Obama administration set to announce a freeze of new coal leases on federal lands

The Obama administration will announce today an overhaul of rules governing coal leases on federal land.  It will include a freeze on future coal mining, which will cost thousands of jobs in Western states.

The new plan would also require federal officials to determine the effect of burning coal on climate change when approving changes to existing leases.

Reuters:

The overhaul also will aim to maximize returns for taxpayers by updating royalty rates when mining companies pull coal from federal land, said the sources.

Interior Department spokesperson declined to give details about the Friday announcement.

Environmentalists have urged the White House to freeze new coal leases on federal land until it accounts for how that fossil fuel development contributes to climate change.

Coal leases are often awarded without a competitive bidding process, frequently going to a single bidder, and officials can undervalue the fuel heading to market, the nonpartisan Government Accountability Office has concluded.

"Public lands should be developed in the public interest but taxpayers have been short-changed for decades," said Theo Spencer of the Natural Resources Defense Council, an environmental group.

The Energy Information Administration says roughly 41 percent of U.S. coal production occurs on federal land, primarily in Wyoming.

The coal industry had been battered in recent years by competition from cheap natural gas and clean-air regulations that have raised costs for burning the black rock.

This week, Arch Coal Inc, one of the nation's largest coal companies, filed for bankruptcy - the latest mining company to seek protection from creditors in the current downturn.

The National Mining Association was not immediately available for comment.

Some analysts said that market conditions have dampened demand for new mining.

"Over the last two years a number of coal leases were bid out by the Bureau of Land Management and no bids were received, reflecting the fact that there are no market incentives to go forward with new mining," said Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis.

But remember: there's no war on coal.

By making America's most abundant and formerly cheapest energy source more expensive, the industry's ability to compete in the marketplace will be  severely affected.  The phasing out of coal-fired electrical plants will make electricity much more expensive, and unless electrical capacity is replaced – it won't be – our already strained electric grid will overload and break down far more often than it does now.

So we've got that to look forward to also.

Unless the industry can come up with a cleaner way to burn the fuel – capturing particulates is especially difficult – coal may go the way of whale oil as a source of energy.  But the insane policies of the Obama administration are hastening the process, costing hundreds of millions of dollars and costing thousands of jobs.

The Obama administration will announce today an overhaul of rules governing coal leases on federal land.  It will include a freeze on future coal mining, which will cost thousands of jobs in Western states.

The new plan would also require federal officials to determine the effect of burning coal on climate change when approving changes to existing leases.

Reuters:

The overhaul also will aim to maximize returns for taxpayers by updating royalty rates when mining companies pull coal from federal land, said the sources.

Interior Department spokesperson declined to give details about the Friday announcement.

Environmentalists have urged the White House to freeze new coal leases on federal land until it accounts for how that fossil fuel development contributes to climate change.

Coal leases are often awarded without a competitive bidding process, frequently going to a single bidder, and officials can undervalue the fuel heading to market, the nonpartisan Government Accountability Office has concluded.

"Public lands should be developed in the public interest but taxpayers have been short-changed for decades," said Theo Spencer of the Natural Resources Defense Council, an environmental group.

The Energy Information Administration says roughly 41 percent of U.S. coal production occurs on federal land, primarily in Wyoming.

The coal industry had been battered in recent years by competition from cheap natural gas and clean-air regulations that have raised costs for burning the black rock.

This week, Arch Coal Inc, one of the nation's largest coal companies, filed for bankruptcy - the latest mining company to seek protection from creditors in the current downturn.

The National Mining Association was not immediately available for comment.

Some analysts said that market conditions have dampened demand for new mining.

"Over the last two years a number of coal leases were bid out by the Bureau of Land Management and no bids were received, reflecting the fact that there are no market incentives to go forward with new mining," said Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis.

But remember: there's no war on coal.

By making America's most abundant and formerly cheapest energy source more expensive, the industry's ability to compete in the marketplace will be  severely affected.  The phasing out of coal-fired electrical plants will make electricity much more expensive, and unless electrical capacity is replaced – it won't be – our already strained electric grid will overload and break down far more often than it does now.

So we've got that to look forward to also.

Unless the industry can come up with a cleaner way to burn the fuel – capturing particulates is especially difficult – coal may go the way of whale oil as a source of energy.  But the insane policies of the Obama administration are hastening the process, costing hundreds of millions of dollars and costing thousands of jobs.