Obama administration halts new coal leases

The DOI review is expected to take about three years to complete.

Angering coal supporters, the Obama administration announced a temporary ban on new coal leases on federal lands Friday as part of a broad environmental and economic review of the nation’s federal coal program.

Interior Secretary Sally Jewell speaks at the Interior Department in Washington, D.C in Novemeber 2015.

The plan includes a pause in new coal leases under most circumstances while government officials undertake a top-to-bottom review of how the federal coal is structured and administered.

Environmentalists cheered the move, with billionaire hedge fund manager and clean energy promoter Tom Steyer praising Obama in a statement for “leveling the playing field and ending the fossil fuel industry’s unfair advantage”.

The moratorium is limited to new lease applications, which have waned in recent years as coal companies struggled to compete with cheap natural gas and a wave of new environmental regulations.

“We have an obligation to current and future generations to ensure the federal coal program delivers a fair return to American taxpayers and takes into account its impacts on climate change”, Jewell said on a conference call.

Taxpayer-owned federal lands supply roughly 40 percent of all USA coal production, and mining under existing leases will continue during the review. Coal companies also pay a $3 fee annually for each acre of land leased.

Environmental groups applauded the new policy.

Jewell added, “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”.

It’s unclear what impact the moratorium will have on USA coal production, given the declining domestic demand for coal and the closure of numerous coal-fired power plants around the country.

“Today the Department of Interior announced a moratorium on new coal leases on federal lands”. At current rates, those mines are set to be exhausted within 20 years.

“The ramifications for the country will be bad: lost growth, lost jobs, and lost revenue that would have gone to schools, bridges, and roads”, Ryan said.

In a statement, Colorado Mining Association President Stuart Sanderson said that “the action will discourage the development of coal reserves and will actually reduce the amount of royalties paid and returned to the state”.

“Every ton of coal, every drop of oil that comes out of our public lands will be burned and worsen climate change – setting the stage for more heat waves, freak storms, rising seas and droughts”, Spivak said.

“I’m glad to see the president take this action”, Cantwell said. “That rule to us looks like it’s meant to more immediately stop federal coal mining”.

The Obama administration decision Friday to halt new coal leases on federal lands amid a program overhaul only “attacks middle-class jobs and punishes the poor”, Senate Majority Leader Mitch McConnell said.

Multiple members of Utah’s congressional delegation decried the decision and said it puts America’s energy portfolio in jeopardy. “This president is trying to do just the opposite”, he said. Instead, she said, more people are embracing cleaner, renewable energy.

The federal program to lease coal-mining rights to a single bidder has remained largely unchanged for decades, despite complaints that low royalty rates and a near-total lack of competition have cost the government hundreds of millions of dollars a year. In 2013, around 16.9 million tons of coal was produced. “The coal industry, coal workers and communities, and the public deserve answers to the many questions that create uncertainty for this source of energy”. “The goal of this review should be to create a program that strives for transparency and fulfills the fiduciary responsibility of the department to manage these public resources on behalf of taxpayers”. It will kick off with public sessions in early 2016 to help determine the precise scope of the review.