Feds announce moratorium on new coal leases

Interior Department will examine the federal coal program in light of climate change.

 

The Interior Department announced Friday an immediate moratorium on new federal coal leases, as it undertakes a multi-year review of a program that provides about 40 percent of the coal used for electricity nationwide. The announcement came just days after President Barack Obama said in his State of the Union address that he was going to push to change the way the country manages its oil and coal “so that they better reflect the costs they impose on taxpayers and our planet.”

Aerial view of Black Thunder Coal Mine in Wyoming. One of the biggest producers of federal coal.
EcoFlight
 

Until now, the Obama administration largely managed federal coal as if climate change did not exist. Interior Secretary Sally Jewell conceded as much in a conference call with reporters Friday, saying the program “was really about getting as much coal out of the ground as possible” and had been that way for 30 years. Now she and White House officials say the program should be updated to reflect the impact that coal-burning has on the climate and to ensure that taxpayers and local communities near the mines get a fair share from that public coal.

This announcement comes after the countries of the world agreed in Paris in December to work together to reduce greenhouse gas emissions. Coal is the dirtiest source of electricity in terms of greenhouse gases and other air pollution. Jewell in March put the industry on notice, saying she was considering updating the federal coal program with climate change in mind. She held five listening sessions this summer, including one in Washington, DC and another in Gillette, Wyoming.

ScreenShot20160115at5.02.09PM.png
Interior Secretary Sally Jewell
Interior Department

Coal industry representatives say the administration was ignoring them if it concluded that the right thing to do was to make it even more costly and cumbersome to mine federal coal. “It is stunning that the administration believes a process that already pushes the development of coal projects beyond a decade needs more red tape and delays,” says Hal Quinn, the president and CEO the National Mining Association.

“This is yet another salvo in the president’s efforts to kill the coal industry. He and his allies in the extreme environmental movement know full well that this measure will make federal coal uneconomical to mine, thereby locking up America’s most abundant and reliable source of electricity generation,” Wyoming Mining Association Executive Director Jonathan Downing says.

Jewell and others in the administration said that companies already have access to plenty of coal through leases they already hold and predicted that the moratorium should have no impact on production. Exceptions will be made, for instance, if mines are close to running out of coal. Independent experts confirmed that there is enough coal already leased to keep operations busy for at least 10 years in Wyoming, where the vast majority of federal coal is mined. “The real issue here is that no coal company is really in a position to buy more leases right now, given the market,” says Robert Godby, an economist at the University of Wyoming. 

On the other hand, the outcome of the review could be very consequential to the coal industry, in a process Jewell says would take three years.

Among other issues, the review will consider whether royalty rates should be changed. Concerns about taxpayers not getting enough return on federal coal were raised in reports in recent years by the Government Accountability Office and the Interior Department’s Inspector General. Environmentalists and former administration officials argue it should be raised to reflect the cost to society of burning coal. Local citizens near the mines argued against raising royalties for fear of losing jobs. Some from the mining industry say the royalties already are above market rates and increases could drive them out of business and threaten the reliable supply of coal. The review also will consider the agency’s practice of discounting royalties in response to companies’ requests.

Another issue to be addressed by the review is whether the companies pay too little for coal leases because there is only one bidder for about 90 percent of lease sales.

With only a year to go in the Obama administration, the next president and his or her appointees will have sway over the outcome. Democratic frontrunner Hillary Clinton has suggested that she would put new fees on coal and help retrain coal workers. Republicans generally support the coal rules as they are and accuse Obama of conducting a war against the industry with air pollution regulations and the Clean Power Plan.

Environmentalists, who increasingly have put pressure on the administration to fight climate change by stopping the extraction of fossil fuels, exalted in the news of the moratorium and the review. “It’s time to keep our publicly owned coal in the ground and stop letting coal companies profit off the destruction of our planet,” said Jeremy Nichols of WildEarth Guardians, who has repeatedly sued the federal government over its coal leasing program.

These actions were not unprecedented. Presidents Richard Nixon and Ronald Reagan launched moratoria on coal leasing when they reviewed the federal coal program in the 1960s and 1980s.

The leasing moratorium and uncertainty sparked by the review further vex a beleaguered industry. Two of the biggest U.S. coal companies, both big players in federal coal, have filed for bankruptcy protection in recent months, swamped in debt from bad investments and hampered by the low price of natural gas and by state and federal air pollution regulations. So, despite their protests, Godby says, “The cost impacts of this decision will not really be felt for years, and coal has all the trouble it can handle with market conditions right now.”

