Washington Office

January 2017 

Volume 1
Our Vision

To enhance the quality of life for all citizens

through the balanced stewardship of America’s

public lands and resources.

Our Mission

To sustain the health, diversity, and productivity

of the public lands for the use and enjoyment

of present and future generations.
FEDERAL COAL PROGRAM PROGRAMMATIC EIS 

SCOPING REPORT

VOLUME 1- SCOPING REPORT

EXECUTIVE SUMMARY

1. INTRODUCTION

2. BACKGROUND

3. PUBLIC INVOLVEMENT AND PUBLIC SCOPING PROCESS

4. SUMMARY OF COMMENTS RECEIVED

5. FEDERAL COAL LEASING PROGRAM

6. PROGRAMMATIC ENVIRONMENTAL IMPACT STATEMENT

VOLUME 2 - APPENDICES 

A. NOTICE OF INTENT

B. SCOPING MATERIALS 

C. LIST OF COMMENTERS

D. COMMENTS BY ISSUE CATEGORY 

E. ANNOTATED BIBLIOGRAPHY
 

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January 2017 Federal Coal Program Programmatic EIS i 

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TABLE OF CONTENTS 

VOLUME I 

Chapter Page 

EXECUTIVE SUMMARY.............................................................................................................ES-1

Background ..................................................................................................................................................ES-1

Issue Identification .....................................................................................................................................ES-3

Nature of Scoping Report .......................................................................................................................ES-4

1. INTRODUCTION ............................................................................................................ 1-1

2. BACKGROUND............................................................................................................... 2-1

2.1 Introduction ................................................................................................................................... 2-1

2.2 Listening Sessions .......................................................................................................................... 2-1

2.3 Secretarial Order .......................................................................................................................... 2-3

2.4 Notice of Intent ............................................................................................................................ 2-4

3. PUBLIC INVOLVEMENT AND PUBLIC SCOPING PROCESS ............................................. 3-1

3.1 Introduction ................................................................................................................................... 3-1

3.2 Public Scoping ................................................................................................................................ 3-2

3.3 Summary of Scoping Meetings ................................................................................................... 3-2

3.4 Tribal Consultation ...................................................................................................................... 3-4

3.5 Cooperating Agencies ............................................................................................................... 3-10

3.6 Future Public Involvement Activities ...................................................................................... 3-12

4. SUMMARY OF COMMENTS RECEIVED............................................................................ 4-1

4.1 Comment Analysis Process ........................................................................................................ 4-1

4.2 Summary of Unique Submissions .............................................................................................. 4-3

4.3 Form Letter Summary ................................................................................................................. 4-7

4.4 Summary of Comments .............................................................................................................. 4-8

4.5 Issues to be Addressed per the Notice of Intent ............................................................... 4-10

4.6 Comment Summaries ................................................................................................................ 4-11

4.6.1 Data and References ................................................................................................... 4-11

4.6.2 Policy Options .............................................................................................................. 4-11

4.6.3 Issue 1 NEPA Process ................................................................................................. 4-12

4.6.4 Issue 2 Air Quality ....................................................................................................... 4-14

4.6.5 Issue 3 Climate Change .............................................................................................. 4-14

4.6.6 Issue 4 Carbon/Greenhouse Gas Emissions .......................................................... 4-16

4.6.7 Issue 5 Coal Issue Topics ........................................................................................... 4-18

4.6.8 Issue 6 Environmental Justice .................................................................................... 4-26

4.6.9 Issue 7 Public Health and Safety ............................................................................... 4-26

4.6.10 Issue 8 Socioeconomics ............................................................................................. 4-26

4.6.11 Issue 9 Tribal Interests and Native American Concerns ................................... 4-27

4.6.12 Issue 10 State’s Interests and Concerns ................................................................ 4-28

4.6.13 Issue 11 Visual Resources .......................................................................................... 4-28

4.6.14 Issue 12 Water Resources ........................................................................................ 4-28

4.6.15 Issue 13 Biological Resources ................................................................................... 4-28

4.6.16 Issue 14 Other Resource Impacts ........................................................................... 4-29

4.6.17 Issue 15 Renewable Energy ....................................................................................... 4-29
Table of Contents 

ii Federal Coal Program Programmatic EIS January 2017 

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5. FEDERAL COAL LEASING PROGRAM............................................................................. 5-1

5.1 Authorities...................................................................................................................................... 5-1

5.2 Other Federal Agency Roles and Responsibilities ................................................................ 5-3

5.3 Historical Perspective .................................................................................................................. 5-5

5.4 State of the Coal Industry ........................................................................................................... 5-9

5.4.1 Energy in the United States ......................................................................................... 5-9

5.4.2 Major Coal Basins and Characteristics ................................................................... 5-10

5.4.3 Maintenance Leasing.................................................................................................... 5-13

5.4.4 Reserves ......................................................................................................................... 5-14

5.4.5 Production ..................................................................................................................... 5-16

5.4.6 Main Drivers of Coal Demand ................................................................................. 5-18

5.5 Market Projections ..................................................................................................................... 5-25

5.5.1 Energy Information Administration ......................................................................... 5-26

5.5.2 Environmental Protection Agency ........................................................................... 5-27

5.5.3 Coal Exports ................................................................................................................. 5-29

5.6 Greenhouse Gas Emissions ...................................................................................................... 5-30

5.6.1 Upstream Emissions .................................................................................................... 5-31

5.6.2 Downstream Emissions .............................................................................................. 5-33

5.6.3 Quantifying Greenhouse Gas Emissions on Federal Lands ................................ 5-34

5.7 Socioeconomic Considerations ............................................................................................... 5-34

5.7.1 Communities Dependent on Coal Extraction ...................................................... 5-34

5.7.2 Externalities Associated with Coal .......................................................................... 5-46

5.7.3 Fiscal Implications of Coal ......................................................................................... 5-52

5.8 Federal Coal Leasing Process .................................................................................................. 5-56

5.8.1 Land Use Planning ........................................................................................................ 5-57

5.8.2 Competitive Leasing Processes ................................................................................ 5-57

6. PROGRAMMATIC ENVIRONMENTAL IMPACT STATEMENT............................................ 6-1

6.1 Purpose and Need Statement .................................................................................................... 6-1

6.1.1 Need for the Federal Action ....................................................................................... 6-1

6.1.2 Purpose of the Federal Action ................................................................................... 6-5

6.2 Options and Alternatives ............................................................................................................ 6-6

6.2.1 Options to Be Evaluated .............................................................................................. 6-6

6.2.2 Development of Alternatives .................................................................................... 6-26

6.2.3 Options Not Carried Forward for Further Analysis .......................................... 6-32

6.3 Community Transition Considerations ................................................................................. 6-39

6.4 Issues for Analysis ....................................................................................................................... 6-41

6.5 Analytical Approach ................................................................................................................... 6-42

6.6 Energy and Economic Analytical Considerations ................................................................ 6-44

6.7 Schedule ........................................................................................................................................ 6-52

FIGURES Page 

4-1 Submissions by Methods of Submittal Count........................................................................................ 4-3

4-2 Submissions by Affiliation ........................................................................................................................... 4-5

4-3 Commenters by Geographic Area .......................................................................................................... 4-5

4-4 Comments by Issues Category ............................................................................................................... 4-10

5-1 US Energy Consumption by Fuel Type ................................................................................................. 5-10
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January 2017 Federal Coal Program Programmatic EIS iii

Scoping Report 

5-2 Coal Fields of the Lower 48 States ....................................................................................................... 5-11

5-3 Cumulative Tons of Federal Coal Leased Versus Mined ................................................................. 5-15

5-4 Coal Mining – Employment, 1948 – 2015 ............................................................................................ 5-35

5-5 Coal Employment and Production, 1987 – 2015 ............................................................................... 5-37

5-6 Coal Supply Regions .................................................................................................................................. 5-39

5-7 Coal Mine Employment, 2000 – 2015 by Supply Region .................................................................. 5-42

5-8 Change in Coal Employment................................................................................................................... 5-44

6-1 Powder River Basin Production and Nationwide Coal Employment ............................................ 6-50

TABLES Page 

2-1 Listening Sessions ......................................................................................................................................... 2-2

2-2 Listening Session Submissions ................................................................................................................... 2-3

3-1 Public Scoping Meetings ............................................................................................................................. 3-3

3-2 Remote Access of Public Scoping Meetings .......................................................................................... 3-4

3-3 Tribal Consultation Invitees ...................................................................................................................... 3-5

3-4 Cooperating Agency Invitees .................................................................................................................. 3-11

4-1 Submissions by Methods of Submittal ..................................................................................................... 4-3

4-2 Submissions by Affiliation ........................................................................................................................... 4-4

4-3 Commenters by Geographic Area .......................................................................................................... 4-6

4-4 Form Letter Submissions ........................................................................................................................... 4-7

4-5 Petition Submissions ................................................................................................................................... 4-8

4-6 Comments by Issue Category .................................................................................................................. 4-9

4-7 Issue Cross-Walk ....................................................................................................................................... 4-11

5-1 Coal Reserves on Federal Lands ............................................................................................................ 5-16

5-2 Federal Coal Production (tons) .............................................................................................................. 5-17

5-3 Coal Supply Regions .................................................................................................................................. 5-38

5-4 Sociodemographic Characteristics of Coal Supply Regions ............................................................ 5-40

5-5 Coal Mine Employment by Supply Region ........................................................................................... 5-41

5-6 County Comparison Table ...................................................................................................................... 5-43

5-7 Summary of Federal Revenues Associated with Coal Leases ......................................................... 5-53

5-8 State of Wyoming's Distribution of Federal Mineral Revenues ...................................................... 5-54

6-1 Options Proposed for Analysis by Policy Objective ........................................................................... 6-6

6-2 Labor Requirements to Mine Coal ........................................................................................................ 6-49

6-3 Proposed Schedule for the PEIS ............................................................................................................. 6-52
Table of Contents 

iv Federal Coal Program Programmatic EIS January 2017 

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v Federal Coal Program Programmatic EIS January 2017 

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ACRONYMS AND ABBREVIATIONS Full Phrase

AR5 IPCC 2013–2014 Fifth Assessment Report 

BLM Bureau of Land Management 

BOEM Bureau of Ocean Energy Management 

Btu British thermal units 

CEA Council of Economic Advisers 

CEQ Council on Environmental Quality 

CFR Code of Federal Regulations 

CO2 carbon dioxide 

CO2e CO2 equivalent 

PEIS programmatic environmental impact statement 

CPP Clean Power Plan 

DME Office of Valuation Services, Division of Minerals Evaluation 

EIA Energy Information Administration 

EIS environmental impact statement 

EPA Environmental Protection Agency 

FCLAA Federal Coal Leasing Amendments Act of 1976 

FLPMA Federal Land Policy and Management Act of 1976 

FMV fair market value 

GAO Government Accountability Office 

GW gigawatts 

INDC US 2025 Intended Nationally Determined Contribution 

IPM Integrated Planning Model 

LBA lease-by-application 

LCOE levelized cost of electricity 
Table of Contents 

vi Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

MSHA Mine Safety and Health Administration 

NCA3 2014 National Climate Assessment, Climate Change Impacts in the United States 

NEPA National Environmental Policy Act of 1969 

NOx nitrogen oxides 

NRC National Research Council 

OIG US Department of the Interior, Office of Inspector General 

ONRR Office of Natural Resource Revenue 

OSMRE Office of Surface Mining Reclamation and Enforcement 

OVS Office of Valuation Services 

RA regulatory authority 

SMCRA Surface Mining Control and Reclamation Act of 1977 

SO BLM State Office 

SO2 sulfur dioxide 

TWh terawatt hours 

UNFCCC United Nations Framework Convention on Climate Change 

USC United States Code 

USGS US Geological Survey 
 

Volume I
 

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January 2017 Federal Coal Program Programmatic EIS ES-1

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EXECUTIVE SUMMARY

BACKGROUND

In addition to its responsibilities for managing 247 million acres of land and 

other resources, the Bureau of Land Management (BLM) is responsible for 

managing coal leasing on approximately 570 million acres where the coal mineral 

estate is owned by the Federal Government. The BLM manages these resources

on behalf of their owners, the American people. This responsibility includes 

advancing the safe and responsible development of energy resources while 

promoting the conservation and protection of scientific, historic, and 

environmental values of our lands for generations to come.

The BLM currently administers 306 coal leases encompassing over 475,000 

acres in 10 states, with an estimated 7.4 billion tons of recoverable coal. Over 

the last decade, BLM-administered leases have produced over 4 billion tons of 

coal, resulting in the collection of over $10 billion in Federal revenue that is 

shared with the state from which the mineral was mined. The recoverable coal 

currently under lease is estimated to be enough to continue production at 

current levels for approximately 20 years. 

In 2015, 42 percent of all coal produced in the United States came from publicly 

owned land, primarily in the Powder River Basin in Wyoming. Between 80 and 

90 percent of the coal produced in the United States is used for electricity 

generation. In recent years there has been a consistent decline in coal-fired 

electricity generation and, consequently, a decline in coal production. Coal-fired 

electricity made up 50 percent of US generation in 2005 and by 2015 had 

declined to 33 percent. Coal production fell from 1.13 billion to less than 0.9 

billion tons during this same time period.1,2 In 2015, US coal production 

 

1

 US EIA. 2016. 2016 Annual Coal Report. November 3, 2016. Available at http://www.eia.gov/coal/annual/ 

2

 US EIA. 2012. Coal Rank and Minding Method, 1949-2011. September, 2012. Available at https://www.eia.gov/ 

coal/data.php#production 
Executive Summary 

ES-2 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

experienced one of the steepest declines in history, and it is projected to 

decline by an additional 15 percent in 2016.3 Several major coal companies have 

instituted bankruptcy proceedings. Some of these companies have since 

emerged or are in the process of emerging from bankruptcy. 

The last time the Federal coal program received a comprehensive review was in 

the mid-1980s, and most of the existing regulations were promulgated in the 

late 1970s and have been only slightly modified since that time. The direct, 

indirect, and cumulative impacts of the Federal coal program have not been fully 

analyzed under the National Environmental Policy Act (NEPA) in over thirty 

years. This has led to calls from a variety of sources for review of many facets 

of the program, including return to the American taxpayer, climate change 

considerations, resource protection mandates, and process efficiency. 

The Secretary of the Interior is authorized to lease coal as she finds 

“appropriate and in the public interest” (30 United States Code [USC], 

Subsection 201[a][1]). Consideration of the implications of Federal coal leasing 

for climate change, as an extensively documented threat to the health and 

welfare of the American people, falls squarely within the factors to be 

considered in determining the public interest. Moreover, this consideration is 

critical in the development of land use plans where the Secretary must “weigh 

long-term benefits to the public against short-term benefits” (43 USC, 

Subsection 1712[c][7]). Such consideration is an important part of the 

Secretary’s responsibility under the Federal Land Policy and Management Act 

(FLPMA) to manage “the public lands and their various resource values so that 

they are utilized in the combination that will best meet the present and future 

needs of the American people” (43 USC, Subsections 1701[a][7]; 1702[c]).

When resource extraction from public lands is determined to be appropriate, it 

is also incumbent upon the Department of the Interior to ensure that the public 

receives the appropriate compensation for the use of its resources. “No bid 

[on a coal lease tract] shall be accepted which is less than the fair market value, 

as determined by the Secretary, of the coal subject to the lease. Prior to his 

determination of the fair market value of the coal subject to the lease, the 

Secretary shall give opportunity for and consideration to public comments on 

the fair market value” (30 USC, Subsection 201[a][1]). This requirement to 

receive fair market value (FMV) places a floor on the monetary return the public 

must receive once the Secretary determines that it is appropriate and in the 

public interest to lease a coal tract. In other words, in determining where, 

when, and how to lease a coal tract, the Secretary must ensure that the sale of 

this public resource fairly compensates the public by receiving the highest price 

a willing seller would realize when leasing to a willing buyer—as would any party 

seek in selling resources in a commodity market. 

