strip mines and millions of tons are shipped overseas for other countries to burn. Government and industry reports predict a surge in exports of Powder River coal over the next decade, at a time when climate experts are warning of an urgent need to reduce coal burning to prevent global temperatures from soaring.

Each shipment highlights what critics describe as a hypocrisy underlying U.S. climate policy: While boasting of pollution cuts at home, the United States is facilitating the sale of large quantities of government-owned coal abroad.

“We’re a fossil-fuel-exporting super­power that goes around lecturing the rest of the world about cutting emissions,” said Paul Bledsoe, who was an adviser on climate during the Clinton administration. “The United States is reducing its domestic coal use and then simply exporting some of those emissions abroad.”

It would be fair if we took the sum of the calculated CO2-emissions savings via President Obama's EPA emissions plan, and reduced that total by the amount of increased emissions from exported coal, oil and gas resulting from (very profitable, but not to us) federal carbon leases. From what the one hand gives, subtract what the other hand takes back.

Put differently, this program of leasing rights to extract carbon from federal lands and offshore waters hides what looks like the real purpose of these programs — to covertly enhance the profits of companies like Exxon while other programs publicly diminish them.

Leasing Coal Rights on Federal Land Is a Very Profitable Business

The other aspect of this business — the business the government is in when it leases the right to extract carbon from public land — is that it's giving away publicly owned resources for nearly nothing. Warrick again:

Nearly all of the coal is ­government-owned as a result of ­century-old laws that cede to the federal government the ownership of minerals that lie beneath much of the West’s land. Mining companies in the basin typically pay as little as $1 a ton for the federal coal they mine, although Washington assesses additional royalties and fees, and requires bonding to ensure the sites are cleaned up after mining operations end.

Coal company officials insist that taxpayers are getting an exceptional deal.

“The law requires maximum economic recovery for these reserves,” said John Eaves, chairman of the board for Arch Coal, the coal giant and the operator of Black Thunder, a Powder River Basin mine that ranks among the largest surface mines in the world. “Few industries anywhere generate such a high percentage of value for the public good.”

The “value” here stems in part from the fact that Powder River coal is cheap [to mine], by world standards. By a geology quirk, the basin’s biggest coal seam is unusually thick and sits just below the surface. There are no tunnels to dig and no mountaintops to blast away. The labor and materials required to extract the coal puts the average going price at about $10 a ton, a quarter of the cost of coal mined in Appalachia and little more than a sixth of the market price of Chinese coal. Wyoming’s coal contains less energy but also less sulfur, so it burns more cleanly.

What that means is this — the companies are getting an exceptional deal. They buy leases at $1 per ton, they sell the coal for $10 per ton, and their product is so attractively priced that they can more than compete on price against coal mined elsewhere, which sweetens the volume.

What Should the Government Do?

You could argue that the government should at least strike a better bargain in exchanges for the public's property, the carbon it owns under public land in Western states. But a better argument is that the government should just stop, unilaterally. By that I mean:

• Stop issuing new leases for carbon extraction on public land or offshore waters. A total freeze.
   
• Use every legal means possible to cancel existing leases at the earliest possible moment.

Again, I'm waiting for the first climate-serious candidate to promise to use his or her power as president to do this simple, easy to accomplish act. Seems like an obvious proposal, yes?

GP