In 2013, when Republicans were pushing President Barack Obama to approve the Keystone XL pipeline, he pushed back, saying that "our national interest will be served only if this pipeline does not significantly exacerbate the climate problem."

Late last year, Obama rejected the pipeline entirely, saying: "Ultimately, if we're gonna prevent large parts of this Earth from becoming not only inhospitable but uninhabitable in our lifetimes, we're gonna have to keep some fossil fuels in the ground rather than burn them and release more dangerous pollution into the sky."

"We're gonna have to keep some fossil fuels in the ground." That is no small thing for a president to say. But which fossil fuels?

In some ways, Keystone was an easy test case — a project owned by a foreign company, built to ship foreign oil through the US, mostly for export.

Going forward, most federal decisions about fossil fuels and the national interest will be much trickier. One such decision is playing out in Colorado right now, a perfect representation of what happens when "keep it in the ground" meets an American community in need.

TL;DR

The US Forest Service created an exception to Colorado's Roadless Rule, giving the coal mining companies access to almost 20,000 acres of western Colorado wilderness. In 2014, a federal judge ruled that USFS had not done a sufficient environmental review of the exception; in particular, the agency had not accounted for climate impacts. The court vacated the mining exception. In November 2015, USFS released an updated environmental impact statement, which took into account greenhouse gases. It found that the climate impacts of extending mines into current roadless areas outweigh the value of the coal by many billions of dollars. USFS, under pressure from Colorado lawmakers, seems set to let the exception go ahead anyway. The public comment period on the new USFS decision ends on January 15.

Colorado has its own Roadless Rule, but it has a loophole

In 2012, the USFS officially adopted a Colorado Roadless Rule, which put 4.2 million acres of national forest area in the western half of the state under special protection. However, situated amidst all the national forests, in the North Fork Valley, were a number of longstanding coal mines and coal mining communities. After extended negotiations, the final rule included a notable loophole:

One such activity [important to the citizens and economy of Colorado] was continuing exploration and development of coal resources on the Grand Mesa, Uncompahgre, and Gunnison National Forests. The Colorado Roadless Rule addressed this concern by defining a 19,100-acre area as the North Fork Coal Mining Area, and developing an exception that allows temporary road construction for coal-related activities within that defined area.

Thus, an area was carved out where coal mining could continue, mostly in the Sunset Roadless Area, located southeast of Paonia, Colorado. USFS initially estimated that the exception represented access to 350 million tons of coal; in its latest estimate, it has downgraded that to 170 million tons.

Shortly thereafter, Arch Coal asked for an extension of its Elk Creek and West Elk mines into the mining zone; USFS granted it; environmentalists sued.

Late last year, in a potentially far-reaching judgment, US District Court Judge R. Brooke Jackson ruled against USFS and the Bureau of Land Management, saying they had violated the National Environmental Policy Act (NEPA) by failing to do a complete environmental review of the Roadless Rule loophole. Specifically, they failed to disclose the climate change impacts. Jackson instructed the agencies to return to the drawing board.

(This is another step in the long process of forcing federal agencies to take climate costs seriously in their day-to-day operations.)

The climate impacts of expanded coal mining in Colorado are substantial

In November 2015, the USFS released its updated Supplemental Draft Environmental Impact Statement. Among other things, it assesses both the direct and indirect emissions impacts of the mine expansions, "emissions that might result from the mining activity itself, as well as those that might result from activities that could occur after the coal is produced, including transportation of the coal and combustion in an industrial facility, most likely an electrical generating facility."

The agency ran three scenarios, based on three different rates of coal production from the new mine expansions. The low scenario assumed production from the mines would remain unchanged from 2014. The mid scenario modeled 10 million new tons of coal annually. The high scenario is based on both mines maxing out their legally allowed production (which neither has done, historically).

Here's the result:

So the expansions would yield between 15 and 30 million additional tons of carbon emissions a year.

(Note: To determine how the new coal would affect emissions, USFS had to figure out whether and how much it would displace other sources of energy. Long story short: Over a 35-year period, the new coal would displace 40,000 gigawatt-hours of renewable power and almost twice that much natural gas power. It's in Table 3-19 if you're interested.)

Importantly, the vast bulk of these emissions would come from the combustion of the coal, not the mining, venting of methane, or shipping:

The costs and benefits of mining depend on where you draw the boundary

In the final section of the EIS, the USFS tries to tally up the overall costs and benefits of the mine expansions.

The benefits include the value of the coal itself and the energy savings of burning cheap coal for electricity. The social costs were determined by multiplying carbon emissions by the "social cost of carbon" (the US government uses a social cost of carbon estimate developed by its own Interagency Working Group), using an average 3 percent discount rate.

Costs and benefits were then added up to a single "net present value" (NPV) for the Roadless Rule. If NPV is positive, benefits outweigh costs; if negative, the opposite.

The exact figures USFS came up with are less important than the pattern:

If it tallies up local costs and benefits — what it calls the "forest boundary" — NPV is positive under the whole range of assumptions.

When it tallies up national costs and benefits — the "national boundary," which includes climate damages in the US — results vary. NPV is negative at one end of the distribution and positive at the other end, depending on various assumptions about the social cost of carbon and discount rates.

When it tallies up global costs and benefits — the "global boundary," which includes all climate damages to the global economy — NPV comes out negative under virtually every set of assumptions.

In other words, the mine extensions make sense from a local perspective but not from a global perspective. From a national perspective, it's mixed.

Which costs? Whose benefits?

This case perfectly embodies the challenges of the "keep it in the ground" movement. Broadly considered, the costs of fossil fuel projects often outweigh their benefits. But how broadly should they be considered?

Residents of the North Fork area were understandably upset at the judge's ruling. Mining is a big part of the North Fork economy:

"The importance of mining in the North Fork is undeniable," says [Bob Randall of the Colorado Department of Natural Resources]. "It’s not only a major employer for the town of Paonia and Delta County and Gunnison County, but it’s an economic driver for the entire region."

The mining and extractive industries employ a fifth of Paonia's working-age males, and more still work in jobs (administrative, transportation, etc.) meant to support the mines.

Now the miners were being asked to shoulder responsibility for someone else burning the coal somewhere else.

"Who would have thought that they would have had to analyze the burning of coal in a power plant somewhere?" says Kathy Welt. She works at West Elk Mine, the mine most dependent on this exception. She’s been involved with the Roadless Rule since the beginning. She was upset that the process she labored through was overturned in court, upset that all this effort was going after North Fork coal. "If you’re going to have coal, and coal is part of our future no matter what folks say," says Welt, "why not be burning our coal? Little to no mercury, low sulfur, high heat value content: this is some of the best coal maybe in the world."

Welt might reasonably wonder why the residents of the North Fork region should be asked to sacrifice a large, tangible economic boost out of deference to damages caused at some point in the future, distributed over the entire planet. Why should North Fork make that sacrifice when few other mining communities are? Colorado Gov. John Hickenlooper doesn't think it's a good deal. Nor do North Fork officials. They are lobbying the USFS hard to reinstate the loophole.

And yet, it is concern for the entire planet that will eventually have to tip the scales in most decisions of whether to "keep it in the ground." It is only by including global costs that the true costs are revealed — but true costs, distant in time and space, do not carry the political weight of near-term benefits.

The comment period on USFS's rulemaking is open until January 15. This somewhat obscure agency decision, which has gotten little national press, will be a harbinger of things to come, an indicator of whether a national government will ever truly take the social cost of carbon seriously when assessing supply-side fossil fuel projects.

Addenda:

Couple of other things worth mentioning: