Center for American Progress

RELEASE: CAP Recommends Market-Based Federal Coal Program Reforms Linked to U.S. Climate Goals
Press Release

RELEASE: CAP Recommends Market-Based Federal Coal Program Reforms Linked to U.S. Climate Goals

Washington, D.C. — For decades, the federal coal program has created a noncompetitive market that is not aligned with U.S. climate goals and that distorts U.S. energy markets, shortchanging taxpayers and the environment. The Center for American Progress has released an issue brief proposing a new approach for leasing coal extraction from federal lands that would provide a better return to taxpayers and allow for coal extraction operations to meet U.S. climate targets.

In the brief released today, the Center for American Progress calls for capping federal coal extraction at levels consistent with U.S. climate goals and auctioning off credits up to that cap. Once those credits are allocated, bidders will submit proposals to the Bureau of Land Management, or BLM, for specific tracts of land—akin to the current lease-by-application process they already use.

CAP’s proposal also calls for the BLM to consider bidder integrity standards, such as past records of environmental and worker safety regulations; ability to meet reclamation obligations; sufficient collateral for future reclamation; and general ethical business standards.

“The current federal coal program does not work for the taxpayers, the economy, or the environment,” said Mary Ellen Kustin, Director of Policy for the CAP Public Lands team and author of the brief. “In fact, the only people it seems to work in favor of are coal executives looking to keep themselves awash in inexpensive supplies of coal. By changing the federal coal program’s priorities to maximize taxpayer return while meeting climate goals, a far more competitive market will emerge, one that does not undermine innovative and clean alternatives to coal.”

One-fifth of all energy-related greenhouse gas emissions come from fossil fuels extracted from federal lands, with coal accounting for more than 60 percent of those emissions. Yet the federal coal program that governs the leasing of federal lands for coal extraction has operated for decades through a noncompetitive process that sells coal at below-market rates; drives down the price of coal; and makes it difficult for clean, affordable alternative energy sources to compete.

Click here to read the brief.

For more information on this topic or to speak with an expert, contact Tom Caiazza at [email protected] or 202.481.7141.