On January 15, 2016, the Secretary of the United States Department of the Interior, Sally Jewell, issued an administrative order halting the leasing of federal coal reserves. The moratorium on federal coal leasing will remain in place to allow preparation of a Programmatic Environmental Impact Statement (“EIS”) assessing how best to “modernize” the federal coal program. The Department of the Interior expects the EIS process to take three years to complete. The only leases exempted from the moratorium are leases that have received a final approval from the applicable federal land management agency.
The moratorium will have a significant effect on the coal industry, the federal budget, and energy consumers. Forty percent of all the coal produced in the United States comes from federal lands and 85 percent of that coal is low sulfur coal produced in the Mountain West. In 2015 alone, coal leasing generated over a billion dollars in rents, lease bonuses, and royalties.
The Department of the Interior indicates that the EIS will address, at a minimum:
- How, when, and where to lease
- Whether the federal government receives a fair return on its leases
- The climate impacts of federal coal
- The socio-economic impacts of federal coal leasing
- Should leasing decisions consider whether the coal will be used domestically or for export
- Whether federal coal fulfills the energy needs for the United States