by Jessica Goad

Senators Ron Wyden (D-OR) and Lisa Murkowski (R-AK) have called on Secretary of the Interior Ken Salazar to investigate if U.S. taxpayers are getting shortchanged by companies mining coal from public lands and exporting the resource to other countries.

That’s according to a report from Reuters today.

Senator Wyden is Chairman of the Senate’s Energy and Natural Resources Committee, and Senator Murkowski is the ranking member.

Wyden and Murkowski said they were concerned that coal companies are not paying high enough royalties on coal mined on public lands.  According to another Reuters article in December, companies are valuing coal at lower domestic prices rather than higher international prices so they “can dodge the larger royalty payout when mining federal land.”

If any violations of the law have occurred, companies should be required to cure any gap in royalty payments and, if misconduct has occurred, civil penalties should be levied,” reads Wyden and Murkowsi’s letter.

Approximately 43 percent of the coal produced in the U.S. comes from public lands managed by the government and owned by all Americans. Public lands are home to some of the richest coal deposits in the nation, mostly located in Wyoming and Montana’s Powder River Basin.

However, as the use of coal for electricity continues to decrease, coal companies have been eying fast-growing Asian markets as a potential destination for U.S. coal.  In 2011, U.S. coal exports were the highest they have been since 1991, and companies like Arch Coal have predicted that they could be even higher over the next few years.

Shorting royalties isn’t the only way that taxpayers may be losing out. Some have called out the government for carrying out policies on public lands that keep coal cheap, and therefore shortchange American taxpayers.

For example, a report published by financial analyst Tom Sanzillo in July found that the Interior Department has offered coal leases non-competitively in the Powder River Basin rather than putting them up for auction, thus costing taxpayers  as much as $29 billion over the last three decades.

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The presidential and congressional elections dominated the American news cycle in 2012. And although climate change took a backseat during the campaign, energy played a surprisingly prominent role.

The news cycle was dominated by energy: Republican presidential candidate Mitt Romney made fossil fuel extraction his number one priority; fossil fuel interests spent hundreds of millions of dollars to promote oil, coal, and gas during the election; and President Obama busily defended his promotion of renewable energy after getting attacked by the fossil fuel lobby.

Looking back at 2012, here are some of the most important energy stories of the year:

AP Fact Check: In 36 Years Of Data, No Evidence That Drilling Reduces Gasoline Prices

In March, the Associated Press analyzed more than 30 years of gas price and domestic drilling data. It found absolutely no correlation between increased domestic drilling and lower prices for consumers. Why? Because oil is a global market and U.S. production represents a small portion of global demand.

This was a particularly important story in 2012. Throughout the election season, the fossil fuel lobby and proponents of “drill-baby-drill” pushed a plan for unchecked fossil fuel development, falsely claiming it would lower gas prices. Experience proved otherwise. Even though the U.S. is producing more oil than at any point since the mid 1990′s, gas prices have remained “stubbornly high.”

Big Polluters Spend $270 Million In Final Months Of 2012 Elections

Fossil fuel interests spent unprecedented amounts of money this election season. In the last two months of the campaign, groups promoting fossil fuels spent $270 million on television ads to influence the presidential, House, and Senate races. From April to November, these groups spent $265.9 million on the presidential campaign alone, according to a Center for American Progress Action Fund analysis.

But the lavish spending didn’t work. Despite spending record amounts of money, polluter groups failed to change the presidency, failed to change the balance of power in Congress, and failed to give Republicans the important coal states of Ohio, Pennsylvania, and Virginia.

Environmental Groups Celebrate A Political Victory: ‘Knock, Baby, Knock’ Beat ‘Drill, Baby, Drill’

Judging by pure spending, the 2012 election wasn’t looking good for environmentalists. Polluter groups outspent environmental groups 4-1, making it seem like the momentum was on their side. But the results showed otherwise: Four out of the “flat earth five” climate deniers in the House lost their races; Seven of eight Senate candidates supported by environmental groups won their races, thus preventing Republicans from taking the Senate and cutting off the drumbeat of anti-environmental legislation in the House; 11 of the 12 “Climate Heroes” promoted by environmentalists won their races; and the President kept his job.

