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Rhetoric surrounding coal moratorium 'a lot of noise,' academic says

Coal proponents are cheering the end of the moratorium on federal coal leasing while environmentalists decry the order, but an academic calls the rhetoric "a lot of noise."

"It's not economics, it's politics," Robert Godby, the director of the Center for Energy Economics and Public Policy at the University of Wyoming, told S&P Global Market Intelligence. "The downturn in coal production wasn't due to not having coal to produce, it was due to not having customers to send it to. The moratorium being lifted does nothing to change that."

He said the moratorium was an obvious political target. "That was kind of used to rile up the base in coal production areas, but the rhetoric was not at all consistent with the market realities."

President Donald Trump signed an executive order March 28 that put a halt to the federal coal lease moratorium and other climate directives dating back to the Obama administration.

Ryan Zinke, head of the U.S. Department of the Interior, followed up on Trump's action with a secretarial order to lift the moratorium and reinstate the Royalty Policy Committee to examine the value taxpayers receive from resources like coal on federal land.

The day after Trump's order, the Sierra Club and a coalition of environmental groups announced they would be suing the Trump administration for lifting the moratorium. Sierra Club executive director Michael Brune said in a statement that "Donald Trump and Ryan Zinke have made it clear that they believe America's public lands exist for only one purpose: fossil fuel development. This administration is selling us a bill of goods by handing our public lands to bankrupt coal companies for pennies on the dollar. Now, Americans will lose hundreds of millions of dollars a year to prop up a dirty and dying industry while our public lands are threatened and destroyed."

Godby said lifting the moratorium might help coal producers in other ways.

"The leases that we do see will not be because the coal industry is booming or anticipates a boom, but because they create opportunities to possibly reduce existing production costs or they create operations advantages."

Rick Curtsinger, spokesperson for Cloud Peak Energy Inc., told S&P Global Market Intelligence that the company has leases pending at all three of its mines in the Powder River Basin. "Rescinding the order will end the witch hunt begun by Secretary [Sally] Jewell, rebuke the fake economics used to justify it and allow coal producers to pursue the many maintenance tract leases that have been left in limbo over the past year," he said.

A U.S. Geological Survey paper published at the turn of the millennium for the Rocky Mountains and Great Plains, including the Powder River Basin, estimated the area had about 655,900 tons of strippable coal that had not been leased or mined yet, though it did not indicate how much of this was on public land.

In the U.S., many utilities and other coal buyers are already on track to move away from coal, regardless of the moratorium. According to data compiled by S&P Global Market Intelligence, about 44.1 GW of coal capacity has been or will be scheduled for retirement between 2013 and 2021.

Tom Sanzillo, the director of finance for the Institute for Energy Economics and Financial Analysis, which has the stated mission "to accelerate the transition to a diverse, sustainable and profitable energy economy and to reduce dependence on coal and other non-renewable energy resources," said in a release that the decision to reverse the moratorium "will not affect core trends" and that "we see zero impact on employment."

House Committee on Natural Resources Chairman Rob Bishop, R-Utah, said in a release that the moratorium was a "hallmark policy" of the Obama administration to "stomp out coal" without a plan to replace it. "In the House, we've worked hard to empower states and tribes and promote a diverse energy portfolio. It's reassuring to now have partners at Interior and the White House working to advance these shared goals," he said.

Lindsey Allen, executive director of Rainforest Action Network, called the effort to lift the federal coal moratorium and to officially ignore climate change "willfully ignorant and dangerous" and "another windfall to [Trump's] corporate cronies at the expense of low-income communities and communities of color" in a statement.

"This president wants to return to the days of toxic dumping free-for-alls, black spewing smokestacks, and increasing rates of asthma for children in the most vulnerable neighborhoods across the country — all for the sake of corporate profits for his friends," she said.