Elizabeth Shogren is HCN's DC Correspondent.  

High Country News Classifieds
  • OLIVERBRANCH CONSULTING
    Non-Profit Management Professional specializing in Transitional Leadership, Strategic Collaborations, Communications and Grant Management/Writing.
  • SAGE GROUSE CCAA COORDINATOR
    The Powder Basin Watershed Council, headquartered in Baker City, Oregon, seeks a full-time Sage Grouse CCAA Coordinator. This position is part of a collaborative effort...
  • MARKETING COMMUNICATIONS MANAGER
    High Country News, an award-winning media organization covering the communities and environment of the Western United States, seeks a Marketing Communications Manager to join our...
  • EXECUTIVE DIRECTOR - OKANOGAN LAND TRUST
    Executive Director, Okanogan Land Trust Position Announcement Do you enjoy rural living, wild places, family farms, challenging politics, and big conservation opportunities? Do you have...
  • GREAT VIEWS, SMALL FOOTPRINT
    Close to town but with a secluded feel, this eco-friendly home includes solar panels, a graywater reuse system, tankless hot water, solar tubes, and rainwater...
  • EXECUTIVE DIRECTOR
    Powder River Basin Resource Council, a progressive non-profit conservation organization based in Sheridan, Wyoming, seeks an Executive Director, preferably with grassroots organizing experience, excellent communication...
  • COMMUNITY ORGANIZER- NORTHERN PLAINS RESOURCE COUNCIL
    Organize with Northern Plains Resource Council to protect Montana's water quality, family farms and ranches, & unique quality of life. Starts $35.5k. Apply now- northernplains.org/careers
  • BEAUTIFUL, AUTHENTIC LIVE YULE LOG CENTERPIECE
    - beautiful 12" yule log made from holly wood, live fragrant firs, rich green and white holly, pinecones and red berries. $78 includes shipping. Our...
  • CRAZY HORSE MEMORIAL DIRECTOR OF PROGRAMS FOR THE INDIAN UNIVERSITY OF NORTH AMERICA
    Crazy Horse Memorial, in the Black Hills of South Dakota, is currently accepting applications and nominations for the Director of Programs for The Indian University...
  • CRAZY HORSE MEMORIAL® MANAGER OF RESIDENCE LIFE FOR THE INDIAN UNIVERSITY OF NORTH AMERICA®
    Crazy Horse Memorial is currently accepting applications for the Manager of Residence Life for The Indian University of North America. This position is responsible for...
  • EXECUTIVE DIRECTOR
    Are you an art lover who dreams of living in the mountains? Is fundraising second nature to you? Do you have experience managing creative people?...
  • EXECUTIVE DIRECTOR
    The Public Lands Foundation, a non-profit organization supporting the multiple-use management of public lands managed by the Bureau of Land Management, seeks an experienced leader...
  • COLD WEATHER CRAFTS
    Unique handmade gifts from the Gunnison Valley. Soy lotion candles, jewelry, art, custom photo mandalas and more. Check out the website and buy Christmas locally...
  • EXECUTIVE DIRECTOR
    North Cascades Institute seeks their next Executive Director to lead the organization, manage $4 million operating budget, and oversee 60 staff. Send resume/cover letter to...
  • EDITOR-IN-CHIEF
    High Country News, an award-winning media organization covering the communities and environment of the Western United States, seeks an Editor-In-Chief to join our senior team...
  • LENDER OWNED FIX & FLIP
    2 houses on 37+ acres. Gated subdivision, Penrose Colorado. $400k. Possible lender financing. Bob Kunkler Brokers Welcome.
  • HISTORIC LODGE AND RESTAURANT - FULLY EQUIPPED
    Built in 1901, The Crazy Mountain Inn has 11 guest rooms in a town-center building on 7 city lots (.58 acres). The inn and restaurant...
  • POLLINATOR OASIS
    Seeking an experienced, hardworking partner to help restore a desert watershed/wetland while also creating a pollinator oasis at the mouth of an upland canyon. Compensation:...
  • ELLIE SAYS IT'S SAFE! A GUIDE DOG'S JOURNEY THROUGH LIFE
    by Don Hagedorn. A story of how lives of the visually impaired are improved through the love and courage of guide dogs. Available on Amazon.
  • COMING TO TUCSON?
    Popular vacation house, furnished, 2 bed/1 bath, yard, dog-friendly. Lee at [email protected] or 520-791-9246.