While gridlock will likely define Obama’s second term, environmental advocates said the 2012 elections proved their strength: “We went head to head with the likes of Crossroads and Karl Rove,” said Jamie Rappaport Clark, president of Defenders of Wildlife, after the elections.

Shell’s Woes In The Arctic Underscore Challenges In The Region

The Arctic is shedding ice at an alarming rate due to global warming. The response? Oil companies want to use the opportunity to look for more offshore oil and gas that will only accelerate warming. In 2012, Shell became the first company to drill exploratory wells in U.S. Arctic waters, raising concerns about the local and global environmental impact. (For more on this, check out the great documentary produced by the Center for American Progress oceans team).

Shell’s troubles throughout the year proved just how tough it is to drill in the region. From crushing its oil containment unit “like a beer can” to losing control of its drilling rig, the company faced numerous challenges. And major organizations responded. In April, insurance giant Lloyd’s of London warned that responding to an oil spill in a region that is “highly sensitive to damage” would present “multiple obstacles, which together constitute a unique and hard-to-manage risk“; German bank WestLB announced it would not finance offshore oil or gas drilling in the Arctic, saying the “risks and costs are simply too high”; and Total SA, the fourth largest publicly traded oil and gas company in the world, said drilling in the region could be a “disaster.”

Renewable Electricity Nearly Doubles Under Obama

President Obama was attacked hard in 2012 for his promotion of renewable energy, green jobs, and environmental regulations. Many opponents claimed that stimulus investments in renewables didn’t work. But the figures told otherwise.

According to figures from the Energy Information Administration, non-hydro renewable electricity generation has nearly doubled since Obama took office, reaching 5.75 percent of net electricity. In 2008, before Obama entered the White House, non-hydro resources like solar, wind, geothermal, and biomass represented just over 3 percent of generation. While political uncertainty has made 2013 prospects for renewables uncertain, the U.S. has still maintained a strong role in the global market. Since 2004, one trillion dollars have been invested in the global clean energy sector, with a large portion of that coming from the American private and public sectors.

This is just a small selection of the many important stories throughout the year. Tell us what your top energy stories are below.

After a 21-city tour educating people on a new fossil fuel divestment campaign, climate activists are starting to see results.

In the last month, groups on 192 university and college campuses have organized campaigns to pull their schools’ endowments out of the fossil fuel industry. One small school, Unity College, has already committed to divesting from coal, oil, and gas. At Harvard, a school with the country’s largest endowment, 72 percent of students voted in favor of divesting from fossil fuels. Although Harvard officials balked, a group of student activists has kept the pressure on.

There’s another big piece of news on the divestment front this week. Seattle Mayor Mike McGinn is now calling on his city to strip fossil fuels from its two main pension funds. According to the city’s finance director, Seattle has $17.6 million invested in Chevron and ExxonMobil, as well as smaller investments in other oil and gas companies. Mayor McGinn sent a letter to the city’s pension fund managers on Friday calling for them to move their money elsewhere:

To the members of the Seattle City Employees’ Retirement System Board:

I write to you today to ask that you refrain from future investments in fossil fuel companies and begin the process of divesting our pension portfolio from those companies. I recognize that this process will require a thorough evaluation of the portfolio’s performance, assets, and investment strategies. City staff stand ready to assist you in this work.

Climate change is one of the most important challenges we currently face as a city and as a society. We have watched in recent weeks as weather influenced by climate change has caused significant damage and financial losses to cities and states on the East Coast. The projections suggest that the problem could get much worse. According to Bill McKibben and 350.org, fossil fuel corporations now have 2,795 gigatons of carbon dioxide in their reserves, five times the amount considered safe to avoid catastrophic climate change.

