Legislators eye lawsuit over coal port

CASPER — Wyoming lawmakers will try to set aside $250,000 to sue Washington state over coal, bypassing Wyoming’s attorney general and hiring a private lawyer, via a bill introduced Thursday in Cheyenne that largely mimics a failed measure last year.

Washington has effectively blocked a coal export terminal development by denying a state water permit. Wyoming — which wants an export terminal on the West Coast to get its coal to Asian buyers — has long maintained that Washington’s block is political: that the powers that be in Washington don’t like coal.

More to the point for the Cowboy State, people like Rep. Chuck Gray, R-Casper, say Washington’s block of the port constitutes a violation of Wyoming’s rights to sell its coal to Asia.

But, so far, Wyoming has failed to fight for its constitutional right to interstate commerce, said Gray, the legislation’s sponsor.

“This is a matter of high public importance and the attorney general’s office has not yet pursued the matter,” he said in an email Thursday, noting that Wyoming’s amicus brief filed last year in an industry lawsuit was not a strong enough approach. “There is enormous harm to the citizens of the state of Wyoming since this action has not been pursued.”

The bill will authorize a handful of lawmakers from each house who meet in between full sessions of the Legislature — the Joint Interim Minerals Committee — to utilize $250,000 to hire private counsel. Gray said the interim session is a good time for such a topic to come up for debate and that the matter could also be debated by the full legislature when the session starts in 2020.

Other sponsors include Sen. Bo Biteman, R-Ranchester, and Reps. Stan Blake, D-Green River; Aaron Clausen, R-Douglas; Scott Clem, R-Gillette; and Tyler Lindholm, R-Sundance.

Gray sponsored a similar bill last year, though that measure would have authorized the full legislature to make a decision to sue through a private lawyer, rather than the committee. That bill failed.

The representative from Casper was critical at the time of then-Gov. Matt Mead’s attorney general for not taking steps to sue. Attorney General Peter Michael did join Wyoming to an existing lawsuit against the state of Washington and the coastal state’s governor — more to voice the fact that a move against the port would impact Wyoming’s economic interests than to weigh in on the lawsuit’s central issue, fighting over a state water permit. Michael will be succeeded by recently elected Gov. Mark Gordon’s appointment Bridget Hill with lawmakers’ approval. That transition usually takes place at the end of the legislative session, according to the attorney general’s office.

Regardless of who is the attorney general, under Gray’s bill Wyoming could be suing Washington as early as next year.

It’s a bit late, said Shannon Anderson, a lawyer for the Powder River Basin Resource Council, a landowners group.

Anderson said her members were fiscally conservative and thus concerned about the expense of hiring private attorneys. She noted that $250,000 was likely a conservative amount considering the complexity of the case and wondered how the legislature — or the minerals committee — would oversee the potentially increasing costs.

In any case, the court and state agencies have already ruled — multiple times — against the port’s interests.

“It seems too little too late for it have an effect,” Anderson said. “It sounds more like sending a political message than (a bill) crafted in way that will make a difference.”

Anderson said there was some concern of Wyoming imposing its will on the freedom of Washington to choose policy for itself. The Powder River Basin Resource Council has in many instances advocated for a move away from coal power toward green energy and voiced concerns about worsening effects of climate change.

Gray’s bill is banking on an attorney — likely an expert in commerce law — to apply a tricky legal argument regarding the U.S. Constitution. The commerce clause of the Constitution gives Congress the authority over commerce with other countries, tribes and among states.

The inverse of that — unstated but implied — is that states cannot behave in a way that discriminates against interstate commerce. That is the dormant commerce clause.

That’s not an easy argument to make in this case, said Sam Kalen, co-director of the Center for Law and Energy Resources in the Rockies at the University of Wyoming.

“What the court has effectively said is that states can’t discriminate on their face, in their purpose or in effect against interstate commerce,” Kalen said.

The most likely approach for Wyoming, or a lawyer on Wyoming’s behalf, would be to argue that “in effect” Washington has discriminated against interstate commerce, because the other tests of whether the dormant commerce clause is being violated don’t appear in this case, Kalen said.

Asked whether his bill undermined Wyoming’s strong state’s rights beliefs by infringing on Washington’s, Gray said the opposite was true. The commerce clause was written with a very similar situation in mind, protecting interior states’ right to export through exterior states.

Kalen had a different interpretation of the founders’ intent with the commerce clause. They were mostly concerned about “imposts and fees on goods coming from other states, as well as foreign commerce and then how those goods would travel from state to state,” he said.

In terms of the clause’s inverse, the founders’ intent is not clear and the topic is contested among academics, Kalen wrote in an article in the Valparaiso University Law Review in 2015.

“Two hundred years of academic and judicial commentary have yet to produce even marginal consensus into what the framers expected about the commerce clause’s role in restricting the rights of the states and local communities,” he wrote.

Wyoming has not been successful in marketing its coal to Asian markets, though talk of getting the Powder River Basin rock burning in Asian power plants goes back through a number of Wyoming governors. The coal is good for the job, but the cost of rail transport to the coastal ports in Canada has depressed the opportunity for Wyoming coal to get overseas, argue proponents of the idea, like Gordon.

Detractors argue that the economics are not good enough in any case, which is why Montana gets some coal across the sea and Wyoming does not.

Still, the port represents a deeply contentious issue for the state, reflective of the growing pressure on Wyoming from a rapidly faltering domestic market for one of its keystone industries. On Thursday, the Energy Information Administration’s released its Annual Energy Outlook. It projected — with no policy or regulator changes — coal’s role in the electricity mix falling to 17 percent by 2050. That’s down from half of the country’s power production 15 years ago.

Wyoming is largest coal producing state in the country, by far, and its customer base is shrinking.