Renewable Energy Update

AFTER THE ELECTION: WHAT COAL NEEDS MOST

November 28, 2016

By: M. Shane Harvey

My colleagues and I have the privilege of working with coal operators every day in the places where coal is mined in this country. From coal basins in Appalachia to Illinois to the Powder River Basin, we have had the pleasure of helping those who mine the coal that powers our homes and makes our steel.

In recent years, the challenges have been numerous, to put it mildly. Undoubtedly, many of those challenges have been market-driven.  But, without question, there have been unprecedented regulatory pressures as well.

The recent election has provided coal operators -- and those of us who represent them -- with a sense of optimism about the future regulation of coal. Recently, my colleagues and I met to discuss the areas where the regulation of coal needs to be reexamined.   While that list was too long to share, here are eight key areas where change is needed:

1. The Clean Power Plan. Perhaps this one is obvious. But the impact of the Clean Power Plan (“CPP”) on coal cannot be overstated. The CPP effectively sets emission limits for carbon dioxide that will drastically restrict (if not ultimately eliminate) the burning of coal for power generation. While the CPP has been stayed by the United States Supreme Court pending the outcome of a challenge in the DC Circuit, even the prospect of such a rule chills new investment in coal. If coal is to continue employing miners and providing low cost energy, a different plan is needed.
2. The Federal Mine Health Safety and Review Commission. Over the last eight years, the Federal Mine Safety and Health Review Commission has upended years of established case law that protected mine operators against unchecked action by MSHA. The Commission must reestablish itself as an independent adjudicative body. The Trump Administration could start this process by filling the vacant seat on the five-member Commission with a Commissioner dedicated to independent review of MSHA’s actions. We expect that the appointee would be designated the Chairperson, which also may provide guidance to the administrative law judges who serve the Commission.
3. The Stream Protection Rule. The proposed Stream Protection Rule has been mired in controversy for years. Rather than being designed to protect streams, the rule is widely seen as an attempt to dramatically curtail surface mining in Appalachia and longwall mining everywhere. OSM has been accused of deliberately misleading the public about the rule’s job impacts. The rule has not yet been released in final form and, if it is promulgated in the final days of the Obama Administration, many believe that Congress will undo the rule through the rarely used Congressional Review Act.
4. The Scope of the Clean Water Act. The Clean Water Act regulates discharges into “Water of the United States.” EPA’s efforts to define this term through its recent “WOTUS” rule have generated significant controversy and litigation. The “WOTUS” definition provided by EPA greatly expands the agency’s jurisdiction in many aspects of America’s economy, including the coal industry. Similarly, the Clean Water Act regulates discharges into “WOTUS” through “point sources,” which have traditionally been defined to include discharge structures such as pipes and ditches. Environmental groups (and some courts) have sought to expand the “point source” definition broadly to include things like dust emanating from coal trains; leaks migrating from fly ash ponds, and groundwater seeping from reclaimed mine sites. The definitions of “WOTUS” and “point source” need to be clarified in a common sense way.
5. Water Quality Standards. Water quality standards are important and need to reflect the best science. For years, coal operators have been forced to construct very expensive systems to treat water to meet an out-of-date selenium standard. While EPA has recently made some efforts to provide a more realistic standard for selenium (the prior one was based on studies performed in still -- rather than flowing – waters) more work needs to be done. Similarly, EPA has for many years sought to impose limits on “conductivity” in mine water discharges, even though there are some important questions about the underlying science. Standards for selenium and conductivity need to be based on solid and impartial science.
6. MSHA. The successor to Assistant Secretary Joe Main must commit to working with industry, rather than against it, to help achieve the goals of improving miner safety and health.   The new head of MSHA needs to commit to formal rulemaking rather than changing standards through policy documents. Roof control, dust control and ventilation plans must be suited to fit particular mines, rather than a one-size-fits-all approach dictated by the agency. And, MSHA’s respirable dust rule should be reexamined, with a proper consideration of the way in which x-ray programs, personal protective equipment, and administrative controls can play a role in protecting miners’ health.
7. Federal Coal Leasing. America holds some of the world’s greatest coal reserves and many of those are owned by the Federal Government. These reserves unquestionably provide an enormous benefit to taxpayers: federal coal leases generated $1.3 billion in federal revenue in 2014 and account for 42% of U.S. coal production. In January 2016, however, the Obama Administration announced that it was placing a “moratorium” on new federal coal leases while it examined the “social costs” of coal. Certainly, the costs and benefits of federal coal leases can be analyzed without a largely symbolic “moratorium” that jeopardizes investment in these resources.
8. NLRB. The pro-labor National Labor Relations Board has expanded the reach of federal labor laws into unprecedented areas in recent years under the Obama Administration. This effort has included the widespread invalidation of arguably neutral employment policies because they have the hypothetical possibility of interfering with the rights of employees to engage in concerted activity.  In addition, the Board has expanded the types of employers subject to unionization and unfair labor practices by liberalizing the standard for establishing a joint-employment relationship. Finally, the NLRB has made it easier for unions to organize employers by recognizing small “micro” bargaining units and adopting “ambush election” rules, which shorten the time frames for union elections.  Currently, the five-member Board has two vacancies. By appointing two new members with pro-employer leanings, the Trump Administration will have the opportunity to begin the process of paring back these rulings.

This article was authored by M. Shane Harvey, Jackson Kelly PLLC.