Senator Markey in pursuit of coal lease suspension on public lands

Senator Edward J. Markey (D-Mass.) announced this week that he will draft legislation to suspend new lease sales of coal from public lands until the Bureau of Land Management institutes reforms to the federal coal leasing program. This announcement came in response to a letter from the Bureau of Land Management that dismissed Senator Markey’s call for immediate action to change how the agency auctions and sells leases for coal development on public lands.

The Department of Interior’s Bureau of Land Management is responsible for leasing for coal development on public lands. By law, the Bureau of Land Management is supposed to offer these leases through competitive auctions at their fair market value, and choose the best offer from multiple, qualified bidders. In practice, however, the Government Accountability Office found the majority of coal lease sales are non-competitive and sold far below their fair market value, costing taxpayers hundreds of millions of dollars. Since 1990, only 10 percent of the 107 leased coal tracts on public lands had more than one bidder. Winning bidders are required to pay a rental fee for the land and a royalty rate on the coal they produce, equally divided between the United States Treasury and the state where the coal is extracted. Rental fees are only $3.00 per acre, and the royalty rates of 12.5 percent for surface mining and 8 percent for underground mining have not increased since 1920. In addition, royalty rates do not account for the social cost of carbon or the growing coal export market. A Government Accountability Office report to Senator Markey’s office estimated that leases are undervalued by $200 million.

In response to Senator Markey’s call for coal leasing reform, the Bureau of Land Management said it intends to make necessary changes to improve the coal leasing program, but did not give a timeline for those changes or agree to suspend coal lease sales until they are implemented. The agency’s response is hardly surprising, given its reluctance to revise regulations that would increase royalty rates, and its misrepresentation of coal lease auctions as competitive. The fact remains that coal produced from public lands is economically and environmentally undervalued, and the federal government is complicit in permitting coal companies to profit at the expense of our climate, public health and welfare. Senator Markey should be applauded for taking a stand against the complacency and hypocrisy of the Bureau of Land Management as it uses public resources and dollars to subsidize the coal industry. However, a mere suspension of coal leases is not enough to mitigate the climate impact of coal, which is responsible for one-third of U.S. carbon emissions. What we really need is a permanent moratorium on coal leases and other fossil fuels on public lands to keep coal companies from profiting off of the American taxpayer and keep dirty fossil fuels like coal in the ground.