Coal leasing program to undergo review…again

Interior Secretary Deb Haaland
Interior Secretary Deb Haaland overlooking the Upper Falls at Yellowstone National Park on Aug. 13, 2021 (Flickr/U.S. Department of the Interior, Public Domain)

It’s deja vu to 2016

Consistent with their note in a press release earlier this week, the U.S. Department of Interior today filed its Notice of Intent to Conduct a Review of the Federal Coal Leasing Program and to Seek Public Comment in the Federal Register.

Coal leasing under the federal program has been under renewed scrutiny for almost a decade, but its process has remained controversial since the 1970s.

The program is of particular importance to Wyoming, who receives roughly one-half of the royalties and lease bonus bids from coal leasing. In the past, bonus bids alone totaled billions of dollars which were directed to school construction around the state.

Recent history

During the Obama administration, Interior’s Office of Natural Resource Revenue (ONRR) conducted rule making regarding transactions between related entities, at the time targeting allegations that Cloud Peak Energy, who produced coal at their Powder River Basin (PRB) mines and then under a separate entity handled logistics for coal destined for export outside the U.S., was underpaying for coal via the process.

Separately, in the summer of 2015, Interior’s Bureau of Land Management (BLM) conducted a series of listening sessions in Washington, DC, Billings, Gillette, Denver, and Farmington, New Mexico. According to the notice, BLM heard from just under 300 people and subsequently received 92,000 written comments during the process.

Per the notice, the comments were in six general areas: global climate change and the use of coal; the loss of jobs and local revenue from decreased coal production; increased transparency in the leasing process and ensuring that taxpayers received adequate compensation; increasing coal royalty rates; maintaining or decreasing coal royalty rates; and streamlining the leasing process.

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On January 15, 2016, then Secretary of the Interior Sally Jewell issued Secretary’s Order 3338, which directed BLM to “conduct a broad, programmatic review of the Federal coal program” through the NEPA process. The Jewell order suspended the issuance of new federal thermal coal leases, subject only to a small list of exceptions.

Consistent with the Jewell order, BLM began its required notices and scoping for the NEPA process.

In 2016, Donald Trump was elected president and in January of 2017 Interior Secretary Ryan Zinke road his horse to Interior’s main office on his first day.

Ryan Zinke
Then Secretary of the Interior Ryan Zinke riding to work on his first day as Secretary (Flickr/U.S. Department of the Interior, Public Domain)

Two weeks later, Zinke issued his Secretary’s Order 3348 which rescinded the Jewell order suspending coal leasing and stopped preparation of the Programmatic Environmental Impact Statement (PEIS).

Though coal’s production declines never abated, the discussion of federal coal leasing came to a pause.

A new president

In one of his first acts as president, Joe Biden issued Executive Order 13990, Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.

Three months later, new Interior Secretary Deb Haaland issued Secretary’s Order 3398, rescinding the Zinke order.

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In its notice today, Interior stated, “the regional leasing program authorized in the 1979 regulations has not worked as envisioned.” The notice also notes that the program does not meet the Biden administration’s environmental goals.

Interior is now seeking input on whether the current program should be changed and comments on the following topics:

  1. Whether bonus bids, rents, and royalties provide the American taxpayer a fair return
  2. How best the BLM should assess the climate impacts of the program
  3. Other impacts on public health and the environment
  4. Socio economic considerations
  5. Coal exports
  6. U.S. energy needs

Interior’s decision was largely applauded by environmental groups.