 

3

 US EIA. 2016. Short-Term Energy Outlook. December 2016. Available at http://www.eia.gov/outlooks/steo/pdf/ 

steo_full.pdf 
Executive Summary 

January 2017 Federal Coal Program Programmatic EIS ES-3

Scoping Report 

ISSUE IDENTIFICATION

In the spring of 2015, Secretary of the Interior Sally Jewell called for “an honest 

and open conversation about modernizing the Federal coal program.” The 

Department of the Interior subsequently held listening sessions around the 

country that summer. Hundreds of individuals attended the hearings in person. 

The Department heard from 289 individuals during the sessions and received 

over 94,000 written comments. Through these sessions, the areas of concern 

to a wide variety of interests became clearer. 

As a result, in early 2016 Secretary Jewell issued Secretarial Order 3338 

directing the BLM to prepare a Programmatic Environmental Impact Statement 

(PEIS) under the NEPA to identify and analyze potential leasing and management 

reforms for the Federal coal program. The PEIS provides the BLM with an 

efficient and effective tool to consider a wide range of reasonable reform 

alternatives, evaluate the impacts of those alternatives with a focus on 

cumulative effects, and provide meaningful opportunities for public engagement 

to inform future agency decision-making. 

This scoping report is the first step in the process of reviewing these complex 

and interrelated issues. It will be followed by a Draft PEIS that will further 

analyze and refine the reform options presented here and identify a menu of 

draft alternatives. Following public comment on that Draft PEIS, a Final PEIS will 

be produced with a recommended roadmap for reforming the Federal coal 

program. The final report is expected to be completed in early 2019. 

In the spring of 2016, the BLM published a Notice of Intent to prepare a 

programmatic environmental impact statement to review the Federal coal 

program and to conduct public scoping meetings. That notice initiated the 

formal public scoping process for the PEIS, calling for public information and 

comment. In particular, the Notice of Intent posed questions to the public on 

the following issues identified as areas of concern in the Secretarial Order: 

 How, when, and where to lease 

 Fair return 

 Climate impacts 

 Socioeconomic considerations 

 Exports 

 Energy needs 

The Department of the Interior held six public meetings during the summer of 

2016 in all regions of the country, including key areas of Federal coal 

production. These meetings were attended by about 2,000 people and were 

also either live-streamed or made available in audio. In addition to oral 

comments provided at the meetings, about 214,402 written comments (654 
Executive Summary 

ES-4 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

unique) were received during the comment period, as well as expert reports 

and analyses. 

Invitations have been extended to 72 potential “Cooperating Agencies” as 

defined by the NEPA that would function as partners with the BLM in preparing 

the PEIS. The BLM also has reached out to all federally recognized tribes to 

determine their interest in formal consultation on the PEIS. An initial meeting 

with Cooperating Agencies was held on December 13, 2016, and consultation 

with interested tribes was initiated in the same month. 

NATURE OF SCOPING REPORT

This report is the result of the BLM’s review and consideration of the materials 

and analyses received through the listening sessions, public scoping process, or 

otherwise available. Based on this review, it appears that modernization of the 

Federal coal program is warranted. While energy markets, communities, 

environmental conditions, and national priorities have changed dramatically, the 

program has remained fairly static in its administration over the last thirty years. 

This modernization should focus on ensuring a fair return to Americans for the 

sale of their public coal resources; addressing the coal program's impact on the 

challenge of climate change; and improving the structure and efficiency of the 

coal program in light of current market conditions, including impacts on 

communities. 

In each of these areas additional analysis is necessary prior to the 

recommendation of specific policy choices, in order to provide a complete 

understanding of the likely impacts of various policies on energy markets, 

electricity prices, employment, and other critically important issues. These 

issues will be the focus areas of analysis for the PEIS going forward. However, it 

is possible at this stage in the process to identify the most promising policies for 

consideration. This report sets out these currently available policy ideas for 

addressing these important issues, and the additional data and technical work 

needed to decide specifically how to move forward. In addition, there are some 

simpler good government improvements that can be made without significant 

additional analysis which the scoping report outlines as well. 

This report provides context for considering reform opportunities, and it 

presents preliminary reform options and an analytical framework that will form 

the basis for the PEIS. This report sets out reform options organized by policy 

objectives that align with the Secretarial Order, and it expands upon the reform 

options based on input received. This report also identifies reform options 

received during the scoping process that are not recommended for further 

analysis and sets out the reasons for those recommendations. The reform 

options that will be carried forward for further consideration by the BLM 

include: 
Executive Summary 

January 2017 Federal Coal Program Programmatic EIS ES-5

Scoping Report 

Fair Return 

 Increase royalty rate 

 Implement FMV determination process changes (i.e., transparency 

and consistency) 

 Limit the use and increase the transparency of royalty rate 

reductions 

 Increase rental rate 

 Raise minimum bonus bid 

 Implement inter-tract or modified inter-tract bidding processes to 

increase competition among bidders 

 Evaluate current performance bonding amounts; increase bonding 

levels as necessary 

 Convene a royalty policy commission 

Reduce/Account for Greenhouse Gas Emissions 

 Account for carbon-based externalities through royalty rate 

increase or royalty adder 

 Require compensatory mitigation for greenhouse gas emissions 

 Lease per a carbon budget 

 Create incentives for methane capture 

 No new leasing, except for limited lease modifications 

Improve Resource Protection and Management 

 Improve application of unsuitability criteria; modify criteria as 

necessary 

 Develop strategic leasing plans that address landscape scale issues, 

multiple use, and mitigation planning 

 Account for additional coal-related externalities, such as public 

health and environmental impacts 

 Strengthen lease applicant qualification requirements 

 Apply environmental protections to existing leases 

 Develop regional mitigation strategies for existing and new coal 

development to address public health and environmental impacts 

 Develop best management practices for resource protection 

Increase Lease Process Efficiency 

 Develop strategic leasing plans that allow for tiering of future lease 

decisions 

 Create a pre-application process 
Executive Summary 

ES-6 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

 Create a standardized lease application form and develop an 

electronic application platform 

 Establish a single team to develop FMV estimates 

 Work with other agencies to evaluate means for eliminating 

overlapping requirements and redundant processes 

 Improve transparency in the leasing process 

The BLM believes that there are a number of these options that represent more 

modest reforms that could be combined with almost any combined option 

package or future alternative, or implemented as standalone actions. These 

options represent beneficial program modernization activities and good 

government practices. 

For fair return, these include FMV determination process changes aimed at 

transparency and consistency, limiting the use of royalty rate reductions and 

improving the transparency associated with the use of royalty rate reductions, 

rental rate adjustments to reflect inflation, minimum bonus bid adjustments to 

reflect inflation, and evaluation of current performance bonding amounts. For 

greenhouse gas emissions, this includes creating incentives for methane capture. 

For resource protection and management, this includes strengthening 

requirements for companies bidding on leases, all of which would require 

coordination with the Office of Surface Mining Reclamation and Enforcement 

(OSMRE). These requirements include prohibiting leasing to self-bonded 

companies, ensuring sufficient financial resources, ensuring companies have not 

been cited for major violations of environmental regulations in connection with 

other operations, and verifying companies have been fulfilling reclamation 

obligations in connection with other operations. It also includes developing best 

management practices for resource protection and improving planning to avoid 

land use conflicts, such as through the modification and improved application of 

unsuitability criteria or through the development of strategic coal leasing plans. 

For lease process efficiency, these include standardizing lease application forms, 

developing an electronic platform for the submission of applications, working 

with other agencies to evaluate means for eliminating redundant processes, and 

improving transparency. 

At the Secretary’s direction in connection with Order 3338, the BLM is in the 

process of developing guidance to implement several of these improvements. 

Additional reforms may be implemented prior to completion of the Final PEIS if 

further analysis supports taking action on a more expedited timeframe. 

To demonstrate how the various options could be combined to develop 

alternatives in the PEIS, the report sets out three possible option combination 

packages. Because each option presents its own range of analytic issues and 
Executive Summary 

January 2017 Federal Coal Program Programmatic EIS ES-7

Scoping Report 

because that complexity may be compounded by interactions among the reform 

options if they are implemented in combination, additional analysis is needed 

before these or other combinations of options can be included as alternatives 

for consideration in the PEIS. The Draft PEIS also will analyze a “no action” and 

a “no leasing” alternative. 

Possible Option Combination Package #1 

1. Fair Return 

Increase the royalty rate to reflect the fair return for coal produced on 

Federal land. The BLM would identify the most appropriate metric 

and corresponding royalty rate for Federal coal, reflecting on 

analysis already conducted by other groups such as the Council of 

Economic Advisers (CEA). 

2. Climate Change/Resource Protection 

Require compensatory mitigation for Federal coal leases. The BLM 

would require lessees to carry out or fund activities that 

proportionally offset climate-related impacts, including through 

investment in a fund managed by an entity that takes on the liability 

to proportionally offset those greenhouse gas emissions and 

climate-related impacts. Contribution to the fund would be tied to 

the units of coal produced. Funds could be used for activities 

including, but not limited to, carbon offsets, carbon sequestration, 

climate adaptation, and community resilience. 

3. Leasing Process 

a. Develop strategic leasing plans and utilize modified inter-tract bidding on 

a $/ton or $/British thermal unit (Btu) basis. Strategic leasing plans 

would be developed based on regular reviews of projected 

domestic coal demand (e.g., over a 5-year window) and the role of 

Federal coal resources in meeting domestic energy needs. These 

plans would set lease sales on a regular schedule to accommodate a 

modified inter-tract bidding system. The BLM would determine a 

maximum tonnage of coal or maximum number of Btus to be leased 

consistent with projected demands. Under a modified inter-tract 

leasing process, all interested companies would bid among 

themselves for the right to produce a specified quantity of coal in 

the location of their choice, assuming it is suitable for mining and 

consistent with the approved land use plan and strategic leasing 

plan. To the extent that auctions become more competitive through 

the use of modified inter-tract bidding, resulting in increased bonus 

bids, the need for a higher royalty rate could be revisited on a 

periodic basis. 
Executive Summary 

ES-8 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

b. Develop regional mitigation strategies. Regional mitigation strategies 

would be developed by the BLM to identify and facilitate 

compensatory mitigation opportunities at the regional scale, 

allowing for pre-planning for, and advanced investment in, mitigation 

opportunities. 

4. Community Assistance 

a. Explore use of compensatory mitigation funds to invest in affected 

communities experiencing reduced coal production. The BLM would 

seek to use compensatory mitigation funds to invest in economic 

diversification and workforce development efforts. 

b. Direct a portion of Federal coal revenues to community assistance. The 

BLM would seek to secure Congressional authorization to direct a 

portion of increased Federal coal revenues toward investments in 

impacted communities that support economic diversification, job 

training, mine reclamation, and other community priorities. 

Possible Option Combination Package #2 

1. Fair Return 

Increase the royalty rate to reflect the fair return for coal produced on 

Federal land. The BLM would identify the most appropriate metric 

and corresponding royalty rate for Federal coal, reflecting on 

analysis already conducted by other groups. Because a carbonbased royalty adder, as described under 2, could be instituted in 

combination with or independent of a potential royalty rate increase 

based on fair return principles, the BLM will analyze the effects of 

such changes both individually and cumulatively. 

2. Climate Change/Resource Protection 

Apply a royalty adder to account for carbon-based environmental and 

societal costs of coal production and use ($/ton of coal). A royalty adder

would tie climate costs directly to production/consumption. As a 

price mechanism, a royalty adder would provide price certainty to 

mining operators and downstream purchasers. A royalty adder 

would apply only to new and renewed leases and, therefore, would 

be necessarily phased in over time. The BLM would conduct analysis 

to identify the most appropriate royalty adder taking into account 

downstream regulations and substitution effects, and reflecting on 

analysis already completed by other groups. The BLM would also 

assess the net impact on revenues from such changes, including any 

potential reduction in bonus bids and production. 
Executive Summary 

January 2017 Federal Coal Program Programmatic EIS ES-9

Scoping Report 

3. Leasing Process 

Develop strategic leasing plans and utilize modified inter-tract bidding on 

a $/ton or $/Btu basis. Strategic leasing plans would be developed 

based on regular reviews of projected Federal coal demand (e.g., 

over a 5-year window) and could serve a variety of purposes that 

meet a number of policy objectives, including addressing resource 

management concerns at a landscape level and helping to streamline 

future leasing actions. These plans would set lease sales on a regular 

schedule to accommodate a modified inter-tract bidding system. 

The BLM would determine a maximum tonnage of coal or maximum 

number of Btus to be leased consistent with projected demands. 

Under a modified inter-tract leasing process, all interested 

companies would bid among themselves for the right to produce a 

specified quantity of coal in the location of their choice, assuming it 

is suitable for mining and consistent with the approved land use plan 

and strategic leasing plan. To the extent that auctions become more 

competitive through the use of modified inter-tract bidding, 

resulting in increased bonus bids, the need for a higher royalty rate 

could be revisited on a periodic basis. 

4. Community Assistance 

a. Direct a portion of Federal coal revenues to community assistance. The 

BLM would seek to secure Congressional authorization to direct a 

portion of increased Federal coal revenues toward investments in 

impacted communities that support economic diversification, job 

training, mine reclamation, and other community priorities. 

b. The states’ portion of increased revenues would be available to invest in 

impacted communities experiencing reduced coal production. The 

additional revenues generated by a royalty rate adder would be split 

with states consistent with current law and could be used by states 

to support economic diversification efforts in communities and 

related activities. 

Possible Option Combination Package #3 

1. Fair Return 

Increase the royalty rate to reflect the fair return for coal produced on 

Federal land. The BLM would identify the most appropriate metric 

and corresponding royalty rate for Federal coal, reflecting on 

analysis already conducted by other groups. 

2. Climate Change/Resource Protection 

a. Periodically evaluate and ensure that coal production and associated lifecycle emissions are consistent with the need to reduce net domestic 

greenhouse gas emissions 80 percent below 2005 levels by 2050. This 
Executive Summary 

ES-10 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

tracks to a straight-line reduction from the US 2025 Intended 

Nationally Determined Contribution (INDC),4 and it is also 

consistent with the long-term pathway set forth in the US MidCentury Strategy for Deep Decarbonization.5 The BLM would limit 

the amount of Federal coal leased at a given time based on a carbon 

budget. The Federal coal leasing levels would be premised on a 

carbon budget that is commensurate with Federal coal’s appropriate 

contribution to meeting economy-wide greenhouse gas emission 

reduction targets. In other words, the total amount of coal offered 

and made accessible under Federal leases would contain lifecycle 

carbon dioxide (CO2) emission levels that are less than or equal to 

the anticipated emissions from Federal coal under an INDC 

strategy.6 The BLM would also need to evaluate the effectiveness of 

applying INDC-based limits to Federal coal leasing if and when no 

similar limitations are applied to substitute non-Federal energy 

sources to address concerns over emissions shifting to non-Federal 

coal sources. This potential shifting to non-Federal coal sources 

could reduce the environmental benefit of such limits (i.e., due to 

emissions leakage). 

b. Develop strategic leasing plans. Strategic leasing plans would 

incorporate the carbon budget and set lease sales on a regular 

schedule to accommodate a modified bidding system (see 3a below). 

These strategic plans could help meet a variety of policy objectives, 

including addressing resource management concerns at a landscape 

level and helping to streamline future leasing actions. 

