President Trump decided to lift a temporary halt on new leases for mining coal on public lands, as part his executive order on energy, the White House has announced. Tuesday’s multi-pronged order guts actions taken by the Obama administration to address climate change.
Lifting the moratorium is expected to cost taxpayers by preventing them from getting fair market value for publicly owned coal for the foreseeable future.
The Bureau of Land Management put the coal leasing moratorium in place in January 2016, so a comprehensive review of the federal coal program could be completed. The review — the first in over 30 years — was launched to help ensure that taxpayers are receiving a fair return for use of their natural resources.
Lifting the moratorium without a review or reform means any new leases will continue at the current, undervalued rate. In addition, the current BLM bidding process is conducted without any public transparency. Advocates for reform were hoping the review process would change that.
“Resuming coal leasing under a secret process that sells coal to companies at below market value is contrary to law,” said Dan Bucks, former director of revenue for the state of Montana. “By selling coal at less than market value as required by the Mineral Leasing Act, President Trump and Secretary Zinke will fail to meet their constitutional duty to faithfully execute the law. These actions are an injustice to citizens and local communities and a betrayal of the law and the public trust.”
Taxpayers are estimated to be losing $1 billion a year in revenues because coal companies are not paying royalties on the actual market price of coal extracted from federal lands. Royalty payments are split between the federal government and the state where the coal is mined, and coal lease sales in the in the past decade garnered close to $1 per ton in bids.
This is above and beyond the so-called “royalties loophole,” which allows coal companies to sell publicly owned coal to subsidiaries at artificially low prices. An Obama-era rule had closed that loophole, but the Trump administration has already stayed the legally binding rule, and has initiated court proceedings to throw it out entirely. Under the loophole, taxpayers lose millions of dollars annually.
However, with natural gas outcompeting coal on all fronts — and with coal companies already sitting on approximately 20 years of reserves under lease — it is not clear that the industry will be moving to lease more mining areas anytime soon.
Even if new leasing goes forward, critics say Trump’s order to lift the moratorium will do more for coal industry executives than it will for coal communities. Coal jobs have been in decline for decades — and not just because coal production is falling. Automation and new mining processes have diminished the number of jobs per ton of coal.
“This order won’t bring the coal industry back, but it will ensure coal companies rip off American taxpayers for years to come,” said Jesse Prentice-Dunn, advocacy director for the Center for Western Priorities. “Leasing our coal for a dollar a ton is a bad deal, there’s no way around it. It seems President Trump is looking out for coal executives, not negotiating for American taxpayers.”
By lifting the temporary pause on new federal coal leases, the president adds to his list of actions that may harm coal communities. This includes rolling back a federal rule that would protect communities from industry dumping toxic heavy metals and other debris into nearby waterways. Crippling the rule was a “top priority” for Robert Murray, CEO of the coal mining giant Murray Energy Corp.
Trump’s budget proposal also reduces Abandoned Mine Land grants that help states reclaim toxic abandoned mine sites that still pollute nearby coal communities.