I believe that Seattle ought to discourage these companies from extracting that fossil fuel, and divesting the pension fund from these companies is one way we can do that. The City’s cash pool is not currently invested in fossil fuel companies, and I already directed that we refrain from doing so in the future. In addition, I am asking the Deferred Compensation Plan Committee to develop options for City employees to allow them to move their investments out of fossil fuel companies if desired, and to offer fossil fuel free investment choices to them refrain from future investments in fossil fuel.

The City of Seattle’s finance director informs me that two of the system’s top 10 investments are with ExxonMobil and Chevron. The pension system has currently $17.6 million invested with these two firms, which represents roughly 0.9% of the system’s $1.9 billion in assets. I understand that it is likely the system has investments in other fossil fuel-related entities as well.

There is a clear economic argument for divestment. While fossil fuel companies do generate a return on our investment, Seattle will suffer greater economic and financial losses from the impact of unchecked climate change. Our infrastructure, our businesses, and our communities would face greater risk of damages and losses due to turbulent weather that climate change causes. As a waterfront city, several of our neighborhoods and industrial districts are at risk if climate change causes a significant rise in sea level.

I believe that Seattle’s pension funds should be invested in companies that can provide a good return on our investment without putting our city and our future at risk. I am ready to work with the City Council and the pension board to make this happen.

Sincerely,

Mike McGinn
Mayor of Seattle

This is the first time a city official has called for pulling money out of fossil fuels since the divestment campaign began. The strategy, organized by 350.org and promoted by a slew of other environmental groups, is modeled after a campaign in the 1980′s that pressured South Africa into abandoning apartheid. While the South Africa campaign was effective in forcing an end to the country’s racial segregation policies, the fossil fuel campaign is meant as more of symbolic gesture to “strip the social license” of fossil fuel companies exacerbating climate change.

by Jules Boykoff

In the Pacific Northwest, activists and their allies are ramping up for a full-throttle battle over a proposal to haul coal across the west for export to China. Big Coal’s latest master plan promises to generate a second epicenter of climate-change resistance—our very own Keystone XL pipeline showdown.

With coal prices plummeting, thanks in large part to the spike in natural gas use, coal barons are desperate to offload their lucre. Showing ever-greater verve, they’re dumping it in overseas markets, especially China. The US Energy Information Administration projects US coal exports will hit an all-time high in 2012—some 125 to 133 million tons—more than doubling 2009 export levels and surpassing a record set in 1981.

When it comes to climate disruption, these are ghastly numbers. After all, 2012 looks like it’ll be the hottest year on record for the contiguous US. The year brought devastating drought and catastrophic storms. While we can’t peg any single weather event to climate change, this is precisely the sort of climate seesaw scientists have predicted. Meanwhile, the Arctic suffered record losses in sea ice and snow cover. And globally, 2012 is on course to become the ninth hottest year ever. Revving up coal consumption—the dirtiest of fossil fuels—is not going to help matters, to say the least.

That’s where the Pacific Northwest enters the picture. This month the Oregon Department of Environmental Quality (DEQ) staged what may well be the only public meetings on the permitting process for the US coal industry’s hail-Mary moment: to convert the western United States into a railroad and barge pipeline for coal mined in Montana and Wyoming and hauled along the Columbia River to the Pacific Ocean for export to China and elsewhere.

This Morrow-Pacific coal export proposal—which is being pushed by Australia-based Ambre Energy—will annually ship overseas nearly nine million tons of coal. The plan has dredged up blistering opposition. The Sierra Club—buoyed by New York Mayor Michael Bloomberg’s donation of $50 million last year—has made it a centerpiece of its Beyond Coal campaign. Groups like Columbia Riverkeeper and the Power Past Coal coalition have rallied locals to the cause. The Yakama Nation, Lummi Nation, and other Native American tribes in the Pacific Northwest have challenged the proposal’s logic and merit. The Affiliated Tribes of Northwest Indians demanded a comprehensive environmental impact assessment while the Columbia River Inter-Tribal Fish Commission questioned the wisdom of hauling coal through at-risk waterways, which could undercut the tribes’ treaty rights.