3. Leasing Process 

Use modified inter-tract bidding on a $/ton or $/Btu basis. The BLM 

would determine a maximum tonnage of coal or carbon or 

maximum number of Btus to be leased consistent with the defined 

carbon budget. Under a modified inter-tract leasing process, all 

interested companies would bid among themselves for the right to 

produce a specified quantity of coal in the location of their choice, 

assuming it is suitable for mining and consistent with the approved 

land use plan and strategic leasing plan. To the extent that auctions 

become more competitive through the use of modified inter-tract 

 

4

 Actions described by the United States under the UNFCCC in December 2015 to achieve the long-term goals of 

the Paris Agreement: to hold the increase in global average temperature to well below 2°C, to pursue efforts to 

limit the increase to 1.5°C, and to achieve net zero emissions in the second half of this century. 

5

 The White House. 2016. US Mid-Century Strategy for Deep Decarbonization. November 2016. Available at 

https://www.whitehouse.gov/sites/default/files/docs/mid_century_strategy_report-final.pdf 

6

 One way to implement this approach would be for the BLM to use an economy-wide model to estimate least 

cost compliance strategies for meeting INDCs. The BLM could use the model output to derive anticipated Federal 

coal consumption levels over a 20-year period, and then use that level, in conjunction with reserves already under 

lease, as a limit on the amount of reserves that are leased. 
Executive Summary 

January 2017 Federal Coal Program Programmatic EIS ES-11

Scoping Report 

bidding, resulting in increased bonus bids, the need for a higher 

royalty rate could be revisited on a periodic basis. 

4. Community Assistance 

Direct a portion of Federal coal revenues to investments in communities 

experiencing economic impacts from reduced coal production. The BLM 

would seek to secure Congressional authorization to direct a 

portion of increased Federal coal revenues toward investments in 

communities that support economic diversification, job training, 

mine reclamation, and other community priorities. 

No Action Alternative 

Under the no action alternative, the Federal coal program would continue to be 

administered in the manner in which it is administered currently. Leasing would 

be conducted through lease-by-applications (LBAs). The current means of 

determining FMV, royalty rate reductions, minimum bonus bids, and rental rates 

would remain unchanged. The no action alternative would not address 

concerns raised by numerous parties about the Federal coal program, including 

concerns raised by the Government Accountability Office (GAO), the 

Department of the Interior’s Office of Inspector General (OIG), members of 

Congress, interested stakeholders, and the public. 

No Leasing Alternative 

Under a no leasing alternative, the BLM would issue no new leases for Federal 

coal, except for lease modifications within the defined acreage limitations (960

acres or less7). Existing coal already under lease would not be impacted. 

Administration of existing leases would remain unchanged, including existing 

royalty rates and rental rates. The BLM may also consider combining the no 

new leasing alternative with other reform options aimed at modernizing the 

administration of existing leases as part of separate reform packages or 

alternatives. 

These options and option combination packages are based on the best judgment 

brought to bear based on the comments received and with the data at hand. The 

development of the PEIS will involve detailed analysis of these options and option 

combination packages. Of particular relevance will be analyzing effects on energy 

markets, the energy economy, communities, and the environment. As additional data 

becomes available during preparation of the PEIS, these options and option combination 

packages may be revised. 

With this in mind, the key areas of analysis for the PEIS, many of which were identified 

as priorities by the Secretarial Order, include: return to the taxpayer, climate 

impacts/greenhouse gas emissions, socioeconomic considerations, energy needs 

(including coal production and exports, as well as substitution effects), energy prices, 

 

7As defined in section 432 of the Energy Policy Act of 2005. 
Executive Summary 

ES-12 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

other environmental impacts (e.g., water quality and wildlife), and health impacts. The 

BLM will use the best available science to support its analyses in the PEIS and employ 

sophisticated power sector modeling to determine the potential outcomes of options 

and option combination packages. In conducting this analysis, the BLM will also rely on 

Cooperating Agency expertise and the thoughtful work completed and underway by 

stakeholders and the public. 

This report is intended to provide an educated starting point for the work on the PEIS, 

and a path forward for continuing to involve and tap the expertise of the public who 

care about and know about these public lands and resources. 
January 2017 Federal Coal Program Programmatic EIS 1-1

Scoping Report 

CHAPTER 1 

INTRODUCTION

The Bureau of Land Management (BLM) has undertaken scoping as part of its 

comprehensive review of the Federal coal program and has prepared this 

scoping report consistent with National Environmental Policy Act of 1969 

(NEPA) requirements at Title 40 of the Code of Federal Regulations (CFR), 

Subpart 1501.7. Scoping is the process by which the BLM solicits internal and 

external input on the issues, impacts, and potential alternatives that will be 

addressed in an environmental impact statement (EIS), as well as the extent to 

which those issues and impacts should be analyzed in the NEPA document. 

The objectives of this scoping report are to: 

1. Provide an overview of the scoping process for the BLM’s Coal 

Programmatic Environmental Impact Statement (PEIS) 

2. Provide a summary of the comments received through the scoping 

process 

3. Provide baseline information regarding the Federal coal program and 

establish the context in which the BLM will consider potential reform 

options 

4. Present preliminary reform options for the Federal coal program that 

the BLM will carry forward for further analysis and that may form the 

basis for the alternatives in the PEIS. 

5. Present a preliminary analytical framework for the PEIS 

The scoping report is organized into the following chapters: 

Chapter 2. Background–Provides background information on the BLM’s 

development of the PEIS, including listening sessions held in 2015, Secretarial 

Order 3338, and the Notice of Intent. 
1. Introduction 

1-2 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

Chapter 3. Public Involvement and Public Scoping Process–Describes the 

scoping process undertaken for the PEIS. 

Chapter 4. Summary of Comments Received–Provides summaries of the 

comments received through the scoping process. 

Chapter 5. Federal Coal Leasing Program–Describes the Federal coal program 

and provides baseline information intended to provide context for the BLM’s 

consideration of potential program reform options. This chapter includes: 

authorities, other Federal agency roles and responsibilities, historical 

information, state of the coal industry information, coal leasing and production 

data, market projections for coal, greenhouse gas emissions, socioeconomic 

considerations, and an overview of the Federal coal leasing process. 

Chapter 6. Programmatic Environmental Impact Statement–Provides the BLM’s 

preliminary synthesis of information provided through the scoping process, 

which will provide the foundation for the Draft PEIS. This chapter includes: a 

purpose and need statement, preliminary reform options that meet identified 

policy objectives to be carried forward for further consideration by the BLM, a 

rationale for dismissing some options from further consideration, a framework 

for developing program reform alternatives, issues for analysis, an analytical 

approach, analytical considerations, and a schedule for completion of the PEIS. 
January 2017 Federal Coal Program Programmatic EIS 2-1

Scoping Report 

CHAPTER 2 

BACKGROUND

2.1 INTRODUCTION

The activities that the BLM conducted prior to the initiation of the official NEPA 

process are described in this chapter. 

2.2 LISTENING SESSIONS

On March 17, 2015, Secretary Jewell called for “an honest and open 

conversation about modernizing the Federal coal program.” As previously 

described, the last time the Federal coal program underwent comprehensive 

review was in the mid-1980s, and market conditions, infrastructure 

development, scientific understanding, and national priorities have changed 

considerably since that time. The Secretary’s call was also motivated by

concerns raised by numerous parties about the Federal coal program, including 

concerns raised by the Government Accountability Office (GAO)8, the 

Department’s Office of Inspector General (OIG)

9, members of Congress, 

interested stakeholders, and the public. The concerns raised by the GAO and 

OIG centered on whether taxpayers are receiving fair market value (FMV) for 

leasing Federal coal on public lands. Other commenters raised concerns that the 

current Federal leasing structure lacks transparency and competition, while also 

raising questions regarding current market conditions for the coal industry 

generally and related implications for Federal resources. Stakeholders also 

questioned whether the leasing program results in over-supply of a commodity 

that has significant environmental and health impacts, including impacts on global 

climate change. 

 

8

 GAO. 2013. Coal Leasing: BLM Could Enhance Appraisal Process, More Explicitly Consider Coal Exports, and 

Provide More Public Information. GAO 14-140. December 2013. Available at http://www.gao.gov/products/GAO14-140. 

9

 OIG. 2013. Coal Management Program, US Department of the Interior, Report No. CR-EV-BLM-0001-2012. June 

2013. Available at https://www.doioig.gov/sites/doioig.gov/files/CR-EV-BLM-0001-2012Public.pdf 
2. Background 

2-2 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

In response to the Secretary’s call for a conversation to address these concerns, 

the BLM held five listening sessions regarding the Federal coal program in the 

summer of 2015. These listening sessions offered the public the opportunity to 

comment on how the BLM can best carry out its responsibility to ensure that 

taxpayers receive a fair return for leasing the coal resources managed by the 

BLM on their behalf. The details of the public listening sessions are provided 

below in Table 2-1. In total, 1,068 individuals attended the listening sessions, 

and all of the listening sessions were live-streamed. The BLM heard oral 

comments from 289 individuals during the sessions. 

Table 2-1

Listening Sessions

Location Venue Date Number of 

Attendees

Washington, DC South Main Interior Building

1951 Constitution Ave. NW

July 29, 2015 114

Billings, Montana BLM Montana/Dakotas State Office

5001 Southgate Drive

August 11, 2015 365

Gillette, Wyoming Campbell County Library

2101 South 4-J Road

August 13, 2015 308

Golden, Colorado Marriott Denver West

1717 Denver West Boulevard

August 18, 2015 161

Farmington, New Mexico Courtyard Marriott

560 Scott Avenue

August 20, 2015 120

Total 1,068

In coordination with the listening sessions, the BLM collected written input on 

reform of the Federal coal program. In total, 94,045 submissions were received 

before the comment period closed on September 17, 2015, as reflected in 

Table 2-2, below. The oral and written comments reflected several recurring 

themes. First, numerous stakeholders expressed concern that American 

taxpayers are not receiving a fair return for the leasing of public coal resources. 

Second, many stakeholders expressed concern that the Federal coal program 

conflicts with the Administration’s climate policy and the country’s national 

climate goals, making it more difficult to achieve those goals. Third, there were 

numerous and varying concerns raised about the structure of the Federal coal 

program in light of current market conditions, including how implementation of 

the Federal leasing program affects current and future coal markets, coaldependent communities and companies, and the reclamation of mined lands. 
2. Background 

January 2017 Federal Coal Program Programmatic EIS 2-3

Scoping Report 

Table 2-2

Listening Session Submissions

Type of Written Comment Number of 

Submissions

Percent of 

Total

Form letters from all sources (12 groups)* 92,846 98.7

Written comments submitted at the listening session meetings 1,001 1.1

Other written comments 198 0.2

Total written comments 94,045 100

* Form letter campaigns were initiated by 12 different organizations 

2.3 SECRETARIAL ORDER

In response to the broad range of issues raised over the course of the past few 

years and through the listening sessions, on January 15, 2016, the Secretary of 

the Interior issued Order No. 3338. The Order directs the BLM to carry out 

the following: 

1) A formal, comprehensive review of the Federal coal program through a 

discretionary programmatic EIS under NEPA; 

2) A pause on significant new coal leasing decisions on public lands while the 

programmatic review is underway, with limited, enumerated exemptions and 

exclusions; 

3) A series of good government reforms to improve transparency and program 

administration, including the establishment of a public database to account for 

the carbon emissions from fossil fuels on public lands by the US Geological 

Survey (USGS). 

The Order states: 

“Given the broad range of issues raised over the course of the 

past year (and beyond) and the lack of any recent analysis of the 

Federal coal program as a whole, a more comprehensive, 

programmatic review is in order, building on the BLM’s public 

listening sessions[.] 

...

[T]he purpose of the P[rogrammatic] EIS is to identify, evaluate, 

and potentially recommend reforms to the Federal coal 

program. This review will enable the Department to consider 

how to modernize the program to allow for the continued 

development of Federal coal resources while addressing the 

substantive issues raised by the public, other stakeholders, and 

the Department’s own review of the comments it has received.

... 
2. Background 

2-4 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

The PEIS will provide a vehicle for the Department to 

undertake a comprehensive review of the program and consider 

whether and how the program may be improved and 

modernized to foster the orderly development of BLM 

administered coal on Federal lands in a manner that gives 

proper consideration to the impact of that development on 

important stewardship values, while also ensuring a fair return 

to the American public.” 

The Order directs the Director of the BLM to expeditiously initiate the NEPA 

scoping process by inviting Federal, state, and local agencies; Indian tribes; and 

the public to help identify the environmental issues and reasonable alternatives 

to be examined in the PEIS. Upon completion of the scoping process, the 

Director of the BLM is required to provide a scoping report to the Secretary of 

the Interior along with a proposed schedule for the completion of the PEIS. 

2.4 NOTICE OF INTENT

On March 30, 2016, in accordance with NEPA, the BLM published a Notice of 

Intent to prepare a programmatic environmental impact statement to review 

the Federal coal program and to conduct public scoping meetings10 in the Federal 

Register announcing its intent to prepare a PEIS to review the Federal coal 

program and beginning the formal scoping period. The Notice of Intent, 

included as Appendix A, announced the city and states of the planned public 

scoping meetings, stated that specific dates and locations would be announced at 

least 15 days in advance of each meeting, and listed various methods of 

commenting. 

The Notice of Intent provided background on the Federal coal program, a 

preliminary set of issues that were expected to be addressed in the PEIS, and 

potential modifications to the Federal coal program suggested by stakeholders 

during the listening sessions that could be considered in the PEIS. While the full 

set of issues to be assessed in the PEIS would be defined through the public 

scoping process, the Notice of Intent included the following preliminary set of 

issues: 

 How, when, and where to lease 

 Fair return 

 Climate impacts 

 Other impacts 

 Socioeconomic considerations 

 

10 BLM. 2016. Notice of Intent to Prepare a Programmatic Environmental Impact Statement to Review the Federal 

Coal Program and to Conduct Public Scoping Meetings. Federal Register 81(61):17720. March 30, 2016. Available at 

https://www.gpo.gov/fdsys/pkg/FR-2016-03-30/pdf/2016-07138.pdf 
2. Background 

January 2017 Federal Coal Program Programmatic EIS 2-5

Scoping Report 

 Exports 

 Energy needs 

These issues were originally identified in the Secretarial Order but expanded to 

include additional topics and details raised in the listening sessions. 
2. Background 

2-6 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

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January 2017 Federal Coal Program Programmatic EIS 3-1

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CHAPTER 3 

PUBLIC INVOLVEMENT AND PUBLIC SCOPING 

PROCESS

3.1 INTRODUCTION

Public involvement entails “the opportunity for participation by affected citizens 

in rulemaking, decision making, and planning with respect to the public lands, 

including public meetings or hearings...or advisory mechanisms, or other such 

procedures as may be necessary to provide public comment in a particular 

instance” (Federal Land Policy and Management Act (FLPMA), Section 103(d), 43 

USC 1702(d)). Council on Environmental Quality (CEQ) regulations and BLM 

land use planning regulations both provide for specific points of public 

involvement in the NEPA processes to address local, regional, and national 

interests (40 CFR 1506.6; 43 CFR Subpart 1610). Guidance for implementing 

public involvement can be found in the BLM NEPA Handbook H-1790-111 Public 

involvement requirements of both NEPA and the FLPMA will be satisfied 

through this PEIS process. 

Scoping is an early and open process for 

determining the issues to be addressed and 

identifying the significant issues related to a 

proposed action (40 CFR 1501.7). 

Information collected during scoping may 

also be used to develop the alternatives to 

be addressed in a NEPA document. The 

process has two components: internal 

scoping and external scoping. 

