Via E&E Publishing: 

With rhetoric reaching a fever pitch, groups warring over coal’s future are getting their first chance to weigh in on the Obama administration’s review of federal leasing.

The Department of the Interior’s first public scoping meeting is underway this afternoon in Casper, Wyo., four months after Interior Secretary Sally Jewell imposed a moratorium on most new federal coal leasing.

The halt lasts until the Bureau of Land Management completes a programmatic environmental impact statement determining whether federal coal — 40 percent of all the nation’s reserves — delivers a fair return to American taxpayers and accounts for coal’s climate change impacts (Greenwire, Jan. 25).

Leading the charge against both rationales for the moratorium, National Mining Association CEO Hal Quinn said: “There is no compelling need for a moratorium to ‘fix’ a program that isn’t broken.”

Quinn’s group says taxpayers are already getting 39 cents on the dollar from federal coal sales. With environmentalists clamoring for increased royalty rates, NMA argues that the 12.5 percent rate on federal land is roughly 40 percent higher than on private land, in addition to bonus bids and other fees.

The coal industry points to a 2014 Government Accountability Office report and a 2013 Interior inspector general investigation (Greenwire, Feb. 4, 2014; E&E Daily, July 13, 2013).

“While recommending targeted efficiency improvements, neither report identified fundamental flaws that would justify the wholesale changes called for by environmental activists and now suggested by the administration,” Quinn said.

NMA also disputes the need to incorporate climate impacts into federal coal leasing decisions, pointing to the Obama administration’s decisions to move forward with coal leases after analyzing resulting greenhouse gas emissions (E&ENews PM, May 2).

“Keeping federal coal in the ground is a political fix that will deny taxpayers any revenue from this valuable resource, while forcing state and local communities to suffer the loss of additional high-wage jobs and sharp budget shortfalls that will require either higher taxes, lower services or both,” Quinn said.

University of Colorado Law School professor Mark Squillace counters that taxpayers have missed out on more than $29 billion in lease payments and unpaid royalties as coal companies exploit loopholes in outdated standards (Greenwire, June 25, 2012).

Watchdogs will be paying attention. A coalition of groups including the National Wildlife Federation launched a website, reformcoal.org, to track the progress of the administration’s review.

“Coal companies are mining taxpayer-owned coal at cut-rate prices while Western communities face the fallout: destroyed landscapes, air and water pollution, budget shortfalls and the growing impacts of climate change,” Squillace said.

While billions of dollars from taxes, royalties and other payments looks sizable, Squillace said coal companies sell coal leased from the government for 20 to 30 cents a ton for at least $13 a ton.

Environmentalists have also questioned the Obama administration’s commitment to evaluating the climate risks posed by federal coal, arguing that a true valuation of the social costs of carbon would “keep it in the ground” (ClimateWire, May 17).

With major coal companies in bankruptcy, environmentalists have ramped up concerns about cleanup obligations at mine sites.

As reform proponents launch a new website, Montana rancher Steve Charter said: “While coal executives take home millions of dollars as a reward for running their companies into bankruptcy, Western communities are left to foot the bill for the catastrophic environmental damage and lost royalties they leave behind.”

‘True’ war on coal

Independent analysts attribute the collapse of the coal markets to a host of factors, ranging from cheap and increasingly plentiful natural gas, and China’s economic downturn, to looming carbon-cutting regulations.

The coal industry, in contrast, frequently blames the Obama administration and overregulation. The moratorium, companies say, is one more example of an anti-coal agenda.

In a new report, corporate watchdog group Public Citizen said executives at the three biggest bankrupt coal firms — Alpha Natural Resources Inc., Arch Coal Inc. and Peabody Energy Corp. — have only themselves to blame.

“Bad business decisions are the true ‘war on coal,'” said the report, released this morning.

The document points to all three companies’ making massive purchases in 2011, the success of which hinged on continued growth in demand, namely in China, for metallurgical coal for steel manufacturing.

With prices peaking, Alpha bought Appalachian metallurgical giant Massey Energy Co. for $7.1 billion; Arch bought metallurgical producer International Coal Group for $3.4 billion; and the industry’s top dog — Peabody — sank $5.1 billion into Macarthur Coal’s met reserves in Australia.

But Chinese demand slumped, sending prices plummeting from more than $160 per short ton during the peak to around $100 now, according to the U.S. Energy Information Administration.

Unable to mine their way out of debt in the down market, Alpha, Arch and Peabody have all filed for Chapter 11 bankruptcy protections in attempt to restructure.

“Despite that over the last year all three of your companies declared bankruptcy and plan to lay off thousands of workers and slash retiree benefits, you have benefitted from tens of millions of dollars in record executive pay,” Tyson Slocum, energy program director at Public Citizen, wrote today in a letter to Peabody CEO Glenn Kellow, Arch CEO John Eaves and Alpha CEO Kevin Crutchfield.

According to corporate filings, in 2014, Crutchfield made $7.8 million, more than $1.5 million more than in 2012; Eaves earned $7.3 million, $3 million more than the year before; and Kellow’s predecessor, Gregory Boyce, made nearly $11 million.

Alpha executives recently got a nearly $12 million bonus package approved by a federal bankruptcy judge (Greenwire, May 12). Arch paid executives more than $8 million a day before bankruptcy (ClimateWire, March 16). And Peabody gave executives more than $4.2 million in similar bonuses in 2014. Companies have defended the bonuses as necessary to have stable management through bankruptcy.

Public Citizen demanded that the CEOs redistribute their bonuses to their employees now out of work.

“We encourage you to atone for your financial irresponsibility. Invest your multi-million dollar compensation in a trust fund for your laid off coal miners and their families,” Slocum wrote.

“It’s time to ensure that American taxpayers earn a fair return for the use of their public resources and for companies mining our federal lands to give back to the people of this nation,” he said.

See the article here.