January 18, 2016

In Latest Move On Climate, Obama Administration Halts Coal Leasing

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A haul truck at Alpha Natural Resources' Eagle Butte coal mine.

Stephanie Joyce/Wyoming Public Media

A haul truck at Alpha Natural Resources' Eagle Butte coal mine.

In President Obama’s recent State of the Union address, there was a line that caught the ear of people in the energy industry.

“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,” he said.

On Friday, the Department of the Interior made good on that promise, putting a freeze on new federal coal leases while it reviews the program. Existing mines will be able to continue operating and new mines can make their way through the environmental review process, but a decision about whether to approve them won’t happen until the review is completed.

Announcing the temporary moratorium on a call with reporters, Interior Secretary Sally Jewell portrayed the review as a non-partisan, common sense move, pointing out the federal coal program hasn’t been updated since the 1980s.

“That was a time, 30 years ago, when our nation had very different priorities and needs,” she said. “The result was a federal coal program designed to get as much coal out of the ground as possible. And in many ways, that’s the program that we’ve been operating ever since.”

While Jewell may have wanted to come off as non-partisan, many people in Wyoming heard something different.

“Obama to Wyoming: drop dead,” Travis Deti, with the Wyoming Mining Association joked darkly.

Today, 40 percent of the coal mined in the United States comes from publicly-owned minerals beneath federal land, mostly in Wyoming. The government review will address whether taxpayers are getting a fair return on that coal, as well as how to square the coal program with the country’s new climate goals.

In practice, the moratorium won’t have much of an immediate effect on the state. It doesn’t stop existing coal production, and the federal government estimates that nationwide, the leases companies already have could supply 20 years of U.S. demand.

But the review is likely to bring about changes that will make it more expensive to mine coal on federal land, and that could have a big impact on Wyoming, where coal provides a quarter of state revenues.

Without that steady source of revenue, state senator Michael Von Flatern says Wyoming won’t be able to pay for its roads and schools and public services—at least not at the level it does today.

But Shannon Anderson of the Powder River Basin Resource Council, a Wyoming landowners group that has long pushed for reforms to the coal program, is welcoming Friday’s decision. She says it comes at a critical time because so many aspects of the coal industry, from exports to the continued use of the fuel in power plants, are up in the air.  “It’s so important for us to take a pause, to take a time out and really have a good national conversation on the future,” she said.

For now though, people in Gillette, the heart of Wyoming coal country, largely greeted the announcement as just the latest in a bunch of bad news. Coal has lost significant market share to natural gas in the last year, and along with new carbon regulations for power plants and recent coal company bankruptcies, things aren’t looking up for the industry.

“Everybody realizes we’re in a downturn and have been for a while,” said Nate Hardy, a coal miner and the owner of Gillette Brewing Company. “Hopefully we get another boom.”

But that’s unlikely, and if Obama is true to his pledge in the State of the Union, expect to see changes coming in the near future to federal leasing of oil too.