Internal scoping is the use of the BLM and Cooperating Agency staff to help 

determine what needs to be analyzed in a NEPA document conducted through 

 

11 BLM. 2008. Handbook H-1790-1—BLM National Environmental Policy Act. Washington, DC. January 2008. 

The National Environmental 

Policy Act requires that there be 

an early and open process for 

determining the scope of the 

issues to be addressed by a 

study.
3. Public Involvement and Public Scoping Process 

3-2 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

an interdisciplinary process. External scoping is a public process designed to 

reach beyond the BLM. External scoping involves notification and opportunities 

for feedback from other agencies, organizations, tribes, local governments, and 

the public. Its aim is to identify the concerns of high importance to the public. 

Internal and external scoping help ensure the following: 

 That issues are identified early and are properly studied 

 That issues of no concern do not consume time and effort 

 That the proposed action and alternatives are balanced, thorough, 

and implementable 

The BLM follows the public involvement requirements documented in CEQ

regulations implementing NEPA (40 CFR1501.7 (scoping) and 1506.6 (public 

involvement)). The BLM also follows public involvement requirements described 

in the Department of the Interior regulations implementing NEPA (43 CFR, Part 

46). 

The BLM solicits comments from 

relevant agencies and the public, 

organizes and analyzes all comments 

received, and then distills them to 

identify issues that will be addressed 

during the NEPA process. These 

issues help define the scope of 

analysis for the EIS and are used to 

develop alternatives to the proposed 

action. 

3.2 PUBLIC SCOPING 

The formal public scoping period began on March 30, 2016, with the publication 

of a Notice of Intent in the Federal Register (see Chapter 3, Notice of Intent, 

included as Appendix A). 

The Notice of Intent provided an overview of the project and advertised six 

public scoping meetings. The BLM advertised the scoping meeting locations and 

times on the project website and through local media, including press releases 

and newspaper advertisements. A sample newspaper advertisement is included 

in Appendix B, Scoping Materials. 

3.3 SUMMARY OF SCOPING MEETINGS

The BLM hosted six public scoping meetings 

to provide the public with opportunities to

learn about the project and the NEPA process 

and to offer comments. The Notice of Intent 

announced that the BLM would hold public 

scoping meetings at locations across the 

1,943 individuals attended 

scoping meetings held in 6 

locations throughout the US

from May through June 

2016.

A Notice of Intent, an official legal 

notice published in the Federal 

Register, announces that a Federal

agency is beginning the preparation of 

an EIS and often includes information 

about the public scoping process.
3. Public Involvement and Public Scoping Process 

January 2017 Federal Coal Program Programmatic EIS 3-3

Scoping Report 

country. The actual dates, meeting locations and times, and instructions for 

providing comments were announced via a press release (see Appendix B) and 

the project website: https://www.blm.gov/programs/energy-andminerals/coal/coal-peis. The details of the public scoping meetings are provided 

in Table 3-1, below. 

Table 3-1

Public Scoping Meetings

Location Venue Date Livestreamed?

Number 

of 

Attendees

Casper, Wyoming Casper Events Center

One Events Drive

May 17, 2016 Yes 268

Salt Lake City, Utah Salt Palace Convention Center

90 South West Temple 

May 19, 2016 No 

(audio only)

550

Knoxville, Tennessee Tennessee Theatre 

604 South Gay Street

May 26, 2016 No 

(audio only)

115

Seattle, Washington Sheraton Seattle Downtown

1400 6th Avenue

June 21, 2016 Yes 309

Grand Junction, 

Colorado

Avalon Theatre 

645 Main Street

June 23, 2016 No 

(audio only)

354

Pittsburgh, 

Pennsylvania 

Pittsburgh Convention Center 

1000 Fort Duquesne Boulevard

June 28, 2016 Yes 47

Total 1,943

Note: Meetings were from 8 a.m. to 4 p.m., except for Casper, which was 8:30 a.m. to 4 p.m., and Pittsburgh, which 

was 11 a.m. to 7 p.m.

Each meeting began with a two-hour 

sign-in and speaker sign-up period. 

During this time, attendees had the 

opportunity to sign into the meeting 

and register their contact information 

for the mailing list. Attendees could also 

sign up for two-minute speaking slots by 

getting a speaker card (see Appendix 

B). Speaker cards were numbered 

sequentially so that attendees would 

speak in the order that they arrived. 

After the registration period, the BLM’s contractor, Environmental Management 

and Planning Solutions (EMPSi), provided welcoming remarks, including an

explanation of the meeting format. This was followed by a PowerPoint 

Scoping Meetings included a 

PowerPoint Presentation with 

background information on the 

Federal coal program and an 

opportunity for public comment on 

a first-come, first-served basis.
3. Public Involvement and Public Scoping Process 

3-4 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

presentation given by the BLM (see Appendix B). The presentation included 

background information on the Federal coal program, explained the issues that 

the PEIS will consider, and provided specific topics for which the BLM is seeking 

public input. In addition, background information on the reform of the Federal 

coal program (including a Questions and Answers sheet and Secretarial Order 

3338) was provided in handouts (see Appendix B).

At the conclusion of the presentation, EMPSi opened the meeting to public 

comments. Attendees who wished to speak were offered the opportunity 

according to the number on their speaker cards; these were given out 

sequentially, on a first-come, first-served basis, determined by sign-in order. 

Once all speakers with speaker cards had spoken, the BLM offered the 

opportunity for anyone else to speak. Meetings ended when there were no 

more attendees who wished to speak. 

As noted in Table 3-2, below, the meetings in Casper, Seattle, and Pittsburgh 

were live-streamed. The meetings in Salt Lake City, Knoxville, and Grand 

Junction were available for listening via a phone conference line. Information on 

how to access these meetings was made available to the public on the project 

website. 

Table 3-2

Remote Access of Public Scoping Meetings

Location Live-stream 

Attendees

Casper, Wyoming 1,102

Seattle, Washington 420

Pittsburgh, Pennsylvania 147

Location

Audio Attendee

(number of 

phone lines)

Salt Lake City, Utah 214

Grand Junction, Colorado 24

Knoxville, Tennessee 93

3.4 TRIBAL CONSULTATION

The United States has a unique legal relationship with American Indian tribal 

governments as set forth in the Constitution of the United States, treaties, 

Executive Orders (e.g., Executive Order 13175), federal statutes, federal policy, 

and tribal requirements, which establish the interaction that must take place 

between federal and tribal governments. An important basis for this relationship 

is the trust responsibility of the United States to protect tribal sovereignty, selfdetermination, tribal lands, tribal assets and resources, and treaty and other 

federally recognized and reserved rights. Additionally, tribal consultation is 

required by the National Historic Preservation Act (54 USC 300101, et seq.). 

Tribal consultation is undertaken by the BLM to identify the cultural values, 
3. Public Involvement and Public Scoping Process 

January 2017 Federal Coal Program Programmatic EIS 3-5

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religious beliefs, traditional practices, and legal rights of Native American people, 

which could be affected by the BLM’s actions on Federal lands. 

Given the national focus of the PEIS and potential for decisions made through 

the PEIS to impact resources and values of Tribes across the United States, the 

BLM sent letters to all federally recognized tribes asking if they wanted to 

consult with the BLM on the PEIS. The BLM sent Tribal consultation invitation 

letters on October 3, 2016, to 212 tribal entities (see Table 3-3) and initiated 

tribal consultation with interested tribes in December 2016. 

Table 3-3

Tribal Consultation Invitees

Tribal Invitee State

Absentee Shawnee Tribe OK

Alabama Quassarte Tribal Town TX

Alabama-Coushatta Tribe TX

All Indian Pueblo Council NM

Apache Tribe of Oklahoma OK

Arctic Slope Regional Corporation AK

Assiniboine Sioux Tribe MT

Atqasuk Corporation AK

Atqasuk Village AK

Blackfeet Tribal Business Council MT

Blue Lake Rancheria CA

Bureau of Indian Affairs MT

Caddo Nation OK

Canoncito Navajo Band, Tohajiilee Chapter NM

Catawa Indian Nation SC

Cherokee Nation OK

Cheyenne River Sioux Tribe SD

Cheyenne-Arapaho Tribes OK

Chickasaw Nation OK

Chippewa Cree Tribe MT

Choctaw Nation of Oklahoma TX

Citizen Potawatomi Nation OK

City of Anaktuvuk Pass AK

City of Atqasuk AK

City of Barrow AK

City of Kaktovik AK

City of Nuiqsut AK

City of Point Hope AK

City of Wainwright AK

Colorado River Indian Tribes AZ

Comanche Nation OK

Confederated Salish and Kootenai Tribes MT

Confederated Tribes of the Gosute Reservation UT

Cook Inlet Region, Inc. AK
3. Public Involvement and Public Scoping Process 

3-6 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

Table 3-3

Tribal Consultation Invitees

Tribal Invitee State

Crow Creek Sioux Tribe SD

Crow Tribe MT

Cully Corporation, Inc. AK

Delaware Nation OK

Delaware Tribe of Indians OK

Eastern Band of Cherokee Indians NC

Eastern Shawnee Tribe MO

Euchee Tribe of Indians OK

Five Sandoval Indian Pueblos NM

Flandreau Santee Sioux Tribe SD

Fort Belknap Indian Community MT

Fort Mohave Tribe CA

Fort Peck Tribes MT

Fort Sill Apache Tribe of Oklahoma OK

Gila River Indian Community Council AZ

Hopi Tribal Council AZ

Inupiat Community of the Arctic Slope AK

Iowa Tribe of Kansas and Nebraska KS

Iowa Tribe of Oklahoma OK

Jena Band Choctow Indians LA

Jicarilla Apache Nation NM

Kaktovik Inupiat Corporation AK

Kansas Kickapoo Tribe KS

Kaw Nation OK

Kialegee Tribal Town OK

Kickapoo Traditional Tribe of Texas TX

Kickapoo Tribe of Oklahoma OK

Kiowa Tribe of Oklahoma OK

Kuukpik Corporation AK

Little Shell Tribe of Chippewa Indians MT

Lower Brule Sioux Tribe SD

Lower Sioux Indian Community MN

Mescalero Apache Tribe NM

Miami Nation OK

Mississippi Band of Choctaw Indians MS

Modoc Tribe OK

Morongo Band Mission Indians CA

Muscogee (Creek) Nation OK

Naqragmiut Tribal Council AK

Native Village of Barrow Inpuiat Traditional Government AK

Native Village of Kaktovik AK

Native Village of Nuiqsut AK

Native Village of Point Hope AK

Native Village of Point Lay AK

Navajo Nation AZ
3. Public Involvement and Public Scoping Process 

January 2017 Federal Coal Program Programmatic EIS 3-7

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Table 3-3

Tribal Consultation Invitees

Tribal Invitee State

Navajo Nation Council AZ

Navajo Nation Division of Natural Resources AZ

Navajo Nation Oil and Gas Company AZ

Navajo Nation, Aneth Chapter UT

Navajo Nation, Mexican Water Chapter AZ

Navajo Nation, Oljato Chapter UT

Navajo Nation, Red Mesa Chapter UT

Navajo Nation, Teecnospos Chapter AZ

Navajo Nation, Alamo Chapter NM

Navajo Nation, Baahaali Chapter NM

Navajo Nation, Baca/Prewitt Chapter NM

Navajo Nation, Becenti Chapter NM

Navajo Nation, Beclabito Chapter NM

Navajo Nation, Burnham Chapter NM

Navajo Nation, Casamero Lake Chapter NM

Navajo Nation, Chichiltah Chapter NM

Navajo Nation, Churchrock Chapter NM

Navajo Nation, Counselor Chapter NM

Navajo Nation, Coyote Canyon Chapter NM

Navajo Nation, Crownpoint Chapter NM

Navajo Nation, Crystal Chapter NM

Navajo Nation, Gadii ahi/To'Koi Chapter NM

Navajo Nation, Hogback Chapter NM

Navajo Nation, Huerfano Chapter NM

Navajo Nation, Iyanbito Chapter NM

Navajo Nation, Lake Valley Chapter NM

Navajo Nation, Little Water Chapter NM

Navajo Nation, Manuelito Chapter NM

Navajo Nation, Mariano Lake Chapter NM

Navajo Nation, Mexican Springs Chapter NM

Navajo Nation, Minerals Department AZ

Navajo Nation, Nageezi Chapter NM

Navajo Nation, Nahodishgish Chapter NM

Navajo Nation, Naschitti Chapter NM

Navajo Nation, Nenahnezad Chapter NM

Navajo Nation, Newcomb Chapter NM

Navajo Nation, Ojo Encino Chapter NM

Navajo Nation, Pinedale Chapter NM

Navajo Nation, Pueblo Pintado Chapter NM

Navajo Nation, Ramah Chapter NM

Navajo Nation, Red Lake #18 Chapter NM

Navajo Nation, Red Rock Chapter NM

Navajo Nation, Rock Springs Chapter NM

Navajo Nation, San Juan Chapter NM

Navajo Nation, Sanostee Chapter NM
3. Public Involvement and Public Scoping Process 

3-8 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

Table 3-3

Tribal Consultation Invitees

Tribal Invitee State

Navajo Nation, Sheepsprings Chapter NM

Navajo Nation, Shiprock Chapter NM

Navajo Nation, Smith Lake Chapter NM

Navajo Nation, Standing Rock Chapter NM

Navajo Nation, Thoreau Chapter NM

Navajo Nation, Toadlena/Two Grey Hills Chapter NM

Navajo Nation, Tohatchi Chapter NM

Navajo Nation, Torreon Chapter NM

Navajo Nation, Tsayatoh Chapter NM

Navajo Nation, Twin Lakes Chapter NM

Navajo Nation, Upper Fruitland Chapter NM

Navajo Nation, Whitehorse Lake Chapter NM

Navajo Nation, Whiterock Chapter NM

Navajo Utah Commission UT

National Council of American Indians (NCAI) Washington, DC

Nez Perce Tribe ID

North Slope Borough AK

Northern Arapahoe Nation WY

Northern Cheyenne Tribe MT

Nunamiut Corporation, Inc. AK

Oglala Sioux Tribe SD

Ohkay Owingeh NM

Olgoonik Corporation AK

Osage Nation OK

Otoe-Missouria Tribe OK

Ottawa Tribe OK

Pala Band Mission Indians CA

Pamunkey Tribe VA

Pawnee Nation of Oklahoma OK

Peoria Tribe of Indians OK

Poarch Band of Creek Indians AL

Ponca Nation OK

Prairie Band Potawatomi Nation KS

Pueblo of Acoma NM

Pueblo of Cochiti NM

Pueblo of Isleta NM

Pueblo of Jemez NM

Pueblo of Laguna NM

Pueblo of Nambe NM

Pueblo of Picuris NM

Pueblo of Pojoaque NM

Pueblo of San Felipe NM

Pueblo of San Ildefonso NM

Pueblo of Sandia NM

Pueblo of Santa Ana NM
3. Public Involvement and Public Scoping Process 

January 2017 Federal Coal Program Programmatic EIS 3-9

Scoping Report 

Table 3-3

Tribal Consultation Invitees

Tribal Invitee State

Pueblo of Santa Clara NM

Pueblo of Santo Domingo NM

Pueblo of Taos NM

Pueblo of Tesuque NM

Pueblo of Zia NM

Pueblo of Zuni NM

Pyramid Lake Paiute Tribe NV

Quapaw Tribe OK

Quechan Tribe AZ

Rosebud Sioux Tribe of Indians SD

Sac & Fox Nation of Missouri in Kansas & Nebraska KS

Sac and Fox Tribe OK

Salt River-Pima Maricopa Indian Community AZ

San Carlos Apache Tribe AZ

Santee Sioux Tribe of Nebraska NE

Seminole Nation OK

Seminole Tribe of Florida FL

Seneca-Cayuga Tribe OK

Shawnee Tribe OK

Shoshone Bannock Tribes ID

Shoshone Tribe of Wind River Indian Reservation WY

Sisseton-Wahpeton Oyate Tribes SD

Soboba Band Mission Indians CA

Southern Ute Tribe CO

Spirit Lake Sioux Nation ND

Standing Rock Sioux Tribe ND

Thlopthlocco Tribal Town OK

Three Affiliated Tribes: Mandan, Hidatsa, and Arikara Nation ND

Tikigaq Corporation AK

Tohono O'Odham Nation of Arizona AZ

Tonkawa Tribe OK

Turtle Mountain Band of Chippewa ND

Ukpeagvik Inupiat Corporation AK

United Keetoowah Band of Cherokees OK

Ute Indian Tribe UT

Ute Mountain Ute CO

Wainwright Traditional Council AK

White Mesa Ute Administration UT

White Mountain Apache Tribe AZ

Wichita & Affiliated Tribes OK

Wyandotte Nation OK

Yankton Sioux Tribe Bus. & Claims Committee SD

Ysleta del Sur Pueblo TX

Total number of Tribal invitations: 212
3. Public Involvement and Public Scoping Process 

3-10 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

3.5 COOPERATING AGENCIES

The Cooperating Agency role derives from NEPA, which calls on Federal, state, 

and local governments to cooperate with the goal of achieving “productive 

harmony” between humans and their environment (42 USC, Sections 4321-

4347). The CEQ regulations that implement NEPA authorize the lead Federal 

agency to invite State, local, and tribal governments, as well as other Federal 

agencies, to serve as Cooperating Agencies in the preparation of environmental 

impacts statements (40 CFR, Subparts 1501.5, 1501.6). 

