Senate witnesses weigh in on impact of coal lease moratorium

The recent announcement by the Interior Department that it is suspending issuance of new coal leases on federal lands won’t have much of a short-term impact, but it could have longer-term implications, the Senate Committee on Energy and Natural Resources was told Jan. 19.

Interior Secretary Sally Jewell announced Jan. 15 that the Interior Department will launch a comprehensive review to identify and evaluate potential reforms to the federal coal leasing program.

During a Jan. 19 hearing on energy and commodity prices, Sen. John Hoeven (R-N.D.) asked various witnesses what impact the three-year lease suspension might have on markets.

Capital Alpha Partners LLC Managing Director James Lucier, Jr., said he has not prepared an analysis on moratorium. “But it points to assets that are being tied up through extended studies” and could lead to increased royalty fees and so forth, he said.

“But I think you need to watch what the administration is doing here in terms of all fossil fuels,” Lucier said. The precedent it sets “is quite substantial” and could conceivably lead to “programmatic environmental impact statements” for oil and other development on public lands, Lucier said.

Energy Information Administration (EIA) Administrator Adam Siemanski seemed to agree that there could be long-term implications. In 2014, for example, 42% of domestic coal production occurred on federal lands, the EIA official said.

Officials said the short-term impact of the moratorium will be small given there is already plenty of federal coal tonnage leased to coal producers.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.