The Obama administration’s decision to put a moratorium on new federal coal leases is another sign of the difficult road ahead for backers of two proposed Washington terminals that would export the fossil fuel to Asia.
On Friday, the Interior Department announced a pause on leasing as well as a review that could lead to pricing changes as coal’s contributions to climate change are examined.
“We haven’t undertaken a comprehensive review of the program in more than 30 years,” Interior Secretary Sally Jewell said in a statement released Friday. “And we have an obligation to current and future generations to ensure the federal coal program delivers a fair return to American taxpayers and takes into account its impacts on climate change.”
The Interior Department’s action was denounced by Cloud Peak Energy, a major U.S. coal producer that is involved with proposals to build terminals in Longview and at Cherry Point near Bellingham.
The Obama administration “has chosen to pander to special-interest groups whose stated goal is to shut down the U.S. coal industry,” said Colin Marshall, chairman of Cloud Peak Energy.
But a spokesman for Cloud Peak says the company still has ample reserves to supply the export terminals, should they be built. Those reserves include coal that remains to be mined from current federal leases not affected by the moratorium, as well as access to 1.4 billion tons of coal on private and tribal lands of the Crow Nation in Montana.
The export coal trade already his been hard hit by weaker demand in key markets such as China. That has triggered a decline in export prices and undermined the profits that could be made by sending Western coal to Asia.
Environmentalists said the Interior Department’s actions on Friday should make investors more wary of putting money into coal. They hope the review will give more momentum to a broader shift away from coal and toward cleaner energy with fewer carbon emissions that contribute to climate change.
“From our point of view, the only way that you can manage the coal and combat climate change is by keeping it in the ground,” said Jeremy Nichols, of Wild Earth Guardians.
The administration’s move also drew praise from Seattle billionaire Paul Allen, whose family foundation has financed a federal lawsuit that seeks to force the Interior Department’s Bureau of Land Management to conduct a review of the effects of leasing coal on the global climate.
“Greenhouse-gas emissions are warming our climate, largely driven by burning coal. I applaud the president for pursuing reform of America’s outdated coal-leasing program, which hasn’t been updated to reflect what we now know about environmental impact,” Allen said in a statement released Friday.
