On Nov. 2, U.S. Sen. Maria Cantwell, D-Wash., ranking member of the Senate Energy and Natural Resources Committee, joined with seven other senators to send a letter to Secretary of the Interior Sally Jewell asking for reforms to the federal coal reserve leasing program that would add climate change to the environmental issues looked at when making leasing decisions.
In the letter, the senators urged the Interior Department to reduce carbon emissions from publicly-owned coal and to ensure a fair return to U.S. taxpayers. With federal lands consistently providing 40% of U.S. coal production, most particularly in the Powder River Basin in Wyoming and Montana, the federal government plays the most important role of any single landowner in determining the shape of U.S. coal markets, they said. In fact, one recent estimate concluded that federal coal is responsible for 14% of all energy-related U.S. carbon pollution.
But until the market price for coal reflects its true cost to society, taxpayers will continue to bear the price of more extreme weather, collapsed ecosystems, stranded infrastructure, increased incidences of heart and lung disease, and other effects of climate change, the senators wrote. As such, the senators called for the Obama Administration to develop a plan that would both mitigate the negative impacts of federal coal and ensure a fair return to the public. The senators also urged Interior, which oversees the Bureau of Land Management, which does the actual coal leasing, to use existing authority under the Mineral Leasing Act and the Federal Land Policy and Management Act to begin to address the impact of federal coal on climate change.
“We must be much more aggressive in reforming the outdated federal coal program. Taxpayers deserve a fair return on the sale of resources that they own, but the current program is broken,” Sen. Cantwell said. “The Interior Department must eliminate loopholes and better account for carbon pollution.”
“Our federal coal program isn’t accounting for the full cost of coal mined from public lands. Communities across New Mexico and future generations will bear the consequences of extreme weather changes and public health challenges if we don’t lead by example to reduce carbon pollution from burning coal. I urge the Interior Department to use its authority to modernize our federal coal program to ensure that taxpayers are receiving a fair value for federal coal by factoring in the cost to public safety and health. We must take our moral responsibility as stewards of this planet seriously and create a healthier environment for everyone,” said Sen. Martin Heinrich, D-N.M.
“Recent nonpartisan investigations into the federal coal program have shown that we are allowing companies to mine this coal, owned by the American people, at bargain basement prices,” said Sen. Ed Markey, D-Mass. “This de facto subsidy to mine public coal has the potential to undermine our nation’s goals and the progress we have achieved in reducing carbon pollution. As world leaders prepare to meet in Paris to forge the next international climate agreement, we need to make sure that we are not subsidizing coal companies to mine this coal and export increasing quantities of it abroad, where it will be burned to worsen climate change.”
Environmental groups, including WildEarth Guardians, have tried for years to get federal courts to order Interior and BLM to include climate change in coal leasing decisions, but without success so far. A companion effort has been to try to boost the price to lease federal coal, which is not so much about boosting federal revenue and is more about making coal mining on federal lands too costly to be economic.
If the Interior Department is truly listening for the best way to maximize revenue to taxpayers from the federal coal lease program, it will lower the cost of mining federal coal, said National Mining Association CEO and President Hal Quinn in July 29 testimony at a Washington, D.C. “listening session” on the coal lease program, the first of several announced by Interior Secretary Jewell. Royalty rates on federal coal are already above market, said NMA. The current royalty is 40% higher than prevailing rates for private coal leases, Quinn noted.
Jewell announced July 9 that BLM would host this series of listening sessions on the federal coal leasing program. Jewell first called for a dialogue on the issue in remarks at the Center for Strategic and International Studies earlier this year.
“As I’ve said, it’s important to have an honest and open conversation about modernizing the federal government’s coal program,” said Jewell in the July 9 announcement. “I have heard many concerns about how the federal government leases coal, the amount of royalty charged and whether taxpayers are getting a fair return from public resources. These listening sessions are an opportunity to better understand how taxpayers, stakeholders and local communities perceive the federal government’s coal program today and how we can improve and strengthen it for future generations.”