Coal news and updates

Even as coal miners struggle with an epic decline in their business, including headwinds on regulatory, legal, and economic fronts, the industry faces another test that is just over the horizon – one which could prove an existential threat to the long-term business model. That test is the ability of the industry to access coal reserves that are held on federal land.

 

The Obama administration put in place a moratorium on new coal leases on federal land earlier this year. That moratorium has been in place for about six months now and has another 2.5 years to go. The plan was predicated on the view that it is time for the government to revisit and re-examine its decades-long approach to deriving value from coal on federal lands. The Obama administration is concerned about whether coal extraction is leading to enough benefits to justify the potential costs in the form of health and environmental impact.

 

The moratorium was predictably lauded by environmentalists but denounced by industry and politicians in western states where federal coal leases provide significant numbers of jobs and help bolster state coffers.

 

Now, there are calls emerging for that moratorium to be made permanent. So far, the current moratorium is still temporary, but if Democrats retain the White House in November, it is all but certain that the ban will continue and possibly be made permanent.

 

If the ban is made permanent, it won’t immediately impact existing coal operations. The existing leases are contracts which cannot be easily broken or abrogated. Those leases give coal operators access to roughly a 20-year supply. At the same time though, without new leases, coal’s future will increasingly be endangered.

Source: Oil Price