Friday, January 15, 2016

President Obama issues temporary ban on new federal coal leases

The Obama administration today "ordered a moratorium on new leases for coal mined from federal lands as part of a sweeping review on the government’s management of vast amounts of taxpayer-owned coal throughout the West," Joby Warrick reports for The Washington Post. Interior Secretary Sally Jewell said "it was time for a re-examination of the decades-old coal-leasing program, from health and environmental impacts to whether U.S. citizens are getting a fair return for the hundreds of millions of tons of government-owned coal that is mined and sold each year." The move will have no immediate effect on production or jobs, Jewell said.

"Hundreds of millions of tons of federally owned coal are mined by private companies each year under laws requiring the federal government to seek maximum benefit for resources on public lands," Warrick writes. "Environmental groups and some independent analysts have long argued that taxpayers are under-compensated for coal extracted from vast mines on federally owned land across the West and that prices do not reflect societal costs from pollution from coal-burning."

Currently, mining companies "pay a 12.5 percent royalty rate for coal taken from surface mines, compared to an 18.75 percent royalty for oil and gas from offshore drilling," Warrick writes. "Coal companies say the actual rates paid to the government are much higher because of bonuses and other fees paid through lease agreements. Most of the coal mined from federal lands is used in U.S. electricity generation, though some is sold overseas. Government-owned coal harvested in the Powder River basin–the country’s biggest coal-producing region, straddling Wyoming and Montana–accounts for about 10 percent of all U.S. greenhouse gas emissions, according to a study last year by the Center for American Progress and the Wilderness Society."

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