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June 26, 2012

New Report Questions Federal Coal Leasing Policies in the Powder River Basin

SmokestacksThe pollution from coal burning power plants isn’t just making our planet sick – it’s making our families sick. Nearly one-third of all U.S. carbon pollution is attributable to coal burning, and the toxins that coal burning pumps into our air and water leads to asthma attacks, heart attacks, and according to the Harvard School of Public Health nearly $100 billion in health costs annually.

It’s more critical now than ever before that we end our reliance on coal and move toward cleaner forms of energy that can create new American jobs while protecting the air we breathe, the water we drink, and the health of our families. And that means tackling the tough, institutional problems that keep the coal industry raking in billions in profits while everyone else pays the price.

new study identifies alarming issues with coal production on federal lands that demand immediate action. More than 40% of the coal burned in our nation's remaining coal plants is strip-mined on federal public lands in the Powder River Basin (PRB), located in northeastern Wyoming and southeastern Montana. The Department of Interior (DOI), through its agency the Bureau of Land Management (BLM), is responsible for the sale of PRB coal.

The report reveals that for over two decades BLM has been leasing PRB coal to large corporations at a rate far below the fair market value of the coal, costing the federal government $28.9 billion. These corporations are exploiting the BLM's flawed leasing process to tie up billions of tons of American coal reserves in the hope of exporting the coal overseas at a fat profit. U.S. taxpayers are getting the short end of the stick, subsidizing the biggest threat to climate disruption – growth in coal use internationally.

The study appears on the eve of the BLM’s scheduled leasing of 721 million tons of coal to one bidder- Peabody Coal.  This comes on the heels of a similar lease just a few months ago from an adjacent site for over 400 million tons of coal sold to—you guessed it—Peabody Coal.   The massive leases, driven by company applications to mine, continue despite the fact that there is already eight years worth of leased coal production unmined in the Powder River Basin and despite the fact that power plants across America and in China are sitting on excess supplies of coal.  Why the federal government is leasing enormous amounts of coal into a soft, over-supplied market is one of many questions that need answers.

The Department of the Interior has taken significant steps to help prevent further climate disruption by expanding renewable energy development on public lands.  However, the sheer scale of coal leasing on federal lands is hindering those efforts. Worse, leasing federal coal at dirt cheap prices makes it that much harder for American entrepreneurs to build our new energy economy.

The coal industry has enjoyed a long history of subsidies and regulatory loopholes. It's no surprise that they are exploiting the government's leasing program and also no surprise that the General Accountability Office is auditing the program – the first audit in three decades.

The federal coal leasing program is worsening climate disruption, has sold coal for too little, and is being gamed by coal corporations to position themselves in what they hope will be a lucrative export market. With so much coal already leased, the report’s call for an immediate moratorium on the sale of federal coal leases in the Powder River Basin is a reasonable and much-needed time out for this controversial program.  Congress must conduct a thorough review of the federal coal-leasing program.

Rather than continuing to lease our natural resources at pennies on the dollar to the coal industry, let’s refocus our efforts on moving America, and the rest of the world, towards clean energy solutions that keep our families healthy and that work for everyone.

-- Bruce Nilles, Senior Director of Sierra Club's Beyond Coal Campaign

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