In his latest effort to secure his legacy as having actually done something about climate change, on Friday President Obama will order the federal government to cease issuing new leases for coal mining on public land, an administration official tells the New York Times. Royalty rates under the coal leasing program, however, have not been updated in decades and have always been criticized for vastly undervaluing coal.
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An administration official says companies will continue to be able to mine the coal reserves already under lease.
The impact of the moratorium is unclear given the declining domestic demand for coal.
President Barack Obama on Tuesday said he would seek changes in the way US oil and coal resources are managed, prompting a flood of reaction from environmental groups pushing him to do more to limit fossil fuel production – and producers anxious about regulatory changes.
“I am pleased the president noted the need to recalculate the true costs of federal coal and ensure that the American taxpayer gets proper value for this resource”, Cantwell said in a statement following Obama’s address.
The U.S. government shares coal-lease revenue with the states where the land is located. The vast majority comes from Wyoming, Montana, Colorado, Utah and New Mexico.
Meanwhile, David J. Hayes, a senior fellow at the liberal-leaning Center for American Progress, said Thursday the current rules for coal mining on federal lands were written when people could still smoke on planes and dump sewage in the ocean. Regulators will also be forced to consider how much new coal mines would contribute to global warming before approving any federal leases.
As Obama nears the end of his final term, the reform of fossil fuel leases is one of the last major actions he can take to curb emissions, following on from the adoption of new fuel and energy efficiency standards and the introduction of his wide ranging Clean Power Plan.
Separately, the Obama administration is considering increasing royalty rates and other fees paid by oil and gas companies using federal lands in the form of an advanced notice of proposed rulemaking (RIN 1004 – AE41) issued by the Interior Department in April (74 ECR, 4/17/15). This announcement follows the president’s announcement this week in his State of the Union address that he will push for change in the way coal resources are managed “to better reflect the costs they impose on taxpayers and the planet”.
House Speaker Paul Ryan (R-Wis.) blasted the move as an attack on communities that rely on coal mining for their economies.
Sierra Club executive director Michael Brune said, “The Sierra Club applauds President Obama and Secretary Jewell for their leadership in reforming the federal coal leasing program and putting an immediate stop to all new and modified coal leasing”.
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A wide range of economists, fiscal responsibility groups and environmental advocates have supported big changes to the government’s coal leasing program.