The Cooperating Agency relationship is distinctive, moving beyond consultation to 

engage officials and staff of other agencies and levels of government in working 

partnerships. The Cooperating Agencies share skills and resources to help shape 

the BLM environmental analyses to better reflect the policies, needs, and 

conditions of their jurisdictions and the citizens they represent. The benefits of 

enhanced collaboration among agencies in preparing NEPA analyses are as follows: 

 Disclosing relevant information early in the analytical process 

 Applying available technical expertise and staff support 

 Avoiding duplication with other Federal, state, tribal, and local 

procedures 

 Establishing a mechanism for addressing intergovernmental issues 

State agencies, local governments, tribal governments, and other Federal 

agencies may serve as Cooperating Agencies. Cooperating Agency eligibility is 

defined as any Federal agency other than a lead agency that has jurisdiction by 

law or special expertise with respect to any environmental impact. A state or 

local agency with similar qualifications may be a Cooperating Agency. When the 

effects are on a reservation, an Indian tribe may by agreement with the lead 

agency become a Cooperating Agency (40 CFR, Subpart 1508.5). 

“Jurisdiction by law” means agency authority to approve, veto, or finance all or 

part of the proposal (40 CFR, Subpart 1508.15). “Special expertise” means 

statutory responsibility, agency mission, or related program experience (40 

CFR, Subpart 1508.26). 

In accordance with 40 CFR, Subpart 1501.6, the BLM requested participation of 

Cooperating Agencies in the preparation of the PEIS. This included Federal 

agencies with jurisdiction by law or special expertise. In addition, the BLM 

invited state government representation from those states and counties where 

active coal leases exist. The BLM invited a total of 72 agencies that were eligible 

for Cooperating Agency status. The BLM requested a response by October 26, 

2016. Table 3-4 lists the Federal, state and local agencies that were invited as 

Cooperating Agencies. 
3. Public Involvement and Public Scoping Process 

January 2017 Federal Coal Program Programmatic EIS 3-11

Scoping Report 

Table 3-4

Cooperating Agency Invitees

Federal Invitees

Fish and Wildlife Service

Office of Surface Mining Reclamation and Enforcement

Bureau of Ocean Energy Management

Environmental Protection Agency

US Forest Service

Bureau of Indian Affairs 

Office of Valuation Services

Energy Information Administration

Office of Natural Resources Revenue 

National Park Service

US Geological Survey

Total invitations sent to Federal entities: 11

State Invitees

Alabama

Arkansas

Colorado

Kentucky

Montana

North Dakota

New Mexico 

Ohio

Oklahoma

Utah

Washington

West Virginia

Wyoming

Total invitations sent to state entities: 13

County Invitees

Jefferson County, Alabama 

Tuscaloosa County, Alabama 

Walker County, Alabama 

Scott County, Arkansas

Sebastian County, Arkansas 

Delta County, Colorado

Garfield County, Colorado

Gunnison County, Colorado

Las Animas County, Colorado

Moffat County, Colorado

Rio Blanco County, Colorado

Routt County, Colorado

Clay County, Kentucky 

Floyd County, Kentucky 

Leslie County, Kentucky 

Big Horn County, Montana 

Fallon County, Montana 

Musselshell County, Montana 
3. Public Involvement and Public Scoping Process 

3-12 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

Table 3-4

Cooperating Agency Invitees

Richland County, Montana 

Rosebud County, Montana 

McLean County, North Dakota

Mercer County, North Dakota

Williams County, North Dakota

McKinley County, New Mexico 

San Juan County, New Mexico 

Morgan County, Ohio 

Perry County, Ohio 

Haskell County, Oklahoma

Latimer County, Oklahoma

Le Flore County, Oklahoma

Carbon County, Utah 

Emery County, Utah 

Kane County, Utah 

Salt Lake County, Utah 

Sanpete County, Utah 

Sevier County, Utah 

Lewis County, Washington 

Wayne County, West Virginia 

Campbell County, Wyoming 

Carbon County, Wyoming 

Converse County, Wyoming 

Lincoln County, Wyoming 

Sweetwater County, Wyoming 

Uinta County, Wyoming 

Total invitations sent to county entities: 48

Total invitations sent: 72

In accordance with the Department of the Interior regulations implementing 

NEPA, the BLM must consider any request by an eligible government entity to 

participate as a Cooperating Agency (43 CFR, Subpart 46.225[c]). The request 

must be evaluated against Cooperating Agency eligibility criteria—jurisdiction by 

law or special expertise. Note that Campbell County, Wyoming, and the State 

of Wyoming requested to be Cooperating Agencies in their scoping comment 

letters; these groups were also included on the invitation list. 

All designated Cooperating Agencies will sign memoranda of understanding with 

the BLM. The BLM held an initial meeting with Cooperating Agencies in 

December 2016. 

3.6 FUTURE PUBLIC INVOLVEMENT ACTIVITIES 

Future public involvement for this NEPA effort includes public review and 

comment on the Draft PEIS and public review of the Final PEIS. The BLM will 

continue to conduct public outreach via newsletters, news releases, the project 

website, and other media throughout the PEIS process. 
January 2017 Federal Coal Program Programmatic EIS 4-1

Scoping Report 

CHAPTER 4 

SUMMARY OF COMMENTS RECEIVED 

4.1 COMMENT ANALYSIS PROCESS

All written submissions postmarked or received on or before September 15, 

2016, are documented in this scoping summary report. Submissions received 

after this date are not incorporated in this report, but these and any other 

comments received throughout the PEIS process will be considered in the 

development of the PEIS and alternatives formulation, as appropriate. 

Written comments were collected via the following methods: 

 Project e-mail account at 

BLM_WO_Coal_Program_PEIS_Comments@blm.gov

 E-mail account at blm_wo_coal_comments@blm.gov 

 US Postal Service 

 Delivered in person at public scoping meetings or to the 

Washington, DC office of BLM 

The most common format used for submissions was e-mail. A list of 

commenters is provided in Appendix C, List of Commenters. 

The public could also provide verbal comments at the scoping meetings, which 

were documented by a court reporter. A transcript of all verbal comments was 

provided for each meeting, and these comments were also considered in the 

comment analysis process. 

The BLM screened each written submission to determine if it was a form letter 

or a unique submission. Form letters are typically created by an organization and 

then circulated to individuals for submittal to the BLM. Unique submissions are 

those with distinct, unique text and not part of a form letter. The BLM worked 
4. Summary of Comments Received 

4-2 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

with representatives from organizations initiating form letter campaigns to 

ensure that all copies of form letters were received. 

A copy of all unique submissions and a representative copy of each form letter 

were made available for public review on the project website on September 29, 

2016. 

All unique submissions were assigned a submission tracking identifier and 

commenter information, and submission text was entered into a comment 

analysis database. The text of each unique submission was then reviewed to 

determine if it contained substantive comments. Although all comments 

received through the scoping process have been considered by the BLM, 

substantive comments are defined in the BLM NEPA Handbook (Section 6.9.2.1) 

as comments that do one or more of the following: 

 Raise issues that the BLM has not considered or reinforce issues 

that the BLM has already identified 

 Present data or information that can be used when developing 

alternatives 

 Present reasonable alternatives or reform options 

 Present data or information that the BLM can use when it considers 

the impacts of the alternatives 

 Raise concerns using reasoning; they may include concerns 

regarding public land resources, BLM-administered lands, or mineral 

estate in the project area 

In accordance with the BLM NEPA Handbook (Section 6.9.2.1), comments that 

are not considered substantive include: 

 Those in favor of or against an action without any reasoning, such as 

“I don’t like ____,” without providing any rationale

 Those without justification or supporting data, such as “allow more 

development”

 Those that provide background supporting information not directly 

related to the action 

All substantive comments were 

categorized according to issue topic 

categories, as detailed below. Details for 

unique submissions are included below, 

in Section 4.2, Summary of Unique 

Submissions, followed by information on 

form letters and petitions received in 

Section 4.3, Form Letter Summary. 

The BLM received 1,118 unique 

submissions via email, mail, and 

at public meetings.
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-3

Scoping Report 

Information from these comments, including key issues, data, and other 

information from the public, was queried to prepare this scoping summary 

report. 

4.2 SUMMARY OF UNIQUE SUBMISSIONS 

The BLM received 1,118 unique submissions out of 214,866 total submissions. 

Table 4-1 and Figure 4-1, below, show the submission methods for the 

unique submissions. Of the 1,118 unique submissions, most were comments 

offered verbally at the public meetings (41.5 percent of total submissions), 

followed by comments submitted by e-mail (37.9 percent of total submissions). 

When multiple copies of a submission were received from different sources 

(e.g., submitted via e-mail and mail) only the original copy was included in the 

totals. 

Table 4-1

Submissions by Methods of Submittal

Submission Method Count Percent of Total

E-mail 424 37.9

Mail 47 4.2

Paper copy submitted at a public meeting 183 16.4

Public meeting transcript 464 41.5

Total Submissions 1,118 100

Note: Includes unique submissions only

Figure 4-1. Submissions by Methods of Submittal Count 
4. Summary of Comments Received 

4-4 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

Figure 4-2 and Table 4-2, below, show the affiliation for each submission. 

Most submissions (68.5 percent) were provided by individuals, followed by 

organizations (nonprofit and citizen’s groups; 18.0 percent). Letters received via 

mail or e-mail were considered to represent an organization, government, or 

other group when commenters signed them using official titles from these 

groups. (Note that speakers at the public scoping meeting often cited affiliation 

with organizations or other groups, and their comments were therefore 

classified as representing these groups. The BLM recognizes that these 

commenters may not be official representatives of these groups, so submissions 

from organizations may be over-represented.) Appendix C, List of 

Commenters, includes the organization affiliation, if provided, by commenters. 

The 1,118 unique submissions were submitted by 1,239 commenters.12 

Table 4-3 and Figure 4-3, below, show the location of commenters by state 

for unique submissions; 309 commenters (25.5 percent) did not provide state 

location information. Most of these commenters submitted their comments by 

e-mail and, therefore, did not have location information associated with their 

entry. Of the commenters who did provide location information, most were 

from Washington (15.0 percent), followed by Colorado (12.6 percent). The 

largest numbers of commenters were from those locations where public 

meetings were held and very well attended, with the exception of the state of 

Montana. 

Table 4-2

Submissions by Affiliation

Affiliation Count Percent of Total

Anonymous 1 0.1

Elected official 20 1.8

Federal government 8 0.7

Individual 766 68.5

Local government 34 3.0

Organization (nonprofit or citizens 

groups)

201 18.0

Private industry 57 5.1

State government 21 1.9

Trade group 7 0.6

Tribal government 3 0.3

Total Submissions 1,118 100

Note: Includes unique submissions only

 

12 There are more commenters than submissions because some submissions had multiple commenters associated 

with them. 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-5

Scoping Report 

Figure 4-2. Submissions by Affiliation 

Figure 4-3. Commenters by Geographic Area
4. Summary of Comments Received 

4-6 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

Table 4-3

Commenters by Geographic Area

Location Number of 

Commenters

Percentage of Total 

Commenters

Alabama 6 0.5

Arizona 3 0.2

California 7 0.6

Colorado 156 12.6

Connecticut 1 0.1

Georgia 1 0.1

Illinois 3 0.2

Kentucky 9 0.7

Maine 1 0.1

Maryland 2 0.2

Massachusetts 1 0.1

Minnesota 1 0.1

Montana 147 11.9

Nevada 2 0.1

New Hampshire 1 0.1

New Mexico 10 0.8

New York 7 0.6

North Carolina 2 0.2

North Dakota 4 0.3

Ohio 2 0.2

Oklahoma 1 0.1

Oregon 17 1.4

Pennsylvania 25 2.0

Rhode Island 1 0.1

Tennessee 38 3.1

Texas 4 0.3

Utah 131 10.6

Vermont 1 0.1

Virginia 7 0.6

Washington 182 14.7

Washington, DC 16 1.3

West Virginia 1 0.1

Wisconsin 2 0.2

Wyoming 138 11.1

No state information provided 309 25.0

Total Commenters 1,239 100

Note: Includes unique submissions only. Some submissions had more than one 

commenter.
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-7

Scoping Report 

4.3 FORM LETTER SUMMARY

In addition to unique submissions, 

organizations submitted form letters. In 

total, the BLM received 213,748 form 

letter submissions from 19 form letter 

campaigns; details of the form letter 

submissions are shown in Table 4-4, 

below. 

A representative example of each form letter was entered into the comment 

analysis database and substantive comments were categorized as described for 

unique submissions. Letters that represented slight variations of the form letter 

without significant additional information were treated as form letters. When 

additional substantive comments were added to the form letter, these letters 

were entered into the comment-tracking database as a form letter with added 

text. The additional substantive comments were categorized according to issue 

topic categories, as described for unique submissions. 

Table 4-4

Form Letter Submissions

Initiating Organization Number of Submissions

American Coalition for Clean Coal Electricity 1,416

Care 2 Petitions 24,102

Center for Biological Diversity 14,104

Count on Coal MT 675

EarthJustice 36,907

Friends of the Earth and Friends of the Earth Action 9,816

Grand Junction meeting -North Fork Valley Letter 43

Keep Electricity Affordable.org 499

National Wildlife Federation 12,538

NextGen Climate Change 1,552

Physicians for Social Responsibility 1,351

The Sierra Club 98,603

The Wilderness Society 10,518

Unknown- maximize returns on Federal coal 27

Unknown- concerns with increased royalty rates 9

Unknown- reconsider the increase in royalty rates 19

Western Organization of Resource Councils 366

Western Values Project 713

WildEarth Guardians 490

Total submissions 213,748

Note: The initiating organizations were identified for all but 3 of the form letters. For letters 

where no organization was identified, a description of the main letter content is included above.

