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Trump’s Coal Executive Order: Hot or Not for Tribes?

President Donald Trump's Executive Order rolling back coal-mining restrictions has both positive and negative effects on tribes.

Surrounded by an assembly of burly young coal miners, President Donald Trump on March 28 signed an executive order entitled Promoting Energy Independence and Economic Growth.

It was billed by the White House as the fulfillment of a campaign trail promise to put coal country back to work. He has further promised, "We are going to have clean coal. Really clean coal." With federal tax credits, state-level mandates, and technology improvements for renewable energy likely on the chopping block because of his executive order, it’s clear the president wants the U.S. to use more coal-generated electricity.

Indian country reactions have varied—from the support of some Navajo, Hopi and Crow Tribe leaders who have large coal interests, to a federal lawsuit against the rule by the Northern Cheyenne Tribe, a direct witness to coal pollution, against the Interior Department’s recent decision to suspend a moratorium on coal leases on public land without consulting the tribe. Tribes that have been investing in renewable energy are also concerned that Trump’s approach may ultimately leave their projects unfunded and unsupported.

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For his part, Trump argues that it is "in the national interest to promote clean and safe development of our nation's vast energy resources, while ... avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation.” His executive order is aimed removing policies "that serve as obstacles or impediments to domestic energy production."

Indeed, coal mining can still be a profitable occupation for individuals and for some tribes, especially in coal-rich areas otherwise struggling with high unemployment.

At the same time, the demand for coal energy has dropped dramatically over the past several decades. The reasons for the decline are multifold: decreased growth in electricity sales, a drop in the competitive price and availability of natural gas, and a surge in demand for green energy.

Though recent Energy Information Administration (EIA) data show a 14.5 percent uptick in U.S. year-to-date coal production in 2016, EIA is projecting static or falling domestic and foreign demand for U.S. coal, and consequently, declining supply through 2018.

Coal sales from Indian lands dropped by 37 percent between 2003 and 2014, according to the EIA.

The bad news for those tribes with coal resources they would like to monetize is that they might be late to get into the game until "clean coal" is a reality. Before Trump’s executive order, even tribes already producing coal energy, like the Navajo, Hopi, and Crow, were expanding their portfolios to include sustainable resources because they all could see the dramatic shifts away from coal use nationwide.

Crow Nation Chairman Alvin Not Afraid Jr. testified at a March 8 Senate Committee on Indian Affairs (SCIA) meeting that though "coal has been the mainstay of the Crow Reservation economy" for many years, "various federal regulatory initiatives during the previous administration....[had] taken a serious toll on the Western coal industry, and especially on the production of Crow and other Indian coal."

The Crow Nation has leased its reserves to Westmoreland Resources, Inc., which has sold some 200 million tons of coal energy to Midwestern utilities over the past 40 years. This revenue represents nearly two-thirds of the tribe's nonfederal annual budget and employs 70 percent of the tribal workforce at an average annual salary of more than $66,000. Nine billion tons of Crow coal remain unmined.

Consequently, Not Afraid said, the Crow are "aggressively pursuing other economic development projects, including renewable energy, to diversify and reduce our dependence on coal revenues...." The worry for him is the time required to transition to make those projects profitable enough to replace coal.

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Derek Dyson, a lawyer with Duncan, Weinberg, Genzer & Pembroke who represented the Navajo Tribal Utility Authority at a March 15 SCIA roundtable discussion on infrastructure development, voiced Navajo concern over the impact of the decommissioning during the Obama administration of the Navajo Generating Station, which will begin at the end of 2017.

With the Navajo and Hopi nations both reliant on revenue from coal mining, coal power generation and agriculture, Dyson said that the already astronomically high 48.5 percent unemployment rate on the Navajo reservation would push even higher.

The aging station—a private-public partnership—might enjoy a reprieve, though, if Trump’s new executive order puts an end to the environmental laws that closed the Mohave Generating Station and the Black Mesa Mine owned by the Navajo and Hopi in 2006.

At the same time, Navajo President Russell Begaye conveyed his equal commitment to the tribe's environment.

"When the Clean Power Plan (CPP) was being proposed [in June 2014], the Navajo Nation agreed with the new standards that were set forth to reduce carbon dioxide emissions on the Nation,” Begaye said. “The Four Corners Power Plant (FCPP) near Shiprock, N.M., and the Navajo Generating Station near Lechee, Ariz., had made, or were committed to making, reductions in emissions that conformed to the new standards under the CPP."

He added, "We remain neutral to President Trump’s Executive Order calling for an immediate review of the CPP, but we remain vigilant in protecting our land, water and air."

For all coalmines, the extraordinarily low global price of natural gas has been a much greater impediment in making mining profitable, as has the shift in public attitudes toward the environment.

The antidote, said Steven Morello, former deputy assistant secretary for intergovernmental affairs and the first director of the Office of Indian Energy Policy and Planning in the Energy Department, is for tribes to focus on using tribal energy resources to make value-added products of all types.

Morello interpreted Trump's executive order as an all-of-the-above approach, with fossil fuels, renewable resources, hydroelectric, geothermal, solar and nuclear fuels all looking for a place in the free market.

“Whatever wins will do so because of market pressure, not policy," he said.

Success will also depend on how risk-averse tribes are to entering new markets and how successful they are at attracting investment for new energy markets or other enterprises.

Whatever the case, "Nobody is rolling back 50 years of regulations," Morello said. In his opinion, Trump is only trying to roll back eight years of regulation that the Obama administration put in place that would result in a small percentage of improvement in air and water quality.

Impossible to gauge is the impact of public pressure deriving from movement toward sustainable energy and the growing consciousness of the impacts of climate change on investment in energy projects. One reason coal production is down is that electricity demand is down significantly. And, as Morello pointed out, when Americans want to, they can cut demand.

Ironically, the impact of Trump’s executive order may ultimately be moot, or at least blunted, given the time it takes to undo policy, which may be just as long as it took to make it and implement it in the first place.