Obama Administration Presses The Pause Button On New Coal Leases

In an important step taken in almost three decades, the U.S. Department of the Interior released a statement announcing a moratorium on new coal leases on federal lands as part of new executive actions to fight climate change.

Reuters reported that the halt could last three years while officials analyze and determine the pricing taxpayer stake in coal, as well as its impact on climate change. U.S. Interior Secretary Sally Jewell said,

“Even as our nation transitions to cleaner energy sources, building on smart policies and progress already underway, we know that coal will continue to be an important domestic energy source in the years ahead. We haven’t undertaken a comprehensive review of the program in more than 30 years, and we have an obligation to current and future generations to ensure the federal coal program delivers a fair return to American taxpayers and takes into account its impacts on climate change.”

The move was expected after President Barack Obama’s annual State of the Union address on Tuesday, where he said he would “change the way we manage our oil and coal resources so that they better reflect the costs they impose on taxpayers and our planet.”

The Obama administration’s step to combat climate change using executive order rather than wait for congressional action could be tough on the industry in these times. Since 2012, more than 50 coal companies have filed for bankruptcy in the face of competition from cheap natural gas and clean-air regulations that have raised costs for burning the fossil fuel.

Arch Coal Inc. Sentinel Prep Plant in Philippi, West Virginia, second-largest reserve of coal in the U.S., filed for creditor protection [Photo by Luke Sharrett/ Getty Images]

National Mining Association President Hal Quinn was apprehensive about the added red tape considering the fact that the development of coal projects on federal land have taken more than 10 years. He said, “The coal supply being cut off by today’s action has been the source of the lowest-cost and most reliable electricity keeping America’s lights on and people working,”

The Republican lawmakers criticized the move. U.S. House Speaker Paul Ryan said, “Congress will continue to fight back against the president’s ruthless pursuit of destroying people’s low-cost energy sources in order to cement his own climate legacy,”

Karen Harbert, president and CEO of the U.S. Chamber of Commerce Institute for 21st Century Energy, slammed the decision, saying, “Another day, another front on the war on coal from this administration. At this point, it is obvious that the president and his administration won’t be satisfied until coal is completely eradicated from our energy mix.”

Fox News reported that roughly 40 percent of the coal produced in the United States comes from federal lands. The vast majority of that mining takes place in Wyoming, Montana, Colorado, Utah, and New Mexico.

Anti-coal and renewable energy campaigners, at the Global Climate March ahead of the international UN climate talks. [Photo by Sherbien Dacalanio/Getty Images]

Environmental groups and activists welcomed the step. Erich Pica, president of Friends of the Earth, said, “With this decision President Obama sent a clear signal to coal companies, and their investors, that the days of dumping their pollution onto the American public are ending,”

Elijah Zarlin, director of climate campaigns at activist group CREDO, said, “Any good-faith effort to meet international climate targets necessitates that the vast majority of all remaining coal, oil and natural gas on federal lands must stay in the ground,”

There will be limited, commonsense exceptions to the pause, including for metallurgical coal (typically used in steel production), small lease modifications, and emergency leasing, including where there is a demonstrated safety need or insufficient reserves. In addition, pending leases that have already completed an environmental analysis under the National Environmental Policy Act and received a final Record of Decision or Decision Order by a federal agency under the existing regulations will be allowed to complete the final procedural steps to secure a lease or lease modification.

[Photo by Joe Raedle/Getty Images]