ST. GEORGE – The U.S. Department of the Interior announced a moratorium Friday on new coal leases on public lands while a review of the federal coal leasing program takes place. The program needs to be modernized and it has been more than 30 years since the last comprehensive review took place, according to federal officials.
“This is another step along the path that President Obama announced in Tuesday’s State of the Union address to improve the way we manage our fossil fuel resources and move the country towards (sic) a clean energy economy,” federal officials said in a press release Friday.
Interior Secretary Sally Jewel said federal officials understand coal will continue to be an important energy source for the county for years to come, even as the push for cleaner energy sources moves forward. However, the review of the federal leasing program is needed to considered the environmental impacts of coal mining, among other factors.
“The review … will take a careful look at issues such as how, when, and where to lease; how to account for the environmental and public health impacts of federal coal production; and how to ensure American taxpayers are earning a fair return for the use of their public resources,” federal officials said in the press release.
The moratorium itself affects new coal leases on public lands, which, according to The Associated Press, is where more than 40 percent of the country’s coal production occurs – about 450 tons a year – and which brings in more than $1 billion annually.
Nearly 90 percent of coal tracts leased by the Interior Department receive just a single bid, and royalty rates have remained unchanged since 1976. The lack of competition and other problems in the leasing program have cost the government as much as $200 million a year in lost revenue, according to a 2014 report by the Government Accountability Office.
Even so, environmental groups cheered the announcement. The groups have long said the government’s 12.5 percent royalty rate for coal mining on federal land encouraged production of a “dirty” fuel that contributes to global warming.
“Given serious concerns raised about the federal coal program, we’re taking the prudent step to hit pause on approving significant new leases so that decisions about those leases can benefit from the recommendations that come out of the review,” Jewell said.
However, preexisting production will be allowed to continue, Jewel said:
During this time, companies can continue production activities on the large reserves of recoverable coal they have under lease, and we’ll make accommodations in the event of emergency circumstances to ensure this pause will have no material impact on the nation’s ability to meet its power generation needs. 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 U.S. coal production, given declining domestic demand 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 in Wyoming, Montana, Colorado, Utah and New Mexico, The Associated Press reported.
Current levels of production are estimated to be able to sustain the nation’s power needs through the next 20 years, according to the Interior Department.
While some applaud the government’s actions, others decry it, saying it will cause many to lose their jobs and power rates to go up.
Sen. Maria Cantwell, D-Washington, said taxpayers are being shortchanged on royalties that do not reflect the true costs of mining, both in terms of its economic value to mining companies and its impact on the environment, The Associated Press reported. 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.
“I’m glad to see the president take this action,” Cantwell said. “We need to stop the sweet deal (mining companies) have been getting.”
Michael Brune, executive director of the Sierra Club, applauded the administration’s action.
“The coal-leasing program is broken, outdated and does not consider the threat of climate change in our communities,” Brune said. “Thanks to the Obama administration’s leadership, we can proudly say that Big Coal’s destructive reach over our public lands is coming to an end.”
Some members of Utah’s congressional delegation are not so enthusiastic about the moratorium.
Rep. Chris Stewart, R-Utah, called the announcement “absurd.”
“It is liberal fantasy-land at its worst and I will fight it every way I can,” Stewart said.
“Everyday (sic), I work for policies that increase energy production, create new jobs and decrease our energy bills. This president is trying to do just the opposite,” he said.
Rep. Rob Bishop, R-Utah, chairman of the House Natural Resources Committee, said the moratorium on coal leases shows that Obama’s oft-repeated claim to support an “all-of-the-above” energy agenda “was an election-year lie.”
“Unfortunately, the president’s bid to solidify his legacy with the extreme left will come at the expense of America’s energy needs and will make the lives of people more expensive and more uncomfortable,” Bishop said.
Around 80 percent of the electricity generated in Utah comes from coal, according to the Bureau of Land Management.
Utah is home to seven operating coal mines that produce coal from 71 leases on public lands. In 2013, around 16.9 million tons of coal was produced. It is also estimated that the coal produced during fiscal year 2014 had a sales value of more than $57 million and royalty revenues of more than $41 million.
The review will include extensive opportunities for public participation. It will kick off with public sessions in early 2016 to help determine the precise scope of the review.
The Interior Department will release an interim report by the end of 2016 with conclusions about alternatives that will be evaluated and, as appropriate, any initial analytical results. The full review is expected to take approximately three years.
- More details about coal mining in Utah can be found on the BLM-Utah website
- History of coal mining in Utah can be found on the Utah History to Go Web page, Old King Coal—A Long, Colorful Story
The Associated Press contributed to this report.
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