Obama halts new coal leases on federal land

Matthew Daly
Associated Press
A house-sized dump truck hauls dirt and rock in 2013 at a coal mine in northeast Wyoming’s Powder River Basin. The Obama administration is halting new coal leases on federal lands until it completes a review of fees charged to mining companies.

WASHINGTON - The Obama administration is halting new coal leases on federal lands until it completes a comprehensive review of fees charged to mining companies and coal mining’s impact on the environment.

Interior Secretary Sally Jewell said Friday that companies can continue to mine coal reserves already under lease. The leasing program has not been significantly changed in over 30 years and needs to be modernized to ensure a fair return to taxpayers and to account for climate change, Jewell said.

“It is abundantly clear that times are different than they were 30 years ago, and the time for review (of the coal leasing program) is now,” Jewell told reporters in a conference call.

Officials also need to take into account new data on the impact of fossil fuels on the environment and on climate change, Jewell said.

Roughly 40 percent of the coal produced in the United States comes from federal lands. The vast majority comes from Wyoming, Montana, Colorado, Utah and New Mexico.

It’s unclear what impact the moratorium will have on U.S. coal production, given the declining domestic demand for coal and the closure of numerous coal-fired power plants around the country. Coal companies have already stockpiled billions of tons of coal on existing leases.

Even so, environmental groups cheered the announcement. The groups have long said the government’s fee rates for coal mining on federal land encouraged production of a product that contributes to global warming.

The administration held a handful of public hearings last year to get feedback on the adequacy of the fees charged to companies for coal mined on federal lands. The government collects a 12.5 percent royalty on the sale price of strip-mined coal, a rate that was established in 1976. The money is then split between the federal government and the state where the coal was mined. Coal companies also pay a $3 fee annually for each acre of land leased.

Sen. Maria Cantwell, D-Wash., said taxpayers are being shortchanged on royalties that do not reflect the true costs of mining, in terms of both the economic value derived by mining companies and mining’s impact on the environment.

President Barack Obama said during the State of the Union address that he would push to change the way the federal government manages its oil and coal resources.

Rep. Rob Bishop, R-Utah, chairman of the House Natural Resources Committee, said the moratorium on coal leases shows that Obama’s repeated claim to support an “all-of-the-above” energy agenda “was an election-year lie.”

The administration “should be putting our nation on the path of continued energy strength — not undermining our energy security at the bequest of radical environmentalists who wish to keep our resources under lock and key,” Bishop said.

House Speaker Paul Ryan, R-Wis., said coal on federal land “belongs to all Americans,” and Obama is “denying people access to their own abundant, low-cost energy source.”