CROW AGENCY, Mont. — Every few hours trains packed with coal pass through the sagebrush-covered landscape here in southern Montana, some on their way north to Canadian ports for shipment to Japan and South Korea. If the mining company Cloud Peak Energy has its way, many more trains will thunder across the prairie to far larger proposed export terminals in Washington State.
It’s part of a push by the nation’s coal industry, hobbled by plummeting demand as Americans turn to cleaner natural gas, to vastly expand what it sends to Asia and Europe. But the aggressive effort to rescue the $40 billion industry is running into fierce opposition from environmental groups, who say pollution caused by burning coal should not be exported to other countries.
The two sides have engaged in an increasingly pitched battle, in regulatory arenas and on the airwaves, scaring off some investors and raising concerns about the fate of the industry, which is seen as a key to economic growth in Western states like Montana and Wyoming.
“The future of the U.S. coal industry is at stake,” said Richard Morse, managing director at SuperCritical Capital, an energy consultancy. “Their future domestically is dim and demand growth internationally is very robust, so it is fair to say that a resuscitation of the industry has to come overseas.”
The faceoff between the industry and environmentalists is playing out here in Montana, where Cloud Peak is poised to mine an Indian tribe’s enormous deposit of up to 1.4 billion tons of coal — more than the nation produces in a year — and send it to energy-hungry nations in Asia. But first, they need more export terminals to be built in the Pacific Northwest, and those have been delayed or, in some cases, scuttled after investors grew weary of the continued opposition from environmental groups.
Last week, the Sierra Club and other groups opened another phase in the battle, filing suit in a federal court in Seattle against Burlington Northern Santa Fe railway and several coal companies, saying coal dust escaping from trains has polluted rivers and lakes in Washington. The new export terminals, they say, would only bring more trains carrying coal to the ports and increase the amount of dust.
The controversy over coal exports parallels the debate over the proposed Keystone XL pipeline meant to take crude oil from Canadian oil sands to Gulf of Mexico refineries, where some of it would be exported. In both cases, local communities are struggling to balance the economic benefits of increased development of fossil fuels with the environmental damage that comes from extracting and burning them.
Coal’s share of electricity generation in the United States has fallen to under 40 percent in the last decade, from 50 percent. Annual production dropped 7 percent in 2012 to just over 1 billion tons, the lowest total in two decades, and the stock prices of many coal companies have been plummeting.
Cheap, abundant and cleaner natural gas produced in new shale fields has replaced much of the coal that American power plants once burned, and regulatory pressures are mounting to curb greenhouse gas emissions from coal combustion. That has left exports as the only sure growth engine for the declining American coal industry.
Last year, American coal exports set a record of 125 million tons in sales, roughly double the volume in 2009, with most of that going to Europe. Exports fell this spring because of slower Chinese demand for steelmaking coal. But energy experts say the big potential market for American coal remains in Asia, and several proposed Pacific Northwest export terminals would have the capacity to nearly double current exports.
For the Crow Nation, which is sitting on the reserves here, and many coal companies like Cloud Peak, exports could make the difference between just getting by and prospering.
While coal mining is the largest private sector provider of jobs, half the adult population is unemployed. Homelessness would be pandemic if it were not customary for three or four families to cram into small trailers so crowded that couples sometimes go to motels for moments of privacy and children struggle to do homework through a blare of television and crying babies.
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