Appeals court rejects theory that it doesn't matter where coal mined when it comes to carbon dioxide

Coal mining in the Powder River Basin. (Bureau of Land Management photo)

A federal appeals court ruled last week that the Bureau of Land Management did not adequately consider the environmental impact of greenlighting four large coal mines in Wyoming's Powder River Basin, and thus violated the National Environmental Policy Act. "The BLM concluded in 2010 that if companies were not allowed to mine the coal on federal land in Wyoming, the demand for coal would still be so high that it would be mined somewhere else, so the carbon-dioxide emissions would be the same whether the federal leases were approved or not. The Court of Appeals for the 10th Circuit ruled Friday that the BLM’s conclusion did not withstand scrutiny," Timothy Cama reports for The Hill.

BLM's decisions for leasing coal often hinge on the "perfect substitution" theory, which assumes that coal will be mined elsewhere if not at the tract under consideration, and that the prices the coal brings will be the same anywhere. But the court noted that Powder River Basin coal is generally cheaper than coal from other mines, Ellen Gilmer reports for Environment & Energy News.

Judge Mary Beck Briscoe wrote that the BLM showed no proof that coal to be mined in the basin could be easily mined elsewhere at a comparable price. "It did not refer to the nation’s stores of coal or the rates at which those stores may be extracted. Nor did the BLM analyze the specific difference in price between [Powder River Basin] coal and other sources; such a price difference would effect substitutability."

The case marks the first time a federal appeals court has ruled on the "perfect substitution" theory for coal leasing. Jayni Hein, policy director at New York University School of Law's Institute for Policy Integrity, told Gilmer "This opinion is significant because it means that future federal agencies cannot just rest on these questionable assumptions and will have to do meaningful analysis as to the actual greenhouse gas emission effects from their leasing decisions."

The ruling could be cited as a precedent in future cases to show that federal agencies must do due diligence in predicting the environmental impacts of decisions, Cama notes.