Obama halts most new coal-mining leases on public lands

The U.S. Department of Interior said it is pushing the pause button on the federal coal program for three years in light of concerns raised by the Government Accountability Office, the agency’s inspector general and members of the public.

A new order will prevent coal companies from obtaining new leases that allow coal mining on federal lands. “These new reserves plus the reserves already under lease should offer an ample supply of coal in the coming years”.

The Department of the Interior says it wants to make sure the money it’s charging for coal leases takes into account both market prices and what’s often called the “social costs” of coal – its impact on climate change and public health.

Jewell assured the public that their energy needs would be met while the coal leasing review is underway, saying, “We are undertaking this effort with full consideration of the importance of maintaining reliable and affordable energy for American families and businesses, as well other federal programs and policies”.

Jayni Hein, policy director of New York University’s Institute for Policy Integrity, said the moratorium and review represent a major shift that helps modernize the federal coal leasing program.

Federal land accounts for over 40 percent of US coal production.

But new leases, such as two pending offers that would have made another 640 million tons of Wyoming coal available, will be suspended. It’s unclear what impact the moratorium will have on many coal companies given the declining domestic demand for coal and the closure of numerous coal-fired power plants around the country. “As we have looked state by state, the average is a 20-year run rate, at current production, off of coal mines now under lease”.

“With today’s announcement President Obama exerted groundbreaking leadership in the global movement to keep fossil fuels in the ground”, Erich Pica, president of the environmental group Friends of the Earth, said, in a statement welcoming the moratorium. Getting royalty rates right is especially important “given how much coal comes off federal land”, said Cantwell, the top Democrat on the Senate Energy and Natural Resources Committee.

The administration held hearings in Montana, Wyoming, Colorado and New Mexico a year ago on the federal coal program.

Almost 90 percent of coal tracts leased by the Interior Department receive just a single bid, and royalty rates have remain unchanged since 1976.

“We believe this review process is not warranted and is aimed at delaying leases to ensure the coal is never mined, denying its economic benefits to the nation”, Marshall said.

The environmental review, expected to span three years and ultimately be overseen by the next presidential administration, will include an evaluation of how extracting and burning coal affects climate change and assessments of where future coal leasing should take place, if at all. “The result was a federal coal program created to get as much coal out of the ground as possible, and in many ways that’s the program that we’ve been operating ever since”.

Government auditors for years have questioned the adequacy of the royalty rate and whether it provided an appropriate return to the government, although they did not make specific recommendations to raise it. Industry groups counter that any increase in royalty rates will hurt consumers and threaten high-paying jobs.

In his State of the Union address on Tuesday, Democratic President Barack Obama said he would “change the way we manage our oil and coal resources, so that they better reflect the costs they impose on taxpayers and our planet”.

U.S. Rep. Ed Whitfield (R-Ken.), chairman of the Energy and Power Subcommittee, accused Obama of “circumventing Congress” to “launch another unilateral attack on coal”.

Michael Brune, executive director of the Sierra Club, applauded the administration’s action. Michael Bennet, D-Colo., because the government’s coal-leasing program is broken and needs fix.

Federal officials say at least 30 applications from companies seeking to mine hundreds of millions of tons of coal face suspension as the government reviews sales of the fuel from public lands.