Full rail cars outside Cloud Peak Energy’s Antelope Coal loading terminal in Rawlins, Wyo. About 40 percent of the nation’s coal is mined on public land in the state. Credit Jim Wilson/The New York Times
WASHINGTON — The Obama administration will announce on Friday a halt to new coal mining leases on public lands as it considers an overhaul of the program that could lead to increased costs for energy companies and a slowdown in extraction, according to an administration official.
The move would represent a significant setback for the coal industry, effectively freezing new coal production on federal lands and sending a signal to energy markets that could turn investors away from an already flailing industry. President Obama telegraphed the step in his State of the Union address on Tuesday night, saying, “I’m going to push to change the way we manage our oil and coal resources so that they better reflect the costs they impose on taxpayers and our planet.”
Last year, Mr. Obama used his executive authority under the Clean Air Act to complete regulations that would limit carbon dioxide emissions from coal-fired power plants, the nation’s largest source of planet-warming pollution. Republicans have attacked the rules, which could lead to the closing of hundreds of coal plants, as a “war on coal.” A halt to new leases would go even further by leaving coal unmined.
The action is certain to further inflame a political debate over the federal government’s control of public lands, most recently illustrated by an armed takeover of a wildlife refuge in Oregon. About 40 percent of the nation’s coal is mined on public land, and most of that land is in the Powder River Basin of Wyoming.
“It appears that they’re going after the federal coal leasing program with the intention of keeping coal in the ground,” said Luke Popovich, a spokesman for the National Mining Association.
But companies can continue to mine the coal reserves under lease, estimated to be enough to sustain current levels of production from federal land for about 20 years, according to the administration official, who spoke on the condition of anonymity because details of the plan had not been made public.
Mr. Obama hopes to make curbing climate change a cornerstone of his legacy. The administration’s planned action would be the latest step in his ambitious efforts to use his executive authority to tackle climate change, though it could be reversed by another president.
As the administration has sought additional ways to discourage production and consumption of the fuel most responsible for global warming, economists have proposed a “production fee” associated with emissions from coal. Administration officials have estimated that cost — tied to what they call the “social cost of carbon” — at about $40 per ton of carbon dioxide produced.
A fee of that size “would shut down the industry on federal lands entirely,” said Alan Krupnick, an economist at Resources for the Future, which studies environmental economics.
He added, “But even a small charge that begins to internalize these costs — say, a couple of dollars per ton — would put the industry on notice.”
The environmental advocacy group 350.org, which led the successful campaign against the construction of the Keystone XL oil pipeline, has since turned its efforts to pushing Mr. Obama to shut down new leases for coal mining on public lands.
“The administration’s top priority needs to be to keep fossil fuels in the ground,” said Jamie Henn, a spokesman for the group. “Any move that increases the cost of extracting fossil fuels on public land.”
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