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More than 30 coal projects could be impacted by moratorium on new leases
January 18, 2016

The moratorium on new mining leases on federal lands announced by the Obama administration on Jan. 15 (ME online, Jan. 15) will affect at least 30 active applications from companies seeking to mine hundreds of millions of tons, The Associated Press reported.

The freeze on new leases comes as the government reviews its sales of the fuel from public lands and leases will be on hold for at least three years while the Interior Department reviews fees paid by mining companies and the environmental effect of burning coal, agency Secretary Sally Jewell said.

The Associated Press obtained a Bureau of Land Management list of affected sites ahead of its public release, and it includes mining proposals in nine states.

Some of the largest projects are in the Powder River Basin of Wyoming and Montana, the nation’s top coal-producing region. Other projects are in Utah, Kentucky, Alabama, Arkansas, Colorado, Oklahoma and North Dakota.

The announcement marks another major blow to the struggling coal industry, which has been hit with increased competition from cheap natural gas, new anti-pollution regulations and faltering international coal markets that have dimmed hopes to boost exports.

Even before leasing was suspended, work at many of the sites was unlikely to begin for years because of the time it takes companies to navigate the government coal program.

Mining already underway on public lands will be allowed to continue. As could 17 other lease applications, many of which had been approved or whose environmental studies were completed but still were being processed, The Associated Press reported.

Mining representatives and elected officials from coal states decried the announcement.

“President Obama is wrong, and once again Montana’s working families are bearing the brunt of his unilateral action,” said Montana Gov. Steve Bullock, also a Democrat.

But the coal industry effectively has been under its own leasing moratorium in the Powder River Basin for the past few years. Several companies, including Alpha Natural Resources, which filed for bankruptcy protection last year, have asked the government to delay action on coal tracts previously nominated for leasing.

No federal coal reserves in Wyoming or Montana have been leased since 2012.

The moratorium could stall a 441 million-ton expansion of Cloud Peak Energy’s Antelope Mine in central Wyoming, a 198-million-ton expansion of Cloud Peak’s Spring Creek Mine in Montana, and a 203-million-ton expansion of Lighthouse Resources’ Decker Mine in Montana.

The U.S. sold billions of tons of coal over the past several decades, and Jewell said those reserves would be enough to sustain current production levels for about 20 years even with no new leases.

Roughly 40 per cent of the coal produced in the country comes from federal lands, primarily in Wyoming, Montana, Colorado, Utah and New Mexico.

Wyoming has directed billions of dollars from the sale of federal coal leases to support state school construction in recent decades. But with the recent downturn in the industry, the state has been scrambling to identify new sources of revenue.

“If we aren’t able to change those policies around, places like Gillette are going to look very much like the economies of Appalachia are looking right now,” Republican state Rep. Tim Stubson said.

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