The BLM received over 213,000 

copies of form letters in 19 form 

letter campaigns
4. Summary of Comments Received 

4-8 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

Petitions were also submitted to the BLM. A petition is a letter typically 

circulated by an organization and then signed by multiple individuals. In total, the 

BLM received 91,567 signatures from five petition campaigns; details of petition 

submissions are included in Table 4-5, below. For submissions where an 

initiating organization was identified, this organization is included. In two 

instances, no organization was identified; these entries are marked as 

“unknown.”

Table 4-5

Petition Submissions

Initiating Organization Number of Signatures

Care2 Petition 2,369

The Climate Reality Project 41,987

The Sierra Club 43,559

Unknown 286

Unknown 3,366

Total submissions 91,567

4.4 SUMMARY OF COMMENTS

The BLM classified all substantive 

comments under an identified issue 

category (note some comments were 

categorized into more than one issue 

category) and also tagged comments if 

they contained references or data or a 

policy option for consideration. In total, 

459 comments contained a reference or 

data and 130 contained a policy option. 

The BLM identified 33 issue categories relevant to the reform of the Federal 

coal program. Issue categories were developed based on topics identified in the 

Notice of Intent and traditional BLM resource topics. The issue categories can 

be found in Table 4-6, below. 

Table 4-6 and Figure 4-4, Comments by Issues Category, below, show the 

number and percentage of comments received by issue category. The BLM 

categorized 3,199 comments in total. The largest number of comments (14.6 

percent) was assigned to the fair return/coal revenue category. Other significant 

categories included socioeconomics (14.0 percent), climate change (8.6 

percent), and general comments on coal (8.7 percent). Section 4.6, Comment 

Summaries, provides a detailed analysis of the comments received for each issue 

category. 

In total, 459 comments

contained a reference or data, 

130 contained a policy option,

and 3,199 related to an issue 

category.
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-9

Scoping Report 

Table 4-6

Comments by Issue Category

Issue Category Number of 

Comments

Percentage of 

Issue Comments

1. NEPA process

1.1 Scoping meeting 23 0.7

1.2 Cooperating Agency relationship 11 0.3

1.3 Range of alternatives 59 1.8

1.4 Other general 151 4.7

2. Air quality 52 1.6

3. Climate change 276 8.6

4. Carbon/greenhouse gas emissions

4.1 Social cost of carbon 125 3.9

4.2 Carbon capture 16 0.5

4.3 Life cycle emissions 27 0.8

4.4 National carbon reduction goals 109 3.4

5. Coal program topics

5.1 General comment on coal 278 8.7

5.2 Coal land use planning decisions 33 1.0

5.3 Coal leasing pause 104 3.3

5.4 Specific coal lease application 17 0.5

5.5 Coal leasing process 205 6.4

5.6 Coal bonding 75 2.3

5.7 Fair return/coal revenues 466 14.6

5.8 Coal exports 72 2.3

5.9 Coal reclamation 107 3.3

5.10 Coal mitigation 35 1.1

5.11 Coal transportation/rights-of-way 17 0.5

5.12 Methane capture 11 0.3

5.13 Surface owner rights 12 0.4

6. Environmental justice 18 0.6

7. Public health and safety 124 3.9

8. Socioeconomics 449 14.0

9. Tribal interests and concerns 18 0.6

10. State’s interests and concerns 15 0.5

11. Visual resources 2 0.1

12. Water resources 40 1.3

13. Biological resources 91 2.8

14. Other resource impacts 33 1.0

15. Renewable Energy 128 4.0

Total Comments 3,199 100

Note: Some comments were coded in more than one category.
4. Summary of Comments Received 

4-10 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

Figure 4-4. Comments by Issues Category 

4.5 ISSUES TO BE ADDRESSED PER THE NOTICE OF INTENT 

As noted in Section 2.4, the Notice of Intent identified issues likely to be 

addressed in the PEIS. A cross-walk13 of issue codes and issue topics identified in 

the Notice of Intent is included in Table 4-7. Comments related to the 

procedural requirements of the NEPA process did not correspond directly with 

the Notice of Intent issue topics and are not included here. Some comment 

issues fell within more than one Notice of Intent issue topic. 

 

13 Table showing the relationship between two other tables. 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-11

Scoping Report 

Table 4-7

Issue Cross-Walk

Notice of Intent Issue Comment Issue Category

How, when, and where to 

lease

5.2. Coal Land Use Planning Decisions, 5.4. Specific Coal Lease 

Applications, 5.5. Coal Leasing Process, 5.6. Coal Bonding, 5.9. 

Coal Reclamation, 5.13. Surface Owner Rights

Fair return 4.1. Social Cost of Carbon, 5.5. Coal Leasing Process, 5.7. Fair 

Return/Coal Revenues

Climate impacts 3. Climate Change, 4.1. Social Cost of Carbon, 4.2. Carbon 

Capture, 4.3. Life Cycle Emissions, 4.4. National Carbon 

Reduction Goals, 5.12. Methane Capture

Other impacts 2. Air Quality, 5.11. Coal Transportation, 7. Public Health and 

Safety, 9. Tribal Interests and Native American Religious 

Concerns, 10. State’s Interests and Concerns, 11. Visual 

Resources, 12. Water Resources, 13. Biological Resources, 15. 

Other Resource Impacts

Socioeconomic

Considerations

4.1. Social Cost of Carbon, 6. Environmental Justice, 8. 

Socioeconomics

Exports 5.8 Coal Exports

Energy needs 5.1. General Comments on Coal, 5.3. Coal Leasing Pause, 15. 

Renewable Energy

4.6 COMMENT SUMMARIES

The following sections include a summary of the comments received organized 

by comment type and issue category. A complete listing of comments can be 

found in Appendix D, Comments by Issue Category. 

4.6.1 Data and References 

The BLM received approximately 449 comments that included data for 

consideration or citations to references for review. In addition, many 

commenters attached reference materials, white papers, or other data to their 

submissions for review. The BLM has considered this information in the 

development of this Scoping Report and will conduct an in-depth review of this 

information as part of the development of the PEIS, as relevant. To aid review of 

this material, the agency has compiled an annotated bibliography, providing an 

overview of the recommended literature and other documents (see 

Appendix E, Annotated Bibliography). 

4.6.2 Policy Options 

Approximately 130 comments suggested options for updating or revising 

Federal coal leasing and permitting policies. Many commenters suggested 

options for ensuring a fair return to taxpayers from Federal coal leasing. 

Examples of these options included updating the process and factors for the 

BLM’s determinations of FMV, increasing or decreasing the royalty rate, 

updating the process and factors for setting bonus bid amounts, and changing 

the BLM’s leasing process to increase competition. Additional comments 

suggested options for updating the Federal coal program to help achieve US
4. Summary of Comments Received 

4-12 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

carbon emission reduction goals. Options suggested to meet this objective 

included quantifying greenhouse gas emissions and the social cost of carbon, 

limiting the amount of Federal coal leased according to a carbon budget, using 

Federal revenues to incentivize clean energy technologies, and requiring 

mitigation of climate impacts. Some commenters advocated for increasing coal 

exports, while others suggested that exporting Federal coal should not be 

allowed. 

Other commenters suggested options for improving protection and 

management of public lands in the coal program, such as updating the coal 

unsuitability criteria, increasing mitigation requirements, strengthening bonding 

requirements, and increasing reclamation requirements. Some commenters 

submitted options for facilitating the economic transition of communities 

currently dependent on Federal coal development. These options included ideas 

for allocating Federal funding to support programs like community services, 

career re-training, and miner pensions. Some commenters suggested that the 

BLM end the coal leasing program altogether, while others suggested 

streamlining the leasing program to maximize leasing. 

Table 6-1, Options Proposed for Analysis by Policy Objective, outlines the 

reform options that the BLM is proposing to carry forward for analysis in the 

PEIS and use as the basis for alternatives development. The options are 

organized by the policy objectives described in the Need for Federal Action in 

Section 6.1.1. Some options suggested by commenters are not proposed to be 

carried forward for analysis in the PEIS. Chapter 5 explains the BLM’s rationale 

for eliminating these options from further consideration. 

4.6.3 Issue 1 NEPA Process 

Scoping Process 

Commenters expressed concern over the locations of the scoping meetings. 

They stated that meetings should be held in states and communities where coal 

mining occurs. Specifically, additional meetings were requested in Wyoming and 

Montana. Some commenters also felt that meetings should be held in areas likely 

to feel the impacts of climate change. In addition, some commenters stated that 

the “first-come, first-served” system used at meetings did not allow everyone an 

opportunity to speak. 

Cooperating Agency Relationship 

Commenters stressed the importance of including local governments and other 

Department of the Interior agencies as cooperators during the NEPA process. 

Specifically, Campbell County, Wyoming, and the State of Wyoming requested 

Cooperating Agency status. 

Range of Alternatives 

Commenters suggested many different alternatives and their elements to 

consider during the PEIS process. Some suggestions included no new Federal 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-13

Scoping Report 

coal leasing, reduction in royalty rates, greenhouse gas mitigation and reduction, 

new leasing framework, a no action alternative, a transition to renewable 

energy, and consideration of the social cost of carbon in royalty rates. 

One commenter stated that the BLM should consider a true range of 

alternatives, rather than setting up alternatives at extreme ends of the spectrum. 

Another commenter stated that a no action alternative would be inconsistent 

with current climate change policy and that it should be rejected. 

NEPA Process—Other General 

Commenters expressed concern over the purpose and need for the BLM’s 

reform of the Federal coal program. Some stated that rationale for program 

review is unfounded and current regulations are adequate, and the BLM has 

denied reasons for review in the past. Other commenters stated that the PEIS is 

appropriate and that the program is due for a reform. 

Commenters noted the following specific concerns: 

 Evaluation of the coal program at a landscape level is redundant, 

because federally mined coal already includes NEPA at multiple 

stages. 

 In recently completed reviews, the Inspector General of the 

Department of the Interior and the GAO had only modest 

recommendations to improve the coal management program, and 

there were not enough to suggest a PEIS. 

 The BLM does not have the authority to reform the Federal coal 

program, because other laws and agencies have set the regulations. 

Specifically, commenters argued that the Mineral Leasing Act 

requires that coal should be mined for maximum economic 

recovery, that the BLM does not have the authority to adjust 

mineral royalty rates, and that fees or taxes that apply to the sale of 

coal into export markets violate the Export Clause of the Mineral 

Leasing Act. 

Commenters also noted a concern that interim actions undertaken by the DOI 

might prejudice the ultimate decision. Additional immediate measures for 

transparency were recommended. In addition, the commenters requested that 

the BLM pause consideration of any pending or new royalty rate reduction 

requests or approval of any coal lease or mining plan that would lead to 

underground mining activities requiring degasification systems, until completion 

of the PEIS. 

Commenters had the following suggestions when conducting the NEPA analysis: 
4. Summary of Comments Received 

4-14 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

 Ensure sufficient cumulative impacts analysis, including a discussion 

of oil and gas development and state and private coal development. 

Review recommendations for approaching substitution impact. 

 Limit the PEIS to a 3-year process to avoid delays, and ensure that 

the scoping report is released by the end of 2016. 

 Consider recently finalized regulations and decisions and their 

impacts on coal mining (e.g., Clean Water Act Rule, Clean Power 

Plant (CPP), land use plan amendments for greater-sage grouse 

protection). 

 Provide transparency throughout the NEPA process. 

 Prepare comprehensive GIS and maps of coal resources and other 

key data, and make this information available for public review. 

 Design a PEIS that could be tiered to and help facilitate a more 

streamlined leasing process and include specific guidelines on the 

NEPA process for obtaining a lease. 

 Prepare a Reasonably Foreseeable Development Scenario. 

 Quantify all coal impacts. 

 Involve the Office of Surface Mining Reclamation and Enforcement 

(OSMRE) and other relevant state and Federal agencies in the NEPA 

process. 

4.6.4 Issue 2 Air Quality 

Commenters stated concern for the impacts that coal mining, burning, and 

transport can have on air quality, including an increase of pollutants and 

particulate matter in the air. This would result in poor air quality and unsafe 

conditions, such as soot, smog, and acid rain due to decreased air quality. 

Commenters also noted that the secondary impacts of poor air quality, including 

impacts on visibility, impacts on oceans and aquatic life, and impacts on public 

health. Some commenters also noted that the combustion of coal exports in 

other countries impacts North American air quality. 

Some commenters suggested that the Clean Air Act (CAA) and other 

regulations have hurt the coal mining industry and require precisely blended coal 

to account for natural variations in different coal sources. One commenter 

stated that many mines do not meet the standards set by the Clean Air Act. 

4.6.5 Issue 3 Climate Change 

Commenters expressed concern about the contribution that coal mining and 

coal use have on climate change and stated that most coal must stay unmined if 

we are to avoid the worst effects of climate change. Commenters stated that 

burning coal extracted from public lands represents a significant contribution to 

greenhouse gas emissions and climate change. 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-15

Scoping Report 

Commenters also expressed concerns about specific direct, indirect, and 

cumulative impacts related to climate change, including the following: 

 Water supply shortages 

 More intense severe weather events 

 More frequent and intense wildfire 

 Impacts on human health 

 Impacts on other uses of public lands 

 Rising sea levels 

 Shorter season for snow sports and reduced snowpack and ice 

formation 

 Ocean acidification and impact on the fishing industry 

 Heat waves 

 Changing plant and wildlife habitat and ranges 

 Invasive species outbreaks 

 Extended ranges of disease carriers, like mosquitos and ticks 

One commenter stated that climate damages from coal are 5 to 6 times greater 

than the value of coal, and that more coal has already been leased than is 

possible to burn without exceeding carbon budgets to meet climate objectives. 

One commenter suggested modeling climate impacts by alternative and their

effect on royalty revenue, coal prices, energy markets, and energy substitution 

effects. Some commenters stated that climate change should not be considered 

during the PEIS process, due to the following reasons: 

 Human-caused climate change has not been proven and cannot be 

accurately predicted. 

 Climate change is already covered under NEPA and the existing 

leasing process. 

 Coal’s impact on climate change is offset by the protection that coal 

allows humans through affordable heating and cooling, sturdy 

buildings, and drought protection. 

Commenters suggested that the PEIS should evaluate all fossil fuels and their 

relation to climate change taking into consideration both upstream and 

downstream greenhouse gas emissions, and that mitigation strategies for climate 

change should be employed. One commenter stressed the importance of an 

alternative that balances climate considerations with future energy demands. 

Commenters stated that the idea of a perfect substitution (replacement of 

Federal coal with coal from other sources) is not supported by recent findings 

and that the BLM should not use that assumption in climate change analysis. 
4. Summary of Comments Received 

4-16 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

4.6.6 Issue 4 Carbon/Greenhouse Gas Emissions 

Issue 4.1 Social Cost of Carbon 

Commenters stated that the social cost of carbon should be evaluated when 

reforming the Federal coal program, suggesting the following: 

 The social costs of carbon should be built into coal royalties to 

reflect the true cost of climate change. 

 Social costs should be used to quantify climate impacts of 

alternatives. 

 Annual climate costs of the Federal coal program far outweigh 

benefits of fossil fuel production. 

 A large increase in rates would result in a great benefit to climate 

and more revenue. 

 The cost of coal would be much higher, if accounting for the social 

cost of carbon. 

 Renewable energy is cheaper than coal, when considering the social 

cost of carbon. 

Commenters also noted that there is a recent court decision supporting the use 

of the social cost of carbon. Commenters also provided specific direction for 

including the social cost of carbon, recommended models for social cost of 

carbon analysis, and alternative measures of quantifying carbon cost and other 

externalities. 

Other commenters stated opposition to imposing a social cost of carbon for the 

following reasons: 

 A carbon change large enough to dramatically curtail Federal coal 

production could be in violation of the dual mandate to balance 

environmental goals with Federal revenue generation. 

