During his final State of the Union Address, President Barack Obama vowed 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.”
Three days after that speech his administration made its first significant move in upholding that vow when it announced that it would halt new coal mining leases on public lands.
The move is a significant setback for the coal industry, effectively freezing new coal production on federal lands and sending a signal to energy markets that could turn investors away from an already flailing industry.
Last year, Obama used his executive authority under the Clean Air Act to complete regulations that would limit carbon dioxide emissions from coal-fired power plants, the nation’s largest source of planet-warming pollution. Republicans have attacked the rules, which could lead to the closing of hundreds of coal plants, as a “war on coal.” A halt to new leases would go even further by leaving coal unmined, The New York Times reported.
About 40 percent of the nation’s coal is mined on public land, and most of that land is in the Powder River Basin of Wyoming.
“It appears that they’re going after the federal coal leasing program with the intention of keeping coal in the ground,” said Luke Popovich, a spokesman for the National Mining Association.
Companies can continue to mine the coal reserves under lease, estimated to be enough to sustain current levels of production from federal land for about 20 years, according to the administration official, who spoke on the condition of anonymity because details of the plan had not been made public.
Obama hopes to make curbing climate change a cornerstone of his legacy. The administration’s planned action would be the latest step in his ambitious efforts to use his executive authority to tackle climate change, though it could be reversed by another president.
As the administration has sought additional ways to discourage production and consumption of the fuel most responsible for global warming, economists have proposed a “production fee” associated with emissions from coal. Administration officials have estimated that cost — tied to what they call the “social cost of carbon” — at about $40 per ton of carbon dioxide produced.
Officials at the Interior Department, which oversees the leasing of public lands to energy companies for fossil fuel extraction, have been reviewing for the past year possible updates to the leasing and royalty programs for mining and drilling on government lands.
In 2014, the federal government received about $1.2 billion in leases, royalties and other fees for coal mining on public lands, with a leasing rate of $3 per acre, plus royalties paid on the market value of the coal at the time of extraction.