The Subcommittee on Energy and Mineral Resources held an oversight hearing titled, “Examining the Biden Administration’s Record on Federal Coal Leasing.”
In addition to providing affordable, reliable power to the grid, since its inception, the federal coal leasing program has been a source for jobs and economic development across the country, helping federal, state and localities with necessary funding by contributing hundreds of millions each year in revenues to state and local governments.
The National Mining Association (NMA) said it supported the House Committee on Natural Resources, under the leadership of Chairman Bruce Westerman and Subcommittee Chairman Pete Stauber, decision to examine the Biden administration’s actions to obstruct coal production on federal lands, placing our nation’s energy security and economy at risk.
Matthew Adams, vice president and senior tax counsel for Navajo Transitional Energy Company (NTEC) testified at the hearing. NETC has mines that operate in Wyoming’s Powder River Basin. There has been one Lease by Application (LBA) in Wyoming in the last 15 years, he said. “Over the past 20 years, the process of acquiring additional coal to mine has gone from a 3– to 5-year process to the current 12-year process,” Adams said. “There are several reasons for this lengthy process including redundancy of reviews by different agencies, litigation delays, Department of the Interior’s timing of handling its workload just to name a few.
Under the current rules, when a company is awarded an LBA it pays for that coal in the immediately following 5 years. The winning bids for coal between 2000 and 2012 ranged from a low of $42.8 million to a high of $793 million.
“[If] a coal company is interested in acquiring additional coal on Federal land, where the vast majority of the coal is located west of the Mississippi River, [it] would need to pay the bid of hundreds of millions of dollars without obtaining a penny of revenue from the purchased coal for 12 years,” Adams said. “This economic reality has created a situation where the currently leased coal in the Powder River Basin could be mined in the next 15-20 years. Unless the economics around thermal coal significantly change, or the permitting process is significantly shortened, the amount of coal coming out of Wyoming and Montana will be a pittance of what we see today.”
In recent years – under both the Biden and Obama administrations – federal coal leasing has been threatened. On January 15, 2016, then-Secretary of the Interior Sally Jewell issued a moratorium on new leasing until a voluntary study of the program’s environmental impact could be completed. Under the subsequent administration, then-Secretary of the Interior Ryan Zinke found a study to be unnecessary and lifted the moratorium. With the Biden administration, the program was once again paused.
In the interim, valuable coal projects have been unable to advance. For example, a mine plan amendment for the Black Butte mine in Wyoming was approved by the state in January 2021 but has yet to be approved by the Department of the Interior.
The NMA said it also supports proposals included in the house-passed H.R. 1, which included language revoking a moratorium on new leasing for thermal coal production on federal land and requiring the Department of the Interior to issue pending applications to expand federal coal operations, and in Sen. John Barrasso’s SPUR Act, which also revokes the moratorium and sets specific time limits on decisions from the Department of the Interior.
America’s public lands are intended for multiple uses, including the production of affordable, reliable energy for all Americans. Federal coal production not only provides a fair return to the public but a stable source of fuel that is vitally important in the aftermath of a global energy crisis and as a source of stability throughout the energy transition.