 The social cost of carbon estimates are unrealistically high and 

technically unsound. 

 The BLM does not have the authority to impose a social cost of 

carbon. 

 Imposing the social cost of carbon would have limited effectiveness 

due to substitution to non-Federal coals or other fossil fuels and 

due to lack of pass through to end user. 

 The social cost of carbon has not undergone notice-and-comment 

rulemaking. 

 Imposing a carbon fee would be double regulation/taxing. 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-17

Scoping Report 

 Imposing a social cost of carbon on producers would increase 

electricity prices. 

 Implementing the social cost of carbon may not be successful, due 

to lack of competition. If Federal coal auctions are not competitive, 

firms may lower bids to offset the social cost of carbon. 

Issue 4.2 Carbon Capture 

Commenters stated the following regarding carbon capture related to the PEIS: 

 Greenhouse gas emissions associated with coal use can be negated 

with flue-steam capture. 

 Money applied to renewable energy subsidies should be invested in 

developing carbon capture. 

 Storage and carbon capture technology is necessary in order to 

meet climate goals. 

Commenters also noted concerns over the lack of Federal aid in developing 

carbon capture technology. They cited specific states and coal industries that 

have examples of efficient power plants and sequestration technology. 

Issue 4.3 Life-Cycle Emissions 

Commenters stated that the PEIS should analyze greenhouse gas emissions and 

associated impacts from all stages of coal mining and usage. Specifically, 

consequential life-cycle analysis methods were recommended over attributional 

life-cycle analysis methods. Other commenters stated that the BLM’s review of 

the Federal coal program is not the appropriate time to analyze life-cycle 

emissions, since the BLM cannot determine how the coal will be used, and lifecycle analysis studies are inadequate. 

Issue 4.4 National Carbon Reduction Goals 

Commenters expressed concern regarding how the Federal coal program will 

align with the Administration’s greenhouse gas reduction goals reflected in the 

Paris Agreement and the CPP. Specifically commenters focused on whether 

continued levels of US coal production was consistent with the Paris Climate 

Agreement and the commitment to stay under 2 degrees Celsius of warming, 

and questioned whether coal exports undermine the commitment to end 

reliance on coal by 2020. 

Commenters also cited studies, suggesting that new Federal coal leasing at any 

significant level is inconsistent with climate goals. Commenters suggested 

creating a “carbon budget” to help meet emissions reduction goals and 

implementing a carbon adder for upstream emissions to help meet climate 

commitments. Commenters also stated that not combusting coal is critical to 

meeting climate goals and that the BLM should finalize the coal mine methane 

rule-making, because of the potent impact methane has on climate change. 
4. Summary of Comments Received 

4-18 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

4.6.7 Issue 5 Coal Issue Topics 

Issue 5.1 General Comment on Coal

General comments on coal fell under two main categories: commenters who 

requested a complete cessation of new leases, a reduction in coal mining, or 

increased regulation of coal mining on Federal lands and those who favored 

limited modifications to the coal program, continued coal mining, or expansion 

of coal mining on Federal lands. 

Commenters requesting a reduction in mining provided the following rationales 

and opinions: 

 The Federal coal program has not been modified in many years and 

is due for a reform. 

 There is reduced demand for coal due to market and policy 

conditions and mining on Federal lands needs to be phased out. 

 The environmental impacts of coal outweigh the beneficial uses. 

 Coal mining contributes to climate change and greenhouse gas 

emissions. 

 A sufficient amount of coal is already leased. 

Some commenters also noted the importance of analyzing the impacts from all 

stages of the coal life. One person noted that current leases should be 

rescinded. Another person stated that it is better to continue mining on current 

operations than to start new operations, because new mines and disturbance 

will have a greater impact. 

Commenters who favored maintaining or expanding Federal coal mining 

provided the following rationales and opinions: 

 Coal is a low cost energy source and is necessary to provide 

reliable and affordable electricity. 

 Investments should be made in clean coal technology over 

alternative energy sources. 

 Companies will turn to mining on private lands if Federal lands 

cannot be mined. 

 Studies prepared for Federal coal mining provides valuable 

information about other natural resources. 

 The coal industry is already over regulated. 

 Coal demand is cyclical, so recent studies of coal demand may not 

be representative. 

 The US has “cleaner” coal than other countries. 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-19

Scoping Report 

 The low cost energy derived from coal improves the quality of life 

and allows other industries to be competitive. 

Issue 5.2 Coal Land Use Planning Decisions 

Commenters stated that, when making coal land use planning decisions, the 

BLM should consider other land uses on public lands and lands with 

environmentally sensitive or special habitat value. Commenters requested that 

the BLM review and revise unsuitability criteria, implement unsuitability 

screening criteria at the land use planning level, and document the screening 

process. Specific areas suggested as unsuitable for leasing were those where the 

hydrological balance cannot be restored to pre-mining conditions and areas 

where coal development should be avoided due to high conflicts with wildlife, 

fisheries, water, air, and protected lands. 

Issue 5.3 Coal Leasing Pause 

Some commenters expressed support for the coal leasing pause, stating that it 

should be extended or made permanent and reasoned that a sufficient amount 

of coal has already been leased. Other commenters stated opposition to the 

coal leasing pause. They stated that it should be removed because it negatively 

impacts the economy, violates other laws, and is an attempt by the 

administration to stop coal mining. They said that pending leases already include 

a lengthy NEPA evaluation and should not be subject to the moratorium. 

In addition, some commenters stated that the BLM has underestimated the time 

lag that would be produced by a moratorium. They requested that there be a 

guarantee that the moratorium would not go beyond the stated 3 years. Others 

stated that the assumption that a 20-year supply of coal is already under lease, 

as noted in Order 3338, is based on faulty information. 

Issue 5.4 Specific Coal Lease Applications 

Commenters stated concern over both the environmental impacts of leasing 

and the economic impacts of delays for specific coal lease applications, including 

at the following: Alton Mine, Bull Mountain Mine, Greens Hollow Coal tract 

(SUFCO Mine), and the Williams Draw tract (Lila Canyon Mine). Commenters 

also stated that analysis for one recently leased mine, the Narley Mine No. 3 

mine, was inadequate. In addition, commenters provided input on particular coal 

mining regions. They stated that coal from the North Fork Valley produces less 

pollution and should be selectively mined and that the Powder River Basin 

should be recertified as a coal producing region. 

Issue 5.5 Coal Leasing Process 

Many commenters stated concerns for the current leasing process. Some stated 

that the leasing process takes too long and should be streamlined to remove 

redundancy and unnecessary barriers to development. Other commenters 

suggested specific changes to the leasing process in order to limit environmental 

impacts and to ensure a fair and transparent leasing process. Commenters 

suggested the following changes: 
4. Summary of Comments Received 

4-20 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

 Discontinue the lease-by-application (LBA) approach, because it 

does not encourage competitive bids. 

 Provide more public notification of pending lease applications, 

minimum bids, and other leasing decisions. 

 Examine leasing at the coal reserve level and reinstate coal 

producing regions in which regional planning takes into account 

market conditions and environmental impacts. 

 Expand coordination with adjacent Federal landowners before

leasing. 

 Increase competition among coal companies for Federal coal leases. 

 Lease only to companies that demonstrate they are resilient to 

expected market fluctuation. 

 Make companies pay upfront at the time of lease for reclamation 

and evaluate unmet reclamation obligations before making additional 

leases. 

 Incorporate elements from the Solar PEIS and Oil and Gas Master 

Leasing Plans into the coal leasing process, such as analyzing 

appropriate areas to lease on a regional scale. 

 Cap coal tonnage or British thermal units and accept bids only until 

this cap is met. 

 Focus lease offerings near existing tracts to limit additional 

disturbance. 

 Wait for adequate market demand and set minimum bid prices. 

 Consider lease prices reflecting the opportunity value involved in 

purchasing an option to mine a public resource in the future, when 

coal prices may recover from current lows. 

 Apply maximum economic recovery standards and prepare a 

reasonably foreseeable development scenario. 

Other commenters said that the current leasing system is sufficient and stated 

the following: 

 The BLM should not exclude operators with greater than 10 years 

of reserves due to the length of the leasing process and other 

permitting. 

 The BLM should retain the industry-nominated systems, as industry 

representatives are informed about future market needs. 

 Note that conducting lease sales at set times in the past (such as 

quarterly) did not attract sufficient bids. 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-21

Scoping Report 

 Consider delaying collection of bonus bids until mining begins on 

the leases and allow a royalty credit for the capital costs to establish 

a mining operation to increase competition for bids. 

 Leave the determination of where to lease to the field office at the 

local planning level. 

 The BLM should acknowledge that bidding by adjacent mine 

operators is economically logical, due to reduced capital costs and 

that it does not represent a noncompetitive process. 

 The BLM should acknowledge that it has the ability to adjust the 

lease nomination to ensure adequate competition. 

 The BLM should acknowledge that the LBA process and leases with 

one bid are fair, because the government sets a minimum price. 

Issue 5.6 Coal Bonding 

Commenters expressed concern over the amount of outstanding self-bonded 

reclamation liability and the self-bonding process in relation to Federal coal 

leasing, stating that it does not protect taxpayers and allows many companies to 

avoid reclamation. 

Other commenters stated that changes to the self-bonding and reclamation 

regulations are in conflict with Surface Mining Control and Reclamation Act 

(SMCRA), and another suggested that the BLM does not have the authority to 

interfere with the States’ ability to regulate surface coal mining and reclamation 

operations or to apply its discretionary authority over the bonding of such 

operations. In addition, one commenter stated that the leasing moratorium will 

impact the bonding of reclamation liability by reducing companies’ revenue.

Commenters recommended the following specific changes to coal bonding: 

 Eliminate self-bonding. 

 Suspend approval of self-bonding for companies filing for 

bankruptcy. 

 Charge a set amount for cost-recovery, based on the type of mine 

and application at the time of leasing. 

 Require coal companies to put down a large deposit at the time of 

leasing. 

 Impose full-cost bonding. 

 Hold companies liable for failure to meet reclamation requirements. 

 Require companies to purchase insurance to cover reclamation 

costs. 
4. Summary of Comments Received 

4-22 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

 Do not permit new leases for companies until all of their mines 

have been reclaimed. 

 Work with the OSMRE to strengthen self-bonding regulations. 

Issue 5.7 Fair Return/Coal Revenues 

Commenters expressed concern over the current royalty rates and return to 

taxpayers. Many commenters stated that royalty rates should be raised, because 

coal companies are not paying a fair return to taxpayers and exploiting 

loopholes to undervalue coal. Commenters noted that current rates have been 

in place for 30 years, and it is time for a review. Some commenters stated that 

Federal coal sales represent nearly 41 percent of the total domestic production, 

which artificially lowers market prices, further reducing the amount of royalties 

received. Commenters also supported specific changes to royalty rates, 

including the following: 

 Increase transparency and public input when determining market 

values. 

 Use royalty rates for coal that match rates for offshore oil and gas. 

 Assess royalties on the net delivery price of coal. 

 Impose a cap on transportation deductions. 

 Develop a comprehensive, coal-specific, costs test analysis tool that 

would quantify and monetize the full range of damages caused by 

coal and the true avoided cost value of renewables when used to 

replace coal. 

 Factor in life-cycle and external costs. 

 Consider using the social cost of carbon. 

 Ban companies from selling coal to subsidiaries to depress rates 

(captive transactions). 

Other commenters stated that there is no rationale to support raising royalty 

rates and that royalty rates should be decreased. Their concern over raising 

royalty rates were for the following reasons: 

 Many companies currently pay a significant share of revenues in the 

form in royalties, taxes, and fees. 

 The coal market is declining, and companies are already facing 

economic pressure. 

 There is no empirical evidence to support the notion that increasing 

Federal coal royalty rates will increase Federal coal revenues. 

 Coal companies already pay fair rates that benefit many local 

communities in a struggling economy. 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-23

Scoping Report 

 Coal exports are not a valid basis for reevaluating valuation 

regulations or royalty rates. 

 Higher rates will render many Federal coal operations uneconomic. 

 Higher rates will shift emphasis to use of private coal and thereby 

reduce royalties collected. 

 Higher royalty rates will decrease production and return. 

 Higher royalty rates will increase the costs of electricity due to 

companies transferring increased costs to consumers. 

Commenters stressed the importance of considering all components of return 

when evaluating fair return numbers. One commenter stated that wind and 

solar subsidies should be considered with determining coal rates, and another 

suggested conducting a full cost-benefit analysis. 

Other comments recommended that the BLM reinstate the Royalty Policy 

Committee and that the Department of the Interior eliminate the current FMV 

criteria and replace it with a new partnership model between government 

agencies and private industry. 

Issue 5.8 Coal Exports 

Commenters stated support for Federal coal exports for the following reasons: 

the BLM would benefit from exporting coal and allowing for a greater return, 

exports are a lucrative market, exports would help other countries meet their 

energy needs, and countries would find other coal sources if they were not 

supplied with US coal. One commenter suggested that the government should 

assist coal producers in accessing international markets. 

Other commenters stated opposition for coal exports for the following reasons: 

 Burning coal for domestic use, as opposed to exporting it for 

foreign use, is cleaner and more efficient. 

 Coal exports will discourage other countries from investing in 

renewable energy sources. 

 Exporting federally subsidized coal artificially drives down the price 

of coal in the global market. 

 The United States should not mine public lands to supply other 

countries with coal. 

 It is only the BLM’s objective to sell Federal coal to aid in meeting 

the nation’s energy needs. 

 Burning coal overseas will still impact domestic air quality and 

undermine climate policy. 
4. Summary of Comments Received 

4-24 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

Commenters suggested that impacts related to coal transportation must be 

evaluated when considering exports, additional fees should be imposed for 

Federal coal that is shipped out of the United States, and the United States 

should look at how other federally owned minerals are valued and apply that 

standard to coal. 

Commenters also stated that the PEIS must fully analyze and assess the 

reasonably foreseeable impacts of coal exports that may occur as a result of 

future coal management. 

One commenter stated that exports need to be considered in market demands, 

while others stated that exports are so low that even aggressive expansion 

would have no effect on Federal coal production. 

Issue 5.9 Coal Reclamation 

Commenters stated concern over the coal mine reclamation process, citing the 

following issues: 

 Many mines on Federal lands have still not been reclaimed. 

 Reclamation standards are elusive. 

 Mining companies get by with no reclamation, due to self-bonding. 

 It takes many years for mine reclamation to reach original flora and 

fauna conditions. 

 Reclaimed lands are often susceptible to invasive or nonnative 

species. 

Commenters also suggested the following: 

 There should be no new leasing until existing mines are reclaimed 

and comply with environmental standards. 

 A company’s history with reclamation should be considered when 

determining new leases. 

 Coal companies should be held responsible for reclamation 

responsibilities. 

 Reclamation planning should begin at the time of the lease. 

 Coal companies should be required to put up adequate funds for 

reclamation. 

 Mine reclamation should be as contemporaneous as possible. 

 Mine workers should be trained in restoring public lands. 

 Reclamation standards should be revised. 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-25

Scoping Report 

Other commenters stated that claims that mining companies do not reclaim 

lands are unfounded and that reclaimed lands are often more productive and 

can support multiple uses, such as livestock grazing and wildlife habitat. One 

commenter stated that the BLM does not have the authority to monitor 

reclamation. 

Issue 5.10 Coal Mitigation 

Commenters stated support for identifying and analyzing mitigation strategies in 

the Draft PEIS, specifically suggesting that a new mitigation protocol be 

developed, compensatory mitigation be implemented, mitigation measures be 

applied to existing leases, greenhouse gas offset acquisition be required by 

lessees, and a mitigation fund from coal lease payments be established. 

