January 01, 2013

The Tragic Story of the Federal Coal Leasing Program

Mark Squillace

The federal government owns about eighty-eight billion tons of recoverable coal, or about one-third of all U.S. coal reserves, which amounts to nearly 10 percent of the world’s known reserves of coal. Because the United States currently consumes about one billion tons of coal each year, federal reserves alone could satisfy current domestic consumption rates for more than eighty years. The federal government, as the owner of vast quantities of coal, powerfully influences the market when it decides whether to sell coal. From the earliest days of federal coal policy to the present, the federal government has exercised its authority in a way that undermines the significant public interests associated with this resource. Ideally, the problems with the federal coal leasing program would have been addressed two decades ago when coal sales were booming. But the issues remain critically important today, as coal companies look overseas to expand the market for the federal coal they are producing. This article explores the source of the problems and offers a road map for reforming the leasing program.

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