Lawmakers divided on their role in export debate

E&E News
By Manuel Quiñones
February 7, 2014

The issue of natural gas exports has been buzzing on Capitol Hill for months. More recently, a proposal to lift the crude oil export ban sparked intense debate.

But the coal industry's efforts to boost exports? Not so much.

Even though some federal lawmakers think Congress should boost its scrutiny of proposals to increase coal exports, others are fine with letting the debate stay largely along the Pacific Northwest and Gulf Coast, where projects have been proposed.

An occasional series examining the growing national political debate over the business of fuel exporting.

In an interview this week, Rep. Rick Larsen (D-Wash.) said he doesn't like it when Congress gets involved in National Environmental Policy Act issues. He noted ongoing state and federal efforts at reviewing export proposals.

"I think it's to get into touchy territory when we are trying to use the [environmental impact statement] process to redefine some of the issues that folks want to adjudicate," Larsen said.

In other words, Larsen was questioning activists' and lawmakers' wanting to use the coal export debate to discuss related issues -- mainly whether more coal shipments will make it tougher for governments to deal with climate change and carbon dioxide pollution.

That's exactly what Oregon Rep. Peter DeFazio, the top Democrat on the House Natural Resources Committee, wants to do. In an interview, he complained about the lack of debate over issues like coal exports.

"There's no meaningful discussion going on," said DeFazio, one of the House's climate hawks. "And we have to keep our eye on the Obama administration."

Like Congress, the White House has largely stayed out of the coal export debate, at least in public. In 2012, the Council on Environmental Quality helped coordinate discussions on the issue.

In the end, the Army Corps of Engineers, the main federal agency involved in coal terminal permitting, decided to conduct project-level reviews rather than a broad probe of how coal exports would affect global climate, train traffic and Western mining, which is what export critics wanted.

The Army Corps announced its decision during a GOP-led House Energy and Commerce Committee's Energy and Power Subcommittee hearing on regulatory barriers to energy exports in general. Coal export boosters cheered. Environmentalists pounced.

"Despite thousands of public comments, broad constituency concerns and resolutions or statements passed by local elected [officials], the Army Corps of Engineers has only backpedaled," said Cesia Kearns, a Sierra Club advocate and prominent campaigner against coal export terminals.

"We need federal leadership to make sure our communities get the broad, thorough review of each of these projects that we deserve, including a full EIS at the Port of Morrow," she said, referring to one of the terminal proposals in Oregon.

Scrutiny goes both ways

DeFazio blames Republicans for the scant discussions. "When you have so many climate change deniers around here, Republicans in charge, they don't believe there's anything detrimental about carbon loading the atmosphere," he said.

"Certainly, coal and the massive increases in carbon emissions by China merit meaningful discussions, but it's not going to happen with these people in charge," DeFazio added.

In an interview yesterday, Sen. Maria Cantwell (D-Wash.) said, "I'm for ports; I'm just not for coal."

Democrats have been divided on the coal export issue. Some are more swayed by the climate change argument. Others feel the pull from labor unions, which want more shipping jobs.

Larsen, who has expressed support for terminal proposals in his state, said, "My personal thought is that if a member of Congress wants to get involved in it, they should get involved in it."

That's exactly what many lawmakers have done. In 2012, for example, Sen. Patty Murray (D-Wash.) sent the Army Corps a letter urging a broad, all-inclusive review of export proposals.

At around the same time, lawmakers from coal-mining states, like Rep. Cynthia Lummis (R-Wyo.), told the corps that a broad review would set a dangerous precedent.

Many coal export skeptics tend to want Congress to get more involved in an effort to increase scrutiny. But federal legislative involvement can go both ways.

Even though the corps declined to conduct broad export reviews, Washington state regulators are moving ahead with a thorough study of exports.

Ross Eisenberg, the National Association of Manufacturers' energy and resources policy vice president, said officials in Washington, D.C., including lawmakers, should step in if those in Washington state get carried away.

"The NAM supports current congressional efforts to ensure that U.S. energy exports reflect our modern energy economy," he said. "Congress aside, the federal government should be involved if the state of Washington takes action to control or restrict interstate commerce as it reviews coal exports."

A report prepared last year for NAM said the United States was at risk of running afoul of World Trade Organization policies if it restricted exports of liquefied natural gas and coal to energy-hungry countries.

DeFazio appeared to concede that point. "We can't prohibit the export of coal under the [World Trade Organization], which I opposed," said DeFazio. "The WTO says you can't limit the export of raw materials that are not in critical short supply, and you certainly can't make the case about coal."

Federal law limits exports of crude oil. Natural gas exports need Department of Energy approval. In contrast, coal exports have long been a fixture of American commerce -- a key reason behind the lower level of congressional scrutiny. Just yesterday, the Commerce Department said the United States exported almost 118 million short tons of coal last year.

More scrutiny over coal leasing

Even though coal exports are not grabbing Congress' attention, at least not yet, a related issue is federal coal leasing in Western states like Wyoming and Montana.

An Interior Department Office of Inspector General report from last year and a Government Accountability Office probe released this week raised questions about the Bureau of Land Management's program for leasing federal coal for mining.

Sen. Ed Markey (D-Mass.) requested the GAO report when he had DeFazio's job as ranking member on the House Natural Resources panel. And he called for a leasing suspension following the results.

One key issue in the discussion is whether the Bureau of Land Management is taking enough consideration of exports, and the revenues that mining companies stand to make from selling coal overseas, when it calculates the fair market value of leases.

Senate Energy and Natural Resources Chairman Ron Wyden (D-Ore.) and the committee's top Republican, Alaska Sen. Lisa Murkowski, pressed the Interior Department last year to ensure the soundness of the leasing process.

Yesterday, Cantwell said, "I definitively think Congress should look at the fact that coal is coming from federally leased lands and are they really paying their fair share of what they're impacting the environment with?"

And Larsen said, "There are serious questions to be asked about, does the royalty amount for mining on federal lands equal the amount that it ought to? I would be supportive of increasing lease payments and royalties on behalf of the taxpayer."

Not so fast, say coal mining advocates on Capitol Hill. During a hearing last year, House Natural Resources Committee Republicans fumed after the Interior OIG report said the leasing program may have undervalued lease modifications.

And this week, following the GAO report, they touted the benefits of mining rather than the watchdog's recommendations for improvement. BLM has said changes are underway.

"Some of my anti-coal colleagues requested a report on the coal leasing program, and when the report showed that each year, it adds around $1 billion to the Treasury, the coal opponents concentrated on misleading people into thinking the program is not competitive," said Sen. Mike Enzi (R-Wyo.).

Scrutiny will likely continue. When asked how Wyden views Congress' role in the coal export debate, spokeswoman Samantha Offerdahl said reviews are not limited to oil or natural gas.

"Sen. Wyden has repeatedly called for U.S. policy to consider the benefits and consequences of exporting American energy resources including coal, oil and natural gas, for consumers, for energy security and for the environment," she said in a statement. "Sen. Wyden is a strong believer in congressional oversight, and energy exports are certainly no exception."