One commenter suggested that the existing climate is a finite resource, so 

mitigation measures to combat climate change are necessary under the

Presidential Memorandum Mitigating Impacts from Natural Resource 

Development. Another commenter stated support for protecting essential 

habitat areas and waterways before relying on mitigation measures. One 

commenter questioned whether any mitigation can offset environmental impacts 

from coal mining and development. 

Issue 5.11 Coal Transportation 

Commenters expressed concern for the impacts that transportation of coal can 

have on air quality, water resources, biological resources, visual resources, 

public health, noise, quality of life, and traffic in local communities. Commenters 

specifically stated concern for coal dust from trains and long traffic jams at train 

crossings. 

Commenters request that the PEIS provide a detailed analysis and assessment of 

how Federal coal is transported from mines to the source of consumption and 

provide the public with information and analysis on what the impacts of this 

transport are likely to be. 

Issue 5.12 Methane Capture 

Commenters stated that the PEIS should incorporate reduction strategies for 

mitigating methane emissions. One commenter stated that there should be a 

pause on production from mines that require a degasification system to vent 

methane, and others suggested that the BLM should move forward with the 

Mine Methane Waste Rule. A few commenters also noted that methane 

hydrates are a potential energy source. 

Issue 5.13 Surface Owner Rights 

Commenters stated that the PEIS should incorporate protections for surface 

owners, including addressing the uncertainty of future mining beneath private 

land and consideration of surface landowners in split-estate transactions. 
4. Summary of Comments Received 

4-26 Federal Coal Program Programmatic EIS January 2017 

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4.6.8 Issue 6 Environmental Justice 

Some commenters stated that low-income populations will be 

disproportionately affected by the loss of jobs and the increase in electricity 

prices as result of Federal coal reform. Others stated that low-income 

populations, the elderly, children, and communities of color would be 

disproportionately subjected to adverse environmental, health, and economic 

impacts from coal mining, downstream activities, and climate change effects. 

4.6.9 Issue 7 Public Health and Safety 

Commenters stated that coal miners suffer health impacts, including respiratory 

diseases, increased incidence of cancer, and traumatic injury resulting from 

unsafe mine conditions. In addition, commenters cited concern for the impacts 

on public health and safety for those who live or work near coal extraction 

sites, including exposures to toxic pollutants in air and water, such as selenium, 

benzene, mercury, and arsenic. 

Commenters noted that additional, more widespread impacts on human health, 

including increased risk of respiratory disease, heart disease, and neurological 

disorders, occur from coal-fired power plant emissions and from health effects 

related to warming temperatures and climate change. Some commenters also 

noted that increased health risks are present for children, pregnant women, and 

senior citizens. Commenters suggested that coal companies should be held 

accountable for external costs and poor health effects related to mining and 

stated that all steps of the coal life cycle are harmful to human health. 

4.6.10 Issue 8 Socioeconomics 

Many commenters noted the positive economic impacts that coal mining has 

had on their communities, including employment, income, and tax and royalty 

revenue. Commenters also discussed the public projects and services funded by 

coal revenues. 

Conversely, one commenter stated that coal communities are some of the 

poorest in the nation, and another suggested that Federal coal subsidies unfairly 

disadvantage coal producers and result in decreased economic contributions. 

Another commenter stated that federally leased coal mining is less labor 

intensive than private coal mining and creates fewer jobs. 

Commenters stated that Federal coal reforms, such as increased royalty rates, 

could result in potential bankruptcies for coal companies and socioeconomic 

impacts, including the following: 

 Direct loss of jobs and income in the coal mining industry 

 Loss of secondary jobs supported by the industry and employee 

spending in coal mining communities 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-27

Scoping Report 

 Increased electricity prices, due to higher costs of less reliable

alternative energy sources and the subsequent impact of less 

disposable income to spend elsewhere 

 Loss of social benefits that come with providing affordable and 

reliable power to other industries at all hours (e.g., healthcare and 

the military) 

 Jobs shifting to other countries when domestic coal is no longer 

competitive 

Some commenters also noted that declining coal production would result in 

disproportionate economic impacts on rural communities. 

Other commenters stated that climate change and environmental degradation 

resulting from coal mining affects certain industries, such as tourism and 

recreation. Others suggested that coal mining increases health care costs and 

associated decreases in workforce productivity and that traffic, noise, and 

pollution impact the quality of life for coal mining communities. Some 

commenters suggested that transitioning to renewable energy sources now 

would result in cheaper electricity rates and decreased costs from 

environmental and health impacts in the long term and would allow for 

economic diversification in coal mining communities. 

Many commenters also recommended that assistance be available to help coal 

miners transition to other jobs and ensure a just transition of coal-dependent 

communities to a renewable energy future. One commenter warned that 

impacts on small businesses must be adequately analyzed to comply with the 

Regulatory Flexibility Act and the Small Business Regulatory Enforcement 

Fairness Act. 

4.6.11 Issue 9 Tribal Interests and Native American Concerns 

Commenters expressed concern for the impacts that coal mining has on tribal 

interests and suggested the following be considered during the PEIS process: 

 Coal mining impacts on climate change and non-industrialized 

nations 

 Requirements for consulting with tribes 

 Environmental impacts on tribal lands 

 Limits on coal transportation over tribal land 

 Restrictions on mining, in view of religious or cultural sites 

 Impacts on fishing rights and tribal traditions 

Other commenters expressed concern for the impacts that changes in coal 

regulation would have on tribal funding from coal mining and stated that it 
4. Summary of Comments Received 

4-28 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

would further impede coal mining. One commenter stated that this would be an 

infringement on tribal sovereignty. 

4.6.12 Issue 10 State’s Interests and Concerns

Commenters had suggestions related to state involvement during Federal coal 

reform, including transferring public lands to the states, involving state officials in 

policy discussions, considering impacts on state resources and local 

governments, and revisiting Federal/state lease profit split agreements and 

setting “appropriate use” parameters. One commenter stated that is important 

to consider the unique situations in individual states as part of the PEIS process 

(e.g., amount of coal mined, number of jobs, revenue, etc.). 

4.6.13 Issue 11 Visual Resources 

Commenters expressed concern for the impact that coal mining has on visual 

resources and stated distaste for the scarred landscape. 

4.6.14 Issue 12 Water Resources 

Commenters stated concern for water resource impacts, including the 

following: 

 Contamination of surface and underground water sources and 

related concerns about contaminated domestic water supplies and 

impacts on wildlife 

 Depletion of groundwater sources and impacts on other land uses 

 Failure to properly reclaim the mined area, leading to failed water 

restoration and the associated water resource risks resulting from 

climate change, such as drought, flooding, and acidification 

One commenter suggested that coal mining does not have an impact on water 

quality, due to National Pollution Discharge Elimination System permitting 

procedures in place. 

4.6.15 Issue 13 Biological Resources 

Commenters stated concern for biological resource impacts, including the 

following: 

 Habitat fragmentation 

 Impacts from river sedimentation 

 Disturbance of vegetation and wildlife habitats and susceptibility of 

mined areas to invasive species 

 Dangerous metals and compounds impacts on wildlife 

 Construction and transportation impacts on wildlife 
4. Summary of Comments Received 

January 2017 Federal Coal Program Programmatic EIS 4-29

Scoping Report 

Many commenters also noted concerns with impacts on aquatic and avian 

wildlife caused by climate change, including habitat loss and ocean acidification. 

Conversely, some commenters stated that wildlife coexists with mining 

operations and often thrives on reclaimed mine lands. 

One commenter stated that the BLM is required to initiate consultation with 

the Fish and Wildlife Service and the National Marine Fisheries Service at the 

PEIS level. 

4.6.16 Issue 14 Other Resource Impacts 

Commenters stated that the analysis should be at multiple scales and should 

consider impacts on additional resources and resource uses, such as night skies, 

geological risks like subsidence, other land uses, such as agriculture, and 

wilderness characteristics. Some commenters stated that reclaimed coal mines 

have a beneficial impact on grazing, and others noted impacts on adjacent lands, 

including National Parks, such as Bryce Canyon. 

4.6.17 Issue 15 Renewable Energy 

Commenters stated support for investing in renewable energy programs over 

coal mining operations, due to the decreased environmental impact and efforts 

to mitigate climate change. They suggested implementing programs to help coal 

miners transition to renewable energy jobs. Commenters also stated that there 

is enough coal currently under lease to last through a transition to renewable 

energy. 

Other commenters expressed opposition to renewable energy, stating that 

solar and wind farms have visual impacts, kill wildlife, and still require mining, 

because they need rare earth minerals. Commenters also stated that solar and 

wind energy cannot be supported in the eastern the United States, due to lack 

of available space; also, it is not an economically feasible, reliable, or consistent 

energy source. In particular, commenters stated that government subsidies are 

required to make renewable energy competitive with fossil fuels and that these 

forms of energy result in reduced tax and royalty contributions. One 

commenter suggested embracing microgrids instead of large grid 

interconnections. 
4. Summary of Comments Received 

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CHAPTER 5 

FEDERAL COAL LEASING PROGRAM

The following chapter describes the Federal coal program and provides baseline 

information intended to provide context for the consideration of program 

reform opportunities. This chapter includes: authorities, other Federal agency 

roles and responsibilities, historical information, state of the coal industry 

information, coal leasing and production data, market projections for coal, 

greenhouse gas emissions, socioeconomic considerations, and an overview of 

the Federal coal leasing process. It is important to note that Secretarial Order 

3338 specifically stated that the Order does not apply to the coal program on 

Indian lands, as that program is distinct from the BLM's program and is subject 

to the unique trust relationship between the United States and federally 

recognized Indian tribes and government-to-government consultation 

requirements, nor does it apply to any action of the Office of Surface Mining 

Reclamation and Enforcement or the Office of Natural Resources Revenue.

5.1 AUTHORITIES

The Mineral Leasing Act of 1920, as amended (30 USC 181 et seq.), authorizes 

and governs leasing of public lands for developing deposits of coal, oil, natural 

gas, and other minerals. The Mineral Leasing Act gives the BLM responsibility for 

managing coal leasing on approximately 570 million acres of mineral estate that 

is owned by the Federal government, where coal development is permissible. 

Depending on the location, the surface estate of these lands is managed by the 

BLM, United States Forest Service, private landowners, state landowners, or 

other Federal agencies. Regulations that govern the BLM's coal leasing program 

may be found in Parts 3000 and 3400 of Title 43 of the CFR. As described 

below, other Federal and state agencies are responsible for regulating the 

environmental effects of coal mining, issuing permits to operators, collecting 

fees from the development of Federal coal, mine reclamation, and ensuring the 

health and safety of mine operations. 
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The Federal Coal Leasing Amendments Act (FCLAA) of 1976, as amended, (P.L. 

94-377; 90 Stat. 1083–1092) updated sections of the Mineral Leasing Act, 

focusing on issues related to FMV and speculation. The FCLAA repealed the 

noncompetitive preference right leasing system for coal and required all new 

leases to be sold in a competitive bidding process. The FCLAA banned the BLM 

from accepting any bid less than the estimated FMV of the lease. It tightened 

diligent development and continuous operation requirements, and made 

enforcement of these provisions nondiscretionary. The FCLAA also established 

the principle of Maximum Economic Recovery, and facilitated the consolidation 

of leases into logical mining units for maximum economic recovery. To help 

with recovery of less accessible coal, the law authorized the BLM to make 

carefully justified and controlled modifications to a company’s royalty rate or 

lease terms. 

The FLPMA (43 USC 1701 et seq.) establishes the broad framework under 

which BLM manages public lands today. FLPMA established a unified, 

comprehensive, and systematic approach to managing and preserving public 

lands in a way that protects "the quality of scientific, scenic, historical, ecological, 

environmental, air and atmospheric, water resource, and archeological values." 

It established the principles of land use planning to guide the BLM in making its 

land management decisions. This framework required Federal land managers to 

balance conflicting demands on the land: productivity, environmental values, 

recreational opportunities, and economic return. FLPMA also required that the 

BLM ensure receipt of FMV in return for private extraction of public resources, 

and tasked the agency with considering likely future land uses, environmental 

concerns, and the protection of lands with wilderness characteristics when 

making long-term management decisions. 

The SMCRA of 1977 (30 USC 1201 et seq.) is the primary Federal law that 

regulates the environmental effects of coal mining in the United States. SMCRA 

essentially created two programs: one for reclaiming pre-SMCRA abandoned 

mine lands and the other for regulating active coal mines. Title IV of SMCRA 

established the Abandoned Mine Reclamation Fund, supported by a fee on every 

ton of coal produced, to reclaim mine lands abandoned before the passage of 

SMCRA. Title V of SMCRA sets minimum performance standards for 

environmental protection and public health and safety that apply to surface coal 

mining and reclamation operations, surface effects of underground coal mining 

operations, and surface coal mining in special areas or in special circumstances 

(such as steep slope mining). A person who proposes to conduct surface coal 

mining and reclamation operations (which include surface effects of 

underground mining by definition) must apply for and receive a permit, which 

incorporate provisions of SMCRA and regulations (or the state equivalent), and 

must post performance bonds to cover the costs of reclamation. 

In general, SMCRA establishes a program of cooperative federalism that allows a 

state or tribal regulatory authority (RA) to assume primary jurisdiction 
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(primacy) over the regulation of surface coal mining and reclamation operations 

within its borders once its regulatory program has been approved by the 

Secretary of the Interior. SMCRA requires that a state or tribal program 

demonstrate that the state’s or tribe’s rules and regulations are consistent with 

regulations issued by the Secretary pursuant to SMCRA. The OSMRE is 

responsible for ensuring that SMCRA is being enforced directly in Federal 

program states and tribes and through oversight of primacy states and tribes in 

order to ensure that each state and tribal RA is enforcing its counterparts to 

the Federal regulations.

The Energy Policy Act of 2005 (PL 109–58, 119 Stat. 594-1143) included five 

sections related to the Federal coal program, which involved increasing the 

cumulative acreage allowed for coal lease modifications, establishing a new 

mechanism to extend a logical mining unit beyond 40 years, providing new 

bonding provisions for payment of the remaining balance of a deferred bonus 

bid, changing the requirements for advance royalty payments, and changing the 

timing for development plan submission. Draft BLM regulations have been 

developed to implement those sections but have not yet been finalized (78 FR 

49080-103, August 12, 2013). The BLM issued the following interim guidance 

documents to implement the Energy Policy Act of 2005: 

 Advance royalty guidance (Energy Policy Act of 2005 Section 434) is 

provided in BLM-WO-IM-2006-127.14

 Deferred bonus bids guidance (Energy Policy Act of 2005 Section 

436) is provided in BLM-WO-IM-2006-045.

15

 Guidance regarding increased acreage for lease modification (Energy 

Policy Act of 2005 Section 432), which increased the limitation for 

lease modifications from 160 acres to 960 acres, is provided in 

BLM-WO-IM-2006-004.16

5.2 OTHER FEDERAL AGENCY ROLES AND RESPONSIBILITIES

The OSMRE within the Department of the Interior is responsible for carrying 

out the requirements of SMCRA in cooperation with states and tribes. OSMRE 

ensures that coal mines are operated in a manner that protects citizens and the 

 

14BLM. 2006. Instruction Memorandum No. 2006-127 Interim Guidance for Implementation of the Energy Policy 

Act of 2005 for Federal Coal Lease Advance Royalty. March 24, 2006. Washington, DC. Available at 

https://www.blm.gov/wo/st/en/info/regulations/Instruction_Memos_and_Bulletins/national_instruction/2006/ 

im_2006-127__.print.html 

15BLM. 2005. Instruction Memorandum No. 