Obama administration halts new coal leases

The Obama administration is halting new coal leases on federal lands until it completes a comprehensive review of fees charged to mining companies and coal mining’s impact on the environment.

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Interior Secretary Sally Jewell on Friday said that companies can continue to mine coal reserves already under lease.

The coal leasing program has not been significantly changed in more than 30 years, Jewell said, adding that it needs to be modernised to ensure a fair return to American taxpayers and to account for climate change.

“It is abundantly clear that times are different than they were 30 years ago, and the time for review (of the coal leasing program) is now,” Jewell told reporters in a conference call.

Officials also need to take into account new scientific data available on the impact of fossil fuels on the environment and on climate change, Jewell said.

Roughly 40 per cent of the coal produced in the US comes from federal lands. The vast majority comes from Wyoming, Montana, Colorado, Utah and New Mexico.

It’s unclear what impact the moratorium will have on US coal production, given the declining domestic demand for coal and the closure of numerous coal-fired power plants around the country.

Coal companies have already stockpiled billions of tons of coal on existing leases.

Even so, environmental groups cheered the announcement.

The groups have long said the government’s fee rates for coal mining on federal land encouraged production of a product that contributes to global warming.

The administration held a handful of public hearings last year to get feedback on the adequacy of the fees charged companies for coal mined on federal lands.

The government collects a 12.5 per cent royalty on the sale price of strip-mined coal, a rate that was established in 1976.

The money is then split between the federal government and the state where the coal was mined. Coal companies also pay a $US3 ($A4.30) fee annually for each acre of land leased.

President Barack Obama said during the State of the Union address this week that he would push to change the way the federal government manages its oil and coal resources.

Jewell and other officials on Friday said that reviews of the federal coal program have occurred twice before – once in the 1970s and again in the 1980s – and pauses on the approval of new mining leases accompanied each review.