Wyoming town wants low royalties for coal companies

In Interior Department listening session, Gillette miners air fears of new regulations.

 

Gillette, Wyoming, the heart of the nation’s coal industry, came out en mass this week to make an impassioned plea to the Interior Department to leave the federal coal program alone.

Miners and their supporters stood at microphones in a small auditorium in a public library and begged the federal officials in the room not to increase royalty rates and drive their companies out of business. Emotions were high because of fears that new regulations will cause a significant decline in coal mining over the next 15 years.

Miners and their supporters tell Interior Department not to change federal coal program.
Elizabeth Shogren
Representatives from school systems, social services and businesses connected to the mines all painted a picture of community that thrives because of coal but could crumble without it.

Penny Russell, who drives a massive truck that hauls coal at one of the mines near Gillette, referred to a recent newspaper headline warning of 11,000 layoffs in the state in coming years.

“It’s not 11,000 people losing jobs. It’s 11,000 families losing their main source of income, along with that their dreams and hopes,” said Russell, 46, a mother and grandmother, who works at Cordero Rojo, run by Cloud Peak Energy Resources.

Like many other miners, she talked about how the sizable income she gets at the mine makes her family much more stable than when she worked in retail earning a third as much. Coal miners on average made $84,000 in 2013 in Wyoming, nearly twice the state average. 

The Gillette public meeting was the third of five listening sessions Interior is holding this summer, mostly in the West, to get input on whether royalties should be increased to give Americans a fair share for public coal resources. Forty percent of the coal used for electricity in the United States comes from resources owned by the federal government and most of that coal comes from massive surface mines within an hour’s drive of Gillette.

Interior Secretary Jewell did not attend, but in an earlier listening session in Washington, DC, she said she also wanted public comment on: “How do we manage our coal program in a way that is consistent with our climate change objectives?”

As a sign of how up in arms state officials are about the Obama administration’s coal policies, Wyoming’s governor and whole delegation to the U.S. Congress showed up. All are Republicans.

U.S. Rep. Cynthia Lummis urged Jewell not to turn “the federal coal program into a global warming program.”

“Secretary Jewell, let the people in Wyoming, the largest exporter of energy in America, keep their jobs, keep educating their children and keep the lights on,” she said, referring to the $1.1 billion in revenue the state and communities in Wyoming received in 2014 from the coal industry.

Lummis added that the president doesn’t need to increase royalties and taxes to attack the coal industry, because he’s using the Environmental Protection Agency to do that.

The EPA earlier this month, as HCN reported, announced the first ever greenhouse gas limits for coal-fired power plants. The Obama administration also regulated mercury and other toxic emissions from power plants and tightened other pollution rules.

Governor Matt Mead blamed these regulations for pushing the industry into the difficult financial shape it’s in, with one company recently declaring bankruptcy and others close to it. “What’s happening to coal right now is a disaster for this state; it’s a disaster for this country,” Mead said.

Senator John Barrasso argued that the federal government should assess the impacts its own regulations are having on federal coal revenues. “I think it’s hypocritical for the administration to ask whether it’s getting a fair return on federal coal when it's going to such lengths to suppress the demand on federal coal,” Barrasso said.

Senator Mike Enzi, who was mayor of Gillette when its 14 mines opened, added: “We just ask that you don’t kill the golden goose... If we put them out of business, it will ripple through the entire economy.”

None of the Wyoming politicians mentioned the major role that competition from another local industry — natural gas — has played in reducing the demand for coal. “The biggest problem coal faces right now is not regulation — that’s in the future —it’s natural gas,” Robert Godby, associate professor of economics at the University of Wyoming. “Locked up in this debate is a lot of political partisanship.”

Also not mentioned was that coal companies’ financial woes were in large part due to major investments they made far from Wyoming that failed to pan out.

That’s not to say that Obama administration regulations won’t hurt coal production. Under his Clean Power Plan, the EPA predicts the share of electricity produced from coal will drop from about 40 percent to 27 percent by 2030. That 11,000 number was extrapolated from a study Godby did of an earlier version of that plan. He didn’t actually calculate the number of layoffs because so much can change before 2030, when the rule takes full force.

Worries about the impact of the regulations overshadowed what the listening session was supposed to be about: whether royalty rates should be increased to give Americans and Wyoming a bigger return for their coal. The state and national treasuries currently split the revenues, which were about $555 million in 2013, according to the Bureau of Land Management. 

The vast majority of the scores of speakers spoke in defense of coal, a stark contrast to the DC listening session. In DC, as HCN reported, most speakers called for higher royalty rates and many advocated keeping federal coal in the ground to help fight climate change.

A few speakers in Gillette offered a different perspective, including Shannon Anderson, a Wyoming native and lawyer for the Powder River Basin Resource Council, an environmental group. “We are long overdue for taking a hard look at this program and acting to overhaul it to benefit the public,” she said.

So many people wanted to speak — 89 signed up — that the session stretched for more than four hours.

Before it started, coal companies and politicians held a rally behind the library. Richard Reavey of Cloud Peak Energy roared that the Obama administration officials should “stay in DC and stay out of our business."

Katrina and Addison Means are among many in Gillette who support the coal industry.
Elizabeth Shogren
Most of the several hundred people in the crowd wore “friends of coal” stickers, including 17-month-old Addison Means, who wore hers on her bib.

“We’re scared. No matter what you do here, we’re scared,” said Katrina Means, 34, Addison’s mom.

For a living, Addison’s father installs air conditioning in schools that are paid for with coal revenues.

“If coal miners don’t have jobs, no one has jobs,” Means added. “Coal is everything here. It’s our schools; it’s our parks; it’s everything,”

Elizabeth Shogren is HCN's DC Correspondent.