United States Vice President Mike Pence declared "the war on coal" over Friday after touring a Crow Indian coal mine on horseback and meeting with stakeholders.
"I just want to assure you that this administration is absolutely determined to continue to expand the opportunities to develop American energy in an environmentally responsible way," Pence said.
The vice president gathered with Crow tribal leaders and coal supporters at Absaloka Mine’s headquarters on the Crow Reservation.
The mine is operated by Westmoreland Coal under lease with the Crow. Pence spent the afternoon at the mine before returning to Billings for an evening rally at MetraPark to support Republican U.S. House candidate Greg Gianforte, who was not part of the mine visit.
The visit was all cowboys and coal with Interior Secretary Ryan Zinke, Montana's U.S. representative before joining President Donald Trump's cabinet in March, leading Pence and a dozen riders through a grassy mine reclamation area.
U.S. Sen. Steve Daines, R-Mont., was in the posse. The horsemen trotted to a hilltop to overlook a rolling, spring green landscape, then clustered around Pence and Carlson "Duke" Goes Ahead, Crow vice chairman.
Goes Ahead told Pence that coal was crucial to more than the Crow economy.
"Our coal has impacted all the surrounding areas, Billings, Hardin; it impacts their economies, too," Goes Ahead said.
The vice chairman said federal coal policy, particularly the Indian Coal Production Tax Credit, which is at perpetual risk of expiring, needed better support. After staying on the books for several years the tax credit expired in 2013. Since then, Congress has retroactively renewed the credit at the end of the year, but the uncertainly of the tax credit's status has been discouraging for Westmoreland.
On the Crow Indian Reservation — where state labor statistics suggest unemployment is 25 percent — households with coal mining income can earn more than $70,000 a year. The coal income tax credit gave Westmoreland Coal Co. $2.26 for every ton of coal it mined.
"The expiration of that tax credit made it a lot more difficult for us to invest in this mine," said Kevin Paprzycki, Westmoreland’s CEO.
Daines told Pence there was a bill in the Senate to make the tax credit permanent. He introduced the bill with Montana's Democratic senator, Jon Tester, in April.
The tax credit lowers the production price of Absaloka Mine coal, which keeps the mine viable.
The coal mined by Westmoreland under lease with the Crow Tribe fuels the Sherburne County Generating Station, or SHERCO plant, in Becker, Minnesota.
Pence's visit to Montana was the first by a current vice president since Dick Cheney visited Billings in 2006 to campaign for former U.S. Rep. Denny Rehberg. It wasn't lost on Daines that the visit started in Crow country.
"The plane landed today in Billings and the very first stop of the vice president to Montana was to Crow country and to coal country and this says a lot," Daines said. "The administration is thinking about the future. Montana has more recoverable coal than any state in the United States. There's tremendous potential here and it's a lifeblood right now for the Crow Tribe. They say coal keeps the lights on, I tell you it's lights out for the Crow Tribe if we lose these coal jobs."
As Interior secretary, Zinke oversees natural resource leasing on federal lands, the Bureau of Indian Affairs, national parks and conservation.
Friday, from the moment he arrived on the tarmac at Billings Logan International Airport, Zinke emphasized the importance of energy development, to national parks and the Land and Water Conservation Fund.
LWCF dollars are federal funds available to states for improvements that benefit outdoor recreation. The funds received by Montana are typically split between improvements at state park sites and a grant program to benefit outdoor recreation facilities in Montana communities. The money comes from federal offshore oil and gas drilling revenue.
"If you go back to 2008, we made $18 billion in offshore," Zinke said of federal oil revenue. "Last year, we were $2.6 billion. We've lost per year, about $15.5 billion in revenue.
"So the next time someone talks about the Park Service being $12 billion behind in infrastructure and maintenance, I can tell you $15.5 billion in revenue pays for a lot of maintenance. And the LWCF program, which everyone loves in Montana, that's where it gets the funds."
Zinke said the United States needs to develop all of its energy options.
Earlier this year, at Trump's directive, the Interior secretary lifted the moratorium on coal leasing. The moratorium was initiated by the Obama administration so it could study whether the public was getting a fair price for its coal through royalty payments. Coal's environmental impacts were also to be studied.
Coal has been in an economic slump for more than two years, as U.S. power plants switch to cheap natural gas and a global market glut makes shipping U.S. coal abroad unprofitable. One planned Montana coal mine failed after Arch Coal filed for bankruptcy. Other Montana coal companies ceased coal exports after market prices fell too low to cover shipping costs.
Last August, the Crow Legislature agreed to cut the tribe’s share of profits from tribal coal mined by Westmoreland, a move the coal company said was needed to keep the mine running.
Westmoreland had informed the tribe that the mining company was prepared to terminate its lease by last Oct. 17 unless the Crow agreed to a coal pay cut. The letter cited a plan “to reduce tribal payments in order to maintain the economic viability of the Absaloka Mine.”
Worried the mine would close, the Crow Legislature agreed to lower Westmoreland’s payment of the Tribal Severance Tax by 85 cents a ton. It then agreed to cut the amount Westmoreland paid in the Tribal Gross Proceeds Tax by 40 cents a ton.
Declining coal revenue has cut Crow government funding significantly. There have been layoffs as the tribe deals with the coal economy downturn.