More than 800 people packed the meeting hall in Portland. Just before the event commenced, Cesia Kearns, a Sierra Club campaign representative, told me, “Coal is the culprit on climate change. If we continue to burn coal at current levels, much less increase them, we’ll have no hope of turning climate change around.”

This sentiment was shared by many people who asked questions or provided public comment. They interrogated DEQ about air pollution from open-topped trainloads of coal. They quizzed officials on the hazards the project could cause for salmon runs and other wildlife in the region. They asked about the effects additional coal-burning would have on climate change. And they pressed officials about the literal blowback that could emerge: coal burned in China produces mercury that wafts back to the Pacific Northwest.

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By 2017, the world will increase its coal consumption by more than 1.2 billion tons per year — equivalent to the current coal use of the U.S. and Russia combined. That’s according to a new report on the booming coal sector from the International Energy Agency.

Many have hailed the drop in U.S. coal consumption over the last year as a modestly positive trend for climate; however, that decrease is being overshadowed by a boom in developing countries, particularly China. The IEA projects that China will account for 70 percent of coal consumption by 2017:

Coal accounted for 45 percent of global CO2 emissions in 2011. Without a slowdown in coal consumption, China’s carbon emissions hockey stick is about to get a lot sharper. Here’s what it looks like already:

The same could be true in India as well, a country that will account for 22 percent of growth in coal consumption. According to a recent report from the World Resources Institute, there are more than 1,200 coal plants planned around the world, most of which will be built in China and India. If all the plants in the pipeline are built, they would amount to a generation capacity four times greater than the current American coal fleet.

Here are some key stats reported by the IEA in its latest assessment:

• Coal demand is growing everywhere but the United States. The trend of the last decade continued in 2011, with coal supplying near half of the incremental primary energy supply globally. Coal demand grew 4.3% in 2011, or 304 million tonnes (mt). Chinese demand grew by 233 mt. The only region where coal demand declined was the United States. That drop is neither policy-driven nor a consequence of recession but rather the result of the availability of cheap gas.
• Even though coal demand growth is slowing, coal’s share of the global energy mix is still rising, and by 2017 coal will come close to surpassing oil as the world’s top energy source. The world will burn around 1.2 billion more tonnes of coal per year by 2017 compared with today. That’s more than the current annual coal consumption of the United States and Russia combined.
• China has become the largest coal importer in the world. In 2009, China became a net coal importer for the first time. In 2011, it became the largest coal importer, surpassing Japan, which had held the position for decades. Chinese imports (including Hong Kong) reached 204 mt in 2011 and they continued to grow in 2012.
• Indonesia has become the largest coal exporter in the world. As another example of the increasing weight of non-OECD countries, Indonesia surpassed long-standing leader Australia as the largest exporter on a tonnage basis. Floods in Queensland in 2010-2011 constrained Australian exports, while Indonesia growth did not stop, surpassing the 300 mt line.

As both the World Bank and the International Energy Agency have pointed out in recent scientific summaries, we are on a path toward disastrous climate change — and only a dramatic re-thinking of policies can set us on a path toward manageable warming.

by Justin Guay and Nicole Ghio, via the Sierra Club

Continuing its efforts under Chairman Fred Hochberg to direct as much U.S. taxpayer money as possible to dirty climate destroying coal projects with devastating social and environmental impacts, the U.S. Export-Import Bank (Exim) Board of Directors discussed financing the controversial Oyu Tolgoi gold and copper mine in Mongolia at its meeting last week.

This is the very same project the World Bank Group is already under heavy criticism for considering.

