In the spirit of his State of the Union address earlier this week, President Obama announced today that he would be temporarily suspending most coal mining on public lands. The executive order also called for the Department of Interior to initiate an immediate review of coal operations on federal lands with an eye toward determining “how to ensure American taxpayers are earning a fair return for the use of their public resources.” Given that the revenue from the leases benefits the coal companies while parks goers and the general public bear the negative externalities of coal mining and burning, one would expect the review to determine that coal mining on public lands is not in the public’s best interests.
The moratorium, which is immediate, is expected to affect:
- All new coal mining except for metallurgical coal (used in steel production)
- Most existing leases for future land use
It does not affect current leases where coal mining is currently happening. The moratorium is expected to last three years, which is the projected length of time it will take to for the department to conduct the review. Current coal mining is expected to sustain production levels for the next two decades.
Interior Secretary Sally Jewell said the president’s latest move will allow the country to fully review the impact of coal production on climate change.
“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,” said Jewell. “During this time, companies can continue production activities on the large reserves of recoverable coal they have under lease.” The secretary also said steps were in place to accommodate unforeseen circumstances, such as an emergency, “to ensure this pause [would not have any] material impact on the nation’s ability to meet its power generation needs.”
On Wednesday, the president called for the country to revisit the way it was investing in energy production.
“Rather than subsidize the past, we should invest in the future—especially in communities that rely on fossil fuels,” and promised to take further steps to encourage that change. “That’s why I’m going to push to change the way we manage our oil and coal resources, so that they better reflect the costs they impose on taxpayers and our planet.”
Today’s announcement is more bad news for the coal sector, which is already feeling the impacts of declining investment in the fossil fuel industry. The use of coal for electricity production has been declining in recent decades. In 2008, 50 percent of the nation’s energy was produced in coal-fired plants. By 2015, that number had dropped to just over 33 percent, heralding increasing calls for a review of the use of public lands for coal production.
“We haven’t undertaken a comprehensive review of the program in more than 30 years” Secretary Jewell noted last Friday, “and 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.”
About 40 percent of coal is mined on federal lands. Much of it is in Wyoming, Colorado, Illinois, Pennsylvania and Kentucky, and many companies have been finding it increasingly more difficult to stay in business. Arch Coal, based out of St. Louis, MO is the latest company to declare bankruptcy in response to declining revenues.
A 2014 Government Accountability Office study called into question the market value of the contracts on federal lands, and whether those conducted on Bureau of Land Management lands offer adequate transparency for public review.