Climate change is forcing a stark choice in the coal fields of eastern Montana: stop mining, which has helped build everything from schools to senior centers, or risk astronomical future damage as fossil fuel emissions warm the planet and increase disasters, crop losses, and premature deaths.
Spring Creek, a gaping hole among sagebrush hills where house-sized mechanical shovels dig up millions of tons of coal annually, is one of the largest mines in this arid region straddling the Wyoming border. Much of it is shipped overseas and burned in Asian power plants.
Spring Creek’s hundreds of jobs support the economy of the Crow Indian Reservation and surrounding areas of Wyoming. Coal taxes and royalties fund nearly two-thirds of government services in Big Horn County, which encompasses the majority of the reservation. It is one of the most coal-dependent communities in the United States.
Greenhouse gas emissions from coal combustion also contribute to climate change, and President Joe Biden’s administration wants to charge for the resulting harm to people and the environment. The “social cost of carbon” could be used to justify emission reduction regulations for fossil fuels, transportation, and other industries.
However, a federal judge in Louisiana temporarily halted such efforts earlier this month, preventing the administration from using an interim standard of $51 in damages per ton of CO2 emitted.
The White House had planned to update its climate damage estimate in the coming weeks. Many economists predicted that the figure would more than double. Republicans and business groups argued that focusing on future climate damage would stymie the economy, particularly the energy sector.
Applying the administration’s carbon cost to Spring Creek would result in annual damages of more than $1 billion from a federal government coal sale that would keep it mining for at least another few years.
It’s a staggering figure from just one of the 15 mines dotting Montana and Wyoming’s Powder River Basin. However, after a federal judge in Montana ruled that the government exaggerated the mine’s economic benefits, the Biden administration is weighing the environmental costs and reconsidering the mine’s permit. Environmentalists want the department to stop an ongoing Spring Creek expansion and end mining. Their goal is to use the social cost of carbon to deny fossil fuel projects, rather than just inform rules and policies, as has been done in the past.
Spring Creek continues to dig while the permit is being reviewed — 13 million tons last year as Powder River Basin coal prices reached record highs as the economy recovered from its early-pandemic slump. The mine is owned by a Navajo corporation that took over bankrupt Cloud Peak Energy three years ago and became the third largest coal producer in the United States.
Local officials aren’t expecting the recent increase in coal prices to last: Over the last decade, demand in the United States has plummeted, and hopes of shipping more coal overseas have been stymied by West Coast states. A mine near Spring Creek will close in early 2021. Worried Big Horn commissioners enlisted accountant Michael Opie eight years ago to help navigate the industry’s collapse. He estimated that coal had about ten years left in it at the time. He’s no longer going to make a prediction.
Following cuts to key services such as gravel road maintenance of 1,000 miles (1,609 kilometers), the county is shifting the tax burden onto local residents in order to keep its sheriff’s office and other departments operational.
On an interim basis, Biden restored Obama’s $51-ton estimate and hinted that an even higher figure would be adopted. On Saturday, the administration filed an appeal against a February 11 court ruling that barred the use of the social cost of carbon, claiming that it would affect more than 30 pending rules, delay permits and leasing for federal fossil fuel reserves, and undermine international climate talks by silencing US officials on the subject.
With much of Biden’s climate agenda stalled in Congress, the issue could take center stage if the administration uses executive branch rules to limit industry emissions, according to Michael Greenstone, former White House Council of Economic Advisers chief economist.