Roadmap to Reform Federal Coal Program Released - Global Trade Magazine
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  January 12th, 2017 | Written by

Roadmap to Reform Federal Coal Program Released

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  • Interior Department undertook review of federal coal program.
  • Results of coal review focus on return to taxpayers, transparency, efficiency, and impact on climate change.
  • Federal coal accounts for 40 percent of all U.S. coal and is responsible for 10 percent of greenhouse gas emissions.

The United States Department of the Interior’s Bureau of Land Management (BLM) yesterday released the results of a comprehensive, public review of the federal coal program. The review was based on hundreds of thousands of public comments and examined concerns raised by the Government Accountability Office, the Interior Department’s Inspector General, and members of Congress.

The report outlines the need for modernization of the federal coal program in the following key areas: ensuring a fair return to Americans for the sale of their public coal resources, assessing the structure and efficiency of the coal program in light of current market conditions, and considering impacts on communities and the environment including climate change.

Interior Secretary Sally Jewell, who appeared at a Columbia University program in New York the day the report was relased, termed it a “scoping” report, meaning that it lays out the issues involved in the reform of the program and sets out matters for further investigation.

“Many of the rules governing energy have been around since the 1970s,” said Jewell. “Changes in the industry have been huge since then, but federal regulations and programs have not kept pace.”

The production of federal coal accounts for more than 40 percent of all coal produced in the United States and is responsible for 10 percent of the country’s greenhouse gas emissions, the report notes. Between 80 and 90 percent of the coal produced in the U.S. is used for electricity generation, according to the report. But in recent years there has been a switch from coal-fired electricity generation to natural gas, accompanied by a decline in coal production.

“Coal-fired electricity made up 50 percent of U.S. generation in 2005 and by 2015 had declined to 33 percent,” the report noted. “Coal production fell from 1.13 billion to less than 0.9 billion tons during this same time period. In 2015, U.S. coal production experienced one of the steepest declines in history, and it is projected to decline by an additional 15 percent in 2016.” While major coal companies have filed for bankruptcy, the dropoff in coal usage has also had an impact on U.S. railroads which once relied on coal as a mainstay of their business.

Today’s report also identifies a number of good government modernization activities that will be taken in the near future to improve the program. These include increased transparency of the leasing program.

“Federal coal is often sold at a fraction of the costs of coal mined from private lands,” said Jewell. Additional areas to be considered include strengthening the financial and environmental responsibility requirements for operators who are permitted to bid on coal leases and undertaking actions to improve lease process efficiency.

The Interior Department has instituted a pause on issuing new coal leases while the review was underway. The pause did not apply to existing coal production activities.

With little more than a week left to the Obama administration, Jewell hopes that the report’s agenda will be taken up by her successor.

President-elect Donald Trump has advocated brining back coal mining and the coal industry. President Obama’s policy, according to Jewell, focused on redirecting the labor of former coal miners to land reclamation. One pilot project in Pennsylvania was funded to that end.

“We’re not going back to the way we were,” said Jewell.