Panel Paper:
Then and Now in Federal Coal Leasing
Saturday, November 5, 2016
:
10:55 AM
Gunston West (Washington Hilton)
*Names in bold indicate Presenter
On January 15th, 2016, Interior Secretary Jewell initiated a Discretionary Programmatic Environmental Impact Statement covering the federal coal program, along with a moratorium on new coal leasing . Since the end of the previous moratorium in 1987, the coal commodity market and the American coal industry have changed dramatically, though there have been few significant changes to the regulatory process for leasing federal coal. Many of the issues that motivated previous leasing moratoria are still in evidence, with one key issue being whether the federal Government receives a “fair return” for leasing public mineral resources. In this paper we discuss the importance of decisions regarding leasing levels and the timing of lease sales, and.we highlight the challenges associated with defining fair market value. To assess the returns from federal coal leasing, we use federal mineral revenue data from 1990 - 2015 to calculate the “effective” royalty rates mining companies have paid, and compare these to statutory rates. Lastly, we consider the issue of post-mining reclamation, including changes in the expectations of what constitutes sufficient restoration, and how the associated costs are secured by performance bonds. By comparing the policies and economic conditions facing federal coal leasing over the past several decades, we explain the challenges associated with administering the mineral leasing program and illustrate the extent to which key issues from the past are still relevant.
