Feds Put Moratorium on New Coal Leases

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Interior Department Secretary Sally Jewell at Isleta Pueblo in August.

US Dept. of Interior

Interior Department Secretary Sally Jewell at Isleta Pueblo in August.

 

Today, US Department of the Interior Secretary Sally Jewell announced that the federal government is putting a moratorium on new coal leases, including 28,000 acres of leases in New Mexico.

The moratorium, effective immediately, is part of the Obama Administration’s plans to cut carbon emissions from industry in the United States, a move the President alluded to in his State of the Union address.

According to the US Environmental Protection Agency, electricity from coal represents about 39 percent of the total electricity generated in the US—but 77 percent of that sector’s carbon emissions.

Jewell told reporters today that the “pause” will not affect existing mines. She said that ongoing operations will continue, and that industry currently has a 20-year supply of coal, which will ensure “our nation’s energy security.”

Next, she said, the agency plans to revamp the program so that taxpayers will get a fair cost—the “best deal”—for coal mined on public lands.

Currently, companies that mine coal from public lands pay the federal government a percentage of royalties plus an annual rental payment of about $3.00 per acre.

According to Jeremy Nichols, Climate and Energy Programs Coordinator with WildEarth Guardians, the Interior Department had been weighing 61 applications for new coal leases nationwide, 42 of which are located in the American West.

Thirteen of those are in New Mexico–and none are on the agency’s list of possible exemptions to the moratorium.

In 2012, coal production from federal leases in New Mexico included 4.3 million tons and generated $12.5 million in rents and royalties. That same year in New Mexico, coal mining and reclamation supported an estimated 2,800 jobs.

But the coal industry has been experiencing a major downturn in recent years.

Earlier this week, Arch Coal, the nation’s second largest producer of coal, announced it was declaring bankruptcy.

That company is the largest holder of public coal leases in the US—and has 21,000 acres of pending lease applications in New Mexico. (For a map of those, click here.)

According to a Wall Street Journal article, coal companies Walter Energy Inc., Alpha Natural Resources Inc., and Patriot Coal Corporation also filed for bankruptcy last year.

More than two years ago, international mining behemoth BHP Billiton announced it was selling its coal mine in New Mexico, the Navajo Mine which supplies the Four Corners Power Plant.

The move was part of the Australia-based company’s plans to cut its investment in coal.

As NMID reported in 2013, the Navajo Nation decided to purchase that mine for $85 million. The moratorium will not affect the mine.

Most recently, that deal was in the news when a former BHP Billiton employee sued the company. According to a story in the Farmington Daily Times, the employee alleges she was fired for refusing to destroy documents “related to the sale of Navajo Mine in an effort to mislead the Navajo Nation and tribal entity Navajo Transitional Energy Company.”

Today’s announcement from the US Department of the Interior will not impact the Navajo Mine or other operational mines in New Mexico.

The Interior Department also hopes to spend $1 billion over five years in coal-producing states. That money would go toward cleaning up old mines and spurring economic redevelopment in coal country.

The agency plans to release its interim report by the end of the year and a full review within the next three years.

This isn’t the first time the feds have enacted a moratorium on coal.

During the Nixon Administration, the Interior Secretary imposed a two-year moratorium on all “nonemergency” coal lease sales on public lands—a moratorium that ended up lasting ten years through the Nixon and Ford administrations.

According to the US Energy Information Administration, in 2013 coal production in the US dropped for the first time in more than two decades. The price of coal and the number of people employed within the coal sector has been dropping, as well.

Editor’s Note: This post was updated to correct the first sentence of the story. Today’s announced moratorium is not for two years. 

One thought on “Feds Put Moratorium on New Coal Leases

  1. Good move, President Obama ! Thank you for halting new coal mining on federal lands. If he had done this for OIL, there might NOT be an oil glut today, and our IRAs & 401Ks might not be sucking.

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