Enviro groups pressure feds for tighter coal leasing rules

At an event April 30 at the National Press Club, policy experts from the Sierra Club, the Natural Resources Defense Council, Center for American Progress, and law professor Mark Squillace called on the Obama administration to reform and modernize the federal coal leasing program.

Environmental groups have been trying for years, in and out of court, to force the federal government to do things like consider the greenhouse gas emissions when this coal is eventually burned in power plants within the coal leasing process. The vast majority of the coal in the western U.S., including in the highly-productive Powder River Basin in Wyoming and Montana, is produced from land leased from the federal government. There is limited coal leasing in the eastern U.S., usually of fairly small blocks of reserves underlying national forests.

The experts said that changes are urgently needed to ensure the U.S. is able to meet national carbon pollution reduction goals and that taxpayers receive a fair return on sales of publicly-owned coal. The event comes on the heels of a move by the Office of Natural Resources Revenue (ONRR) to consider updating royalty rate and leasing policies, and also acknowledgement from Secretary of the Interior Sally Jewell recently that it is “time for an honest and open conversation” about the federal government’s coal leasing practices and their impact on the climate.

The experts’ policy recommendations for reform include:

  • incorporating the social cost of carbon into coal leasing decisions;
  • getting greater transparency from the federal Bureau of Land Management (BLM), which administers the coal leasing process;
  • instituting a competitive bidding process between coal companies; and
  • improving a proposed rule to close existing loopholes that allow coal companies to underpay for coal mined on public land.

“We need to keep more dirty coal in the ground if the U.S. is serious about meeting the Obama administration’s climate reduction goals,” said Nathaniel Shoaff, staff attorney at the Sierra Club. “The BLM should consider the social costs of carbon pollution and use the tools available to quantify the economic harm caused by the release of each additional ton of carbon dioxide emitted into the atmosphere before rubber-stamping lease permits to mining companies.”

Public lands now account for 40% of coal mined in the U.S. Coal from the Powder River Basin fuels more than 230 power plants, linking it to 13% of U.S. greenhouse gas emissions. Future development of the estimated economically recoverable coal in the Powder River Basin could dramatically increase this number, releasing more than 10 times the pollution saved by new national fuel economy standards, the club said.

“Federal law requires the Bureau of Land Management to promote competition and ensure a fair return to the public when it leases federal coal to private coal companies,” said Mark Squillace, professor of law at the University of Colorado Law School. “Yet the BLM has abdicated its responsibility and allowed the coal industry to effectively drive the program. Not surprisingly, coal companies have found ways to avoid competition and pay pennies per ton for the federal coal that they buy.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.