The Bureau of Land Management should not only require a better return on coal leases for U.S. taxpayers but also work harder to balance coal production against the growing threat of climate change, according to a new Department of the Interior report.
On Wednesday, the BLM released an exhaustive report on the federal coal program, which applies to the 570 million acres of coal mineral estate owned by the federal government. In short, it calls for both government and industry to use better business practices, both financial and technical, than those that were available or allowed more than 30 years ago.
Montana is a focus because in 2015, 42 percent of all coal produced in the U.S. came from public land, and nearly 90 percent of that comes out of the Powder River Basin of Wyoming and Montana.
The BLM is supposed to enable responsible development of resources, but it is also tasked with conservation and protection of environmental values of the land. When it comes to fossil-fuel extraction, those two duties usually come into conflict.
So in March 2015, Interior Secretary Sally Jewell ordered a long-overdue review of the program. The regulations creating the program were written in the 1970s but haven’t been amended even though many changes have occurred in the industry and economy. The last review was in the '80s. That prompted the Government Accountability Office, the DOI Inspector General and the public to call for an update.
“We have a responsibility to ensure the public – including state governments – get a fair return from the sale of America's coal, operate the program efficiently and in a way that meets the needs of our neighbors in coal communities, and minimize the impact coal production has on the planet that our children and grandchildren will inherit. The only responsible next step is to undertake further review and implement these commonsense measures,” Jewell said in a press release.
The report also called on the incoming administration to, among other things, increase transparency of the leasing program, improve protection for private surface owners and reduce the loss of wasted natural gas from coalmines.
The 1,380-page report is actually a 190 pages accompanied by more than 1,000 pages of comments because more than 214,000 Americans weighed in as part of the review. But the review acknowledges that Westerners will be most directly affected.
“Any changes to the Federal coal program will have a more direct impact in the western region and Powder River Basin due to this heavy concentration of leases and production from the Federal estate,” the report stated.
Montana has long depended on coal production to bolster the state budget. For example, in 2010, $85 million in one-time coal lease payments helped limit post-recession spending cuts to only $41 million.
Since then, however, coal-fired electricity generation has declined due to strides in renewable energy generation and occasionally lower natural-gas costs. Coal-fired electricity made up 50 percent of U.S. generation in 2005 but declined to 33 percent by 2015.
Coal production plummeted as a result, and several coal companies have gone into bankruptcy. The decline has rippled into the Montana state coffers, and the 2017 Legislature is now arguing over how to suddenly compensate for a $225-million budget shortfall caused by declining fossil-fuel revenues and property and income tax collection.
During the year or so that the review was being conducted, the BLM issued a hold on any new coal leases. That meant the BLM would not add to the 306 already-active federal coal leases that are predicted to provide coal at current production levels for the next 20 years.
But Republican congressmen tried to overturn the hold using the pervasive reason of “governmental overreach.” Montana Rep. Ryan Zinke, now tapped to be the new Interior Secretary, authored a bill that would not only reopen leasing but also create a royalty committee of state and energy interests to advise the DOI.
“States and tribes possess critical local knowledge that should help mitigate the impact of federal regulation, and I think their voices need to be heard,” Zinke told a September meeting of the House Natural Resource Committee.
But coal burning is the biggest contributor to atmospheric carbon, which is causing the climate to warm. Fifteen of the past 16 years have broken records for the hottest global average temperature. Federal coal production is responsible for 10 percent of the country’s greenhouse gas emissions.
Montana is already having to deal with effects of climate change on the economy as winters get shorter, snowpack declines and water shortages begin to appear. More and more, summer heat waves singe crops, limit hay production and increase the number of wildfires while low, warm rivers limit fishing opportunities and affect tourism.
Such effects are only going to increase as the climate continues to warm so many oppose continuing to support coal production just to keep some jobs and tax revenue.
However, if the recommendations in the BLM report are followed, states may end up at least getting a better return on the leases that remain.
The next step is completion of the programmatic environmental review required by Secretary Jewell’s January 2016 order. But now that Zinke might be the Interior Secretary, some are worried he might scrap the BLM’s progress toward modernizing the program. Ryan Alexander of Taxpayers for Common Sense urged Zinke not to do so.
“It is a disservice to taxpayers, and to the states and towns that depend on revenue from coal mining, to ignore the well-documented problems with virtually every aspect of the process. Allowing the coal industry to control the leasing process and game the system has robbed taxpayers and harmed communities,” Alexander said.
Steve Charter, a coal-country rancher and a Northern Plains Resource Council member from Shepherd, Montana, highlighted the poor record of mine reclamation under the program.
“We owe it to America’s outdoor heritage — ranching, hunting, and more — to ensure that our lands and waters are restored. Accountability is a Western value, and the incoming Trump Administration should make certain that companies clean up their messes instead of leaving the American public holding the bag,” Charter said.