Today in New West news: Interior scraps Obama-era coal royalty rule as it questions how Wyoming spends mine reclamation funds, Montana counties face challenges organizing special election, Bozeman delays Black-Olive vote, and Utah Supreme Court upholds Tesla decision.
Last January, the Obama administration and the Department of the Interior announced they were placing a moratorium on new coal mining leases. Per then-Secretary Sally Jewell, the moratorium was necessary since the Department “[hasn’t] undertaken a comprehensive review of the program in more than 30 years.”
Predictably, the announcement drew the ire of coal companies and coal proponents, who saw it as an egregious assault in the so-called “war on coal.”
The moratorium was slated to last three years while the Interior assessed the program to account for the social and health-related costs of coal mining. A few weeks after his inauguration as Interior Secretary, however, Ryan Zinke ended the moratorium, calling it a “waste of money.”
However, as we’ve noted time and time again on this site, and as The Hill points out, with or without a moratorium, with or without a “coal advocate” at the levers of power, coal is still on the decline.
Now, according to the Denver Post, the Interior has scrapped another Obama-era coal rule, “aimed at ensuring that coal companies don’t shortchange taxpayers on huge volumes of coal extracted from public lands, primarily in the West,” a rule Zinke described as yet another reversal in the “war on coal.” From the Post:
The process of setting royalty rates for coal and other energy sources “needs to be fair — not arbitrary — and make sure that the taxpayer at the end is the winner,” Zinke said.
He promised that coal royalty rates set under his leadership will be “transparent” and vowed to treat energy companies in the same way President Ronald Reagan treated the Soviet Union: “Trust but verify.”
Monday’s action repeals an Obama-era change aimed at ensuring that coal companies don’t shortchange taxpayers on coal sales to Asia and other markets. Coal exports surged over the past decade even as domestic sales declined.
Rules in place since the 1980s have allowed companies to sell their fuel to affiliates and pay royalties to the government on that price, then turn around and sell the coal at higher prices, often overseas. Under the now-repealed rule, the royalty rate would have been determined at the time the coal is leased, with revenue based on the price paid by an outside entity, rather than an interim sale to an affiliated company.
Conservationists criticized the Trump administration’s move, calling it a “sweetheart deal” for the industry that will deprive states of much-needed revenues. About half the coal royalties collected by the federal government is disbursed to states including Wyoming, Montana, Colorado, Utah and New Mexico.
At the same time, according to the Casper Star Tribune, in a new report compiled by the Interior’s Inspector General, the Department alleges that Wyoming is improperly spending its mine reclamation funds. In theory, all the funds should go toward reclaiming old coal sites—cleaning them up and cutting down on risks. In practice, per the report, not even half of Wyoming’s coal reclamation funds are going toward their avowed purpose. From the Tribune:
Between 2008 and 2012, Wyoming spent $134 million on coal reclamation versus $329 million on non-coal projects, according to the DOI report.
The report’s strongest criticism was not against Wyoming but the federal regulators who oversee the state’s spending, the Office of Surface Mining and Reclamation and Enforcement said.
“OSMRE has allowed Wyoming, Montana, and Texas to continually spend significant portions of their yearly AML grant money on non-coal projects while hazardous coal projects remain unfunded,” the report states. “The nature of abandoned coal mines accounts for some of this growing problem and underlines the need for a continued focus on coal-related hazards.”
Wyoming isn’t actually required to spend all the AML funds appropriated for the state on reclamation of old coal mines but must give coal-related projects first priority. It’s a deal that the state has with the feds because Wyoming has reclaimed its most egregious coal sites, earning “certification.”
Wyoming officials interpret that to mean the state can spend its yearly AML money on projects related to coal reclamation but also on other projects affected by mineral development, like roads.
According to the Department of the Interior’s Inspector General, that’s a bad deal.
Between 2013 and 2016, the ratio of Wyoming spending was somewhat improved from the previous period. About $214 million was allocated in the budget for non-coal projects and $166 million to address coal issues.
“Towns like Rock Springs, WY, currently face significant subsidence issues due to historical coal mining,” the report states. “Reclaiming these sites will likely cost nearly $100 million; however, Wyoming is diverting AML grant funds to other projects instead of giving coal reclamation projects top priority.”
Looking at Montana, we’ve been reporting on a push from one Montana Republican to conduct the upcoming special House election to replace Ryan Zinke and the partisan turmoil it’s sparked. Indeed, shortly after the bill was announced, Montana GOP chairman Jeff Essmann decried the move as one that would disproportionately favor Democrats. The bill’s sponsor touted it as a cost-saving initiative, adding that Montana Republicans aren’t disproportionately affected by all-mail ballots After significant debate, the all-mail ballot bill died in the Montana House—and is not likely to be revived in time for the May 25 election.
Now, according to the Bozeman Daily Chronicle, counties are struggling to get ready, citing time and money concerns:
Charlotte Mills, the Gallatin County clerk and recorder, said a polling place election usually costs the county about $200,000, about double the cost of an all-mail election. The increase in cost largely comes with hiring election judges, fewer of which are needed for an all-mail election.
Aside from paying them, it’s also not easy to find election judges this time of year. Mills said her office has contacted about 200 people who might be available to work the election, and that they typically have close to 300. She said to eliminate the need for more judges, they’ll consolidate processes at some polling places, like having every voter at a polling place report to the same check-in table regardless of precinct.
“By doing that we can conserve on the number of election judges that we might need,” she said.
Finding judges is a problem smaller counties have run into as well. Maritza Reddington, the Park County clerk and recorder, said they usually hire about 60 election judges for the county’s polling places, but some of them are snowbirds who have yet to fly back north.
“A lot of our judges go to Arizona, and they’re not quite back yet,” Reddington said.
The election is on the Thursday before Memorial Day Weekend, which Reddington said is another barrier to finding judges. She also is worried the police won’t be able to play their regular role in the county’s election. Usually, law enforcement officers will deliver ballots to Livingston from the county’s outlying polling places in Gardiner, Clyde Park and Emigrant. But Reddington said she’s not sure law enforcement will have enough time ahead of the big holiday weekend.
Keeping with Bozeman news, according to the Chronicle, the City Commission has voted to delay a vote on the controversial Black-Olive project. We previously reported the Commission had given the project a conditional go-ahead should the project manage to broker a ride-sharing program to account for parking shortfalls. The Commission will take up a vote on the project April 11.
Finally, down in Utah, we previously reported that Tesla was petitioning the state’s Supreme Court to let it sell its electric cars through its own stores; Utah law mandates that manufacturers sell their vehicles through third-party dealerships. Tesla has had apparent difficulty reaching franchise agreements with third-party dealers in Utah.
If Tesla was hoping for a quick turnaround, they’re surely disappointed now. According to the Salt Lake Tribune, the Court ruled 5-0 to uphold the law prohibiting Tesla from selling its car through a subsidiary rather than a dealership:
The court issued what it called a “narrow, legal decision” that did not pronounce on “broad policy questions” presented in Tesla’s appeal, such as whether Utah consumers “would be better off with direct access to the innovative vehicles offered by Tesla.”
Instead, the court ruled that the state constitution does not override regulators’ interpretations of the Franchise Act that prohibits an auto manufacturer from having an ownership interest in a new vehicle dealer.
“The Utah ruling is disappointing for Tesla and all Utah consumers interested in consumer choice, free markets, and sustainable energy,” a company spokesman said in an email to The Salt Lake Tribune. “We will pursue all options to ensure that Tesla can operate in Utah without restriction. In the meantime, we will continue to provide service and limited sales activities (through our used car license) at our location in South Salt Lake.”
The opinion was authored by Associate Chief Justice Thomas Lee, who wrote that Tesla UT was trying to get around the language of the Utah statute by arguing it was protecting auto dealers from competition.
The Tribune adds that the ruling does not shut the door on Tesla eventually being able to sell their cars through subsidiary stores in the state. In addition, the Legislature has attempted several times since 2015 to find an accommodation for Tesla—only to be rebuked by car dealers and other automakers.