But wait, you say, that doesn’t sound like a coal plant…

That’s what the World Bank, and Ex-Im Bank, would like you to believe. But tucked into the investor agreement is a requirement to construct a new 750 MW coal-fired plant to power the mine after four years. But since the coal plant is an “associated facility,” the World Bank didn’t bother to follow its coal policies. Instead it failed to convene an expert panel to screen the project because they might realize that low carbon alternatives exist. You know, like when the New York Times highlighted this very same project as ripe for wind development.

Civil society is rightfully quite angry at the World Bank. Not only for this blatant attempt to avoid the rules, but because the project is already facing a complaint from local herders whose access to clean water, livelihoods, and culture are endangered by the project.

by Noreen Nielsen and Rebecca Leber

Voters this year rejected polluter-backed candidates in some of the most expensive races targeted by outside groups. In the final two months of the campaign, dirty energy allies spent more than $270 million on misleading TV ads in presidential and congressional races, and on industry ads promoting polluter interests. That tally includes more than $31 million in energy-specific TV ads.

Despite record outside spending, candidates that spoke out for clean energy and common-sense public protections won down the ballot. President Barack Obama alone faced more than $176 million of ads from pro-polluter groups including Americans for Prosperity, Restore Our Future, and Crossroads GPS since September, yet he still captured 332 electoral votes. Polluters’ picks for the Senate also lost, including in heavily contested races in Montana, Ohio, Virginia, and Wisconsin, despite an impressive $60 million tally on TV ads. These same polluter interests also spent more than $50 million since September to influence House of Representatives races.

Voters have spoken in 2012 but the election is not the end of the efforts to obstruct clean energy, public health protections, and climate action. Oil, gas, and coal industries’ “branding” campaigns—a $7 million effort between September and November—have relaunched after the election. Groups such as the American Petroleum Institute—responsible for the “I’m an Energy Voter” campaign—and the American Coalition for Clean Coal Electricity have pumped millions of dollars more into ads protecting their special interests.

The map below shows the states that were polluter allies’ biggest targets in the final two months of the 2012 election.

Noreen Nielsen is the Energy Communications Director for the Think Progress War Room at the Center for American Progress Action Fund. Rebecca Leber is a Reporter/Blogger at the Action Fund.

by Nicole Ghio

With the release of its “Turn Down the Heat” report, it seemed the World Bank was finally ready to take the climate crisis seriously.

But while the World Bank may hate climate change, it still loves funding dangerous coal projects that destroy local communities and contribute to global warming. Now that it has come out openly with its concerns for climate it has to hide all that pesky coal lending.

Thus its new and creative way to make its rhetoric and actions match up — just don’t call it a coal plant!

Let me explain. The World Bank’s International Finance Corporation (IFC), along with the European Bank for Reconstruction and Development (EBRD) and several other international finance institutions (IFIs), are planning to finance roughly $4 billion of the $13 billion Oyu Tolgoi gold and copper mine. Outwardly, this is not a coal project — it’s just a huge destructive mine causing an uproar with local herders who filed a formal complaint challenging the project. But here’s the rub: After four years, the investor agreement explicitly requires the construction of a huge, dirty, new 450- 750 MW coal plant to power the mine.

And this is where things get really fun.  The World Bank is required to consider “associated facilities” when it finances projects. So even though the coal plant is clearly part of the project, the World Bank has pretended it wasn’t. That way it doesn’t have to follow its own rules for approving coal projects. Because after all, climate change is serious and the World Bank hates it.

Just how bad was this blatant attempt to flout the rules? Well, had the Bank considered this a coal plant, the institution’s “coal guidance” (the Strategic Framework on Development and Climate Change) would have required a panel of experts to analyze the project with a specific mandate to explore low-carbon alternatives. But the project’s contract explicitly requires a coal plant after four years. Why bother to analyze low carbon alternatives if you are contractually obliged to build a coal plant?

