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Amid push to cut coal, feds review mine lease program

The Department of the Interior is leasing millions of acres of federal coal to private mining companies even as the Obama administration ramps up efforts to curb greenhouse gases from coal-burning power plants and natural gas pipelines under the president’s Climate Action Plan.

To environmentalists and some Navajo activists living near coal mines in New Mexico, the disconnect between leasing the coal while clamping down on the climate-changing pollution it causes couldn’t be more stark.

“We have to admit the future of coal is bleak,” Rebecca Sobel of the environmental group WildEarth Guardians said during a public meeting with federal officials in Farmington last week. “We can’t keep mining and burning coal and have any hope of a meaningful reduction in greenhouse gas emissions.”

The federal government is reviewing the coal lease program managed by the Bureau of Land Management. Some experts say the federal government isn’t charging companies high enough royalty rates for mining coal on public lands and that companies have skirted payments for years using loopholes in federal law. In addition, environmentalists say the government needs to tighten bond requirements so communities aren’t left paying to clean up coal waste when mines close.

Interior Department Secretary Sally Jewell called for a review of the federal coal lease program in a meeting in March at the Center for Strategic and International Studies.

“It’s important to have an honest and open conversation about modernizing the federal government’s coal program,” she said at the time. “I have heard many concerns about how the federal government leases coal, the amount of royalty charged and whether taxpayers are getting a fair return from public resources.”

Still, Jewell hasn’t called for an outright end to coal. In her March comments, she said, “Coal is going to continue to be an important part of our nation’s energy mix in the future. But the Government Accountability Office, our Inspector General, and Members of Congress from both sides of the aisle agree that the federal coal program needs reform.”

Jewell and her staff have spent the last few months listening to public comments about how to revamp the federal coal leasing program. The latest meeting was held Thursday in Farmington, the heart of Northern New Mexico’s resource-rich San Juan Basin. The region houses all four of the state’s operating coal mines.

Dozens of people, many wearing “Leave Coal in the Ground” T-shirts, commented during the meeting.

In related news, EPA’s proposed new methane rules could have big impact in New Mexico.

“Coal is not the answer,” said Jake Toledo, a young Navajo man, who told federal officials that his father died after working at the Peabody coal mine on the reservation. “Leave the coal in the ground and respect our way of life.”

Unlike earlier meetings held in Montana, Wyoming and Colorado, where miners packed the meetings, the crowd in Farmington was largely absent mine workers and executives. Less than a handful spoke in favor of coal mining.

Coal mines in New Mexico employ about 1,500 people with a payroll nearing $100 million, according to the state Energy, Minerals and Natural Resources Department.

One of the largest mines, Navajo Mine, is owned by the Navajo Nation and powers the Four Corners Power Plant.

The pay and benefits are good. But the mine has come at a price to worker and community health and the environment, many say.

Coal remains a primary, though dwindling, source of electricity nationwide. In New Mexico, coal accounts for about 60 percent of generated electricity. In the United States, about 40 percent of electricity is fueled by coal. That is expected to decline to 30 percent in the next 25 years, according to the Department of the Interior.

About 40 percent of the coal produced in the United States is from public land. Almost 85 percent of it is from Wyoming’s Powder River Basin.

In the past six years, the federal coal leasing program has approved mining more than 2 billion tons of federal coal, according to an analysis by the Sierra Club. The BLM’s recently released new resource management plans could open up 78.5 billion tons of coal from federal land for mining.

Coal companies pay the LM on coal leases through bonuses, an annual rent payment of $3 per acre or less, and royalties, which are based on the value of coal after it is mined. The BLM currently manages about 5.1 billion tons of coal worth $72 billion, according to information from the federal agency. Coal rents, bonuses and royalties brought in more than $11 billion over the last decade to federal coffers.

The coal mining and power industry, and officials in towns like Farmington dependent on more than 1,000 jobs the industry generates, say regulations have already increased the economic costs.

“Regardless of how you feel about the subject, the regulations have made it more expensive to mine,” said Ray Hagerman, chief executive officer of the Four Corners Economic Development organization. “From an economic perspective, any increases in royalty or regulations will make it that much more expensive.”

For Farmington Mayor Tommy Roberts, whatever happens to coal comes down to the potential for lost jobs and lost revenues to the county and city. “For us, it is all about jobs,” said Roberts, an attorney.

WildEarth Guardians, the Sierra Club and other environmental groups ultimately want coal kept in the ground and not mined to protect the environment. WildEarth Guardians has won two lawsuits in Colorado against the Interior Department over coal mine expansions in that state and has filed a similar lawsuit in New Mexico to prevent the expansion of the San Juan coal mine that feeds the San Juan Generating Station near Farmington.

WildEarth Guardians has pitched a plan to phase out all coal mining in the state in the next 25 years, according to spokesman Jeremy Nichols. He said that gives the region time to transition into a new kind of economy.

The push to reduce coal mining comes at the same time Public Service Company of New Mexico is seeking state approval of a plan to shutter half the coal-fired units at the San Juan Generating Station. The utility company has signed an agreement to buy coal from the San Juan mine through 2017.

PNM has promised no layoffs if the closure plan is approved by state regulators, but to decrease jobs through attrition. “Even in the best-case scenario, this is a big hit. Over time, we lose those jobs as part of our economic engine,” said Roberts, who estimates about 400 plant and mine jobs will end.

Sarah Jane White, a Navajo activist from the Four Corners region, said coal has extracted too high a price. “Shut all the coal mines on the Navajo Nation. We don’t need them. There are other ways to make electricity,” she told federal officials. “We survived before coal came along.”

Coal mines operating in New Mexico

Navajo: Owned by Navajo Nation. Serves Four Corners Power Plant.

San Juan Underground: Land is federal, state and private. Serves San Juan Generating Station. Westmoreland Coal is buying the mine from BHP Billiton.

Lee Ranch: Land is private and state owned near Grants. Serves Western Fuels and Arizona Public Service. Mined by Peabody Coal.

El Segundo: Serves Arizona Public Service Company. Mined by Peabody Energy.

Contact Staci Matlock at 986-3055 or smatlock@sfnewmexican.com. Follow her on Twitter @StaciMatlock.

This article was written by Staci Matlock from The Santa Fe New Mexican and was legally licensed through the NewsCred publisher network.


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