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Economy & Business

Administration Announces Temporary Freeze On Federal Land Mining Leases

RENEE MONTAGNE, HOST:

Let's turn now to another big part of our energy sector. Last week was a bad one for the coal industry. First, the country's second-largest coal producer - Arch Coal - declared bankruptcy. Then the Department of the Interior put a pause on new federal coal leases while it considers reforms to the country's coal program. From coal country, Wyoming Public Radio's Stephanie Joyce joins us now to discuss what all of this means. Good morning.

STEPHANIE JOYCE, BYLINE: Good morning.

MONTAGNE: The decision to halt new coal leasing on public lands - you're there in coal country. What impact is that going to have?

JOYCE: Yeah, well, Renee, 40 percent of the nation's coal is mined on federal land - mostly here in Wyoming. But in the short term, this actually doesn't mean that much. The moratorium doesn't affect existing coal leases. And the federal government estimates that companies already have enough coal under lease to supply U.S. demand for at least 20 years. Not to mention that the coal market is terrible right now and most coal mine expansion was already on hold at the request of companies. As you mentioned, at the beginning of last week, the nation's second-largest coal company - Arch Coal - declared bankruptcy. And that was just the latest company to go under. So there hasn't been a lot of interest in new leasing. But more symbolically, the moratorium definitely puts coal country on notice and sends a pretty powerful signal to utilities and to markets that the U.S. is continuing to move away from coal.

MONTAGNE: What has been the response there in coal country?

JOYCE: As you can imagine, people are pretty upset, especially in Wyoming, but also in other cold states like West Virginia and Montana. In Wyoming, the state is very dependent on coal, especially on federal coal. It supplies a quarter of state revenues. School construction here is specifically funded by the money that companies pay for new coal leases. I asked Senator Michael Von Flatern who represents Gillette, a town in the heart of coal country, how he thinks the state government should be preparing for a future in which we maybe aren't mining as much coal. And here's what he said.

MICHAEL VON FLATERN: Well, I think the first thing the state government will have to do if they truly believe this is going to be our future is to consider what the state will look like with 100,000 less people in it.

JOYCE: That's maybe a little dramatic. But if the industry does stop expanding, it will have a big impact locally, and people are scared. You know, until recently, Wyoming has been relatively insulated from the coal industry's downturn, which has mostly affected those higher cost mines in Appalachia. And now that appears to be changing. Let's hear from Travis Deti with the Wyoming Mining Association.

TRAVIS DETI: When the markets look at this and when the utilities look at this, it sends that signal that, hey, that coal's going to stay in the ground. You know, the administration has ravaged the industry back east, too, so this is just our little piece of the pie.

MONTAGNE: Still, this moratorium is not permanent, right? What has to happen for leasing to begin again?

JOYCE: Right. So the moratorium is in effect while the Department of the Interior does a full review of the coal program. According to Interior Secretary Sally Jewell, they're going to look at whether companies are paying a fair price for the right to mine that coal. They're going to look at some transparency issues with the program. They're going to look at how coal exports are handled. But, perhaps most critically, for the first time they're going to look at how the coal program fits with the country's climate and public health goals.

MONTAGNE: Stephanie Joyce is a reporter with Inside Energy, a public media collaboration that focuses on America's energy issues. Transcript provided by NPR, Copyright NPR.