Ironically enough, the project documents do mention wind, but fail to analyze it, or any other source, as a viable alternative. And yes, wind is viable in Mongolia, very viable. In fact, Mongolia is not only trying to ramp up wind to combat severe pollution, a recent New York Times piece even cites this very project as ripe for wind development. It might make you laugh if it first didn’t make you want to cry.

Had the Bank bothered to assemble an expert panel, someone would have noticed that a number of violations were happening. (You can see our assessment here). In fact, they may have even found clean energy alternatives that the Bank could push for, or even finance. Heaven forbid! But maybe they didn’t want anyone digging into the details because exposing this dirty project would be squarely at odds with Dr. Kim’s attempt to lead on climate.

When the World Bank released its “Turn Down the Heat” report, Bank President Dr. Jim Yong Kim said it should “shock us into action.”

The real shocker is just how far the institution will go to hide its support for a dirty coal plant. With the Kosovo coal project already causing extreme controversy, our patience is wearing thin. Dr. Kim needs to make good on his rhetoric and move the World Bank beyond coal, now.

Nicole Ghio is a campaign liaison at the Sierra Club.

One of the world’s biggest mining firms says that extreme weather caused by climate change is already impacting some of its assets, thus forcing the company to re-evaluate its investments in the coal sector.

Speaking to investors and analysts on Monday, the Chief Executive of BHP Billiton’s coal division explained how the company is reinforcing infrastructure around its coal export terminal in Queensland, Australia because of increases in extreme weather that threaten the facility.

BHP Billiton is one of the largest producers of aluminum, copper, thermal coal, metallurgical coal, nickel, silver and uranium. The Australian company also owns and operates the Hay Point Services Coal Terminal, a coal facility that makes up a large portion of the biggest coal port in the world.

And now that facility is under threat from intensifying extreme weather, says BHP executive Marcus Randolph. His comments were reported in the Australian Financial Review after the company’s presentation on its sustainability strategy:

“As we see more cyclone-related events . . . the vulnerability of one of these facilities to a cyclone is quite high,” he said. “So we built a model saying this is how we see this impacting what the economics would be and used that with our board of directors to rebuild the facility to be more durable to climate change.”

Mr Randolph said the decision was taken after cyclone Yasi hit further north in Queensland in February 2011. “If cyclone Yasi had hit Hay Point, we would have lost that facility,” he said. “So it is a recognition that as these cyclones become more severe, we need to have facilities that are more able to withstand them.”

Simply reinforcing a coal export facility with extra jetties to withstand an increase in extreme weather caused by carbon pollution from the coal that the company wants to continue exporting isn’t exactly a ringing endorsement for sustainability. But this plain-spoken admission that climate change is having a measurable impact now — without trying muddle the science — is very unique for a coal company.

“You couldn’t ask for a more surprising source for our basic message: coal causes climate change, climate changes creates more extreme weather, more extreme weather will force us to make huge new investments in trying to protect ourselves,” said Carl Pope, former executive director of the Sierra Club, in an email.

In his presentation, Randolph made another stunning comment about the need to address carbon pollution by clearly stating that there is an “absolute ceiling” on emissions that can be pumped into the atmosphere:

BHP’s internal target over the next four years is to maintain its greenhouse gas emissions below 2006 levels, adjusted for material acquisitions and divestments. Mr Randolph said the target would stay even if a future government repealed the carbon tax.

“If you look at the targets . . . there is not a qualifier saying it is okay to emit more greenhouse gases if the carbon tax is eliminated,” he said. “An absolute ceiling is an absolute ceiling. Even if there isn’t a carbon tax, it still needs to be an issue we devote a lot of attention to.”

Just one month before, Randolph — the chief executive of the company’s coal division — told the Australian Financial Review that he believes the market for coal is going to decline because of environmental constraints, and that “frankly it should”:

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