Wyoming vs Washington: Interstate showdown over last major coal export project

A P&H 4100 shovel loads coal into a haul truck at the North Antelope Rochelle mine in Campbell County, Wyoming. Credit: Wikipedia

Wyoming andMontana filed a U.S. Supreme Court motion last month against the state ofWashington for blocking access to the last major coal export project on theWest Coast, impeding the states' ability to get their coal to Asian markets.

When Wyoming Governor Mark Gordon announced the legal action over blocking the export terminal in Longview, it had been long anticipated by lawmakers who see the west coast terminal as crucial to bringing Powder River Basin coal to international markets.

In an industry shakeup, Wyoming and Montana's motion says it's "unconstitutional discrimination against a proposed coal export terminal."

Washington says the Millenium bulk terminal failed to meet water quality and other environmental standards.

The case breaks down into two parts: A state's right to impose environmental laws versus constitutional rights to access commerce

The Millennium Bulk Terminal hit a major hurdle when the Washington Department of Natural Resources denied a necessary permit for construction on environmental grounds. The Washington State Court of Appeals in August upheld the state's choice to deny the required state-owned land permits for the terminal last year, the Casper Star Tribune reported.

The Powder River Basin in northeast Wyoming and southeast Montana is America's' top coal-producing region. 47% of country's coal comes from Wyoming and virtually all coal in Wyoming is thermal.

Matt Micheli, a Cheyenne, Wyoming-based attorney environmental and energy partner at environmental law firm Holland & Hart says the case breaks down into two parts: A state's right to impose environmental laws versus constitutional rights to access commerce.

"Certainly, here in Wyoming we saw thedecline of coal more than anyone else in the country. Our history doesn't gettold as much Appalachia and West Virginia, but we produce more coal than anystate in the country... For a while we produced almost as much coal as the restof the country combined."

"We are feeling the decline here mightily. You talk about coal miners; you're talking about nameless people. For us, that's our family, friends, it's a real thing real crisis we face, and it also has an impact on our state finances. We are so dependent on coal and oil and natural gas from somewhere between 65% of our state budget comes from those three fossil fuels so we feel it on a lot of different levels," Micheli told MINING.COM.

The Powder River Basin in northeast Wyoming and southeast Montana is America's' top coal-producing region

Micheli said Wyoming believes that coal is an important part of the state's energy security and its future.

"They continue to build coal fire plants in Asia. China continues to burn coal. They are going to burn coal from somewhere."

Micheli said coal from Wyoming and Montana is the cleanest coal that China can possibly get to burn.

"I think for the environment groups coalhas become a bad word, in the environment community they just want to block anyuse of the coal so... it helps them to feel good blocking coal from being shippedinternationally. If you really want to protect the environment you should allowthem to burn coal that is cleaner and higher quality," Micheli said.

The lawsuit was filed in the Supreme Courtof the United States on January 24. As of February 21, Washington State had notfiled a response.

"They will say that's nothing to do with blocking interstate commerce or access to international markets, we are just applying our own environment laws we have in our state," Micheli said.

"And that's really the rub, is whether a state's sovereign right to create environmental laws goes against the constitution and access to commerce... and that's what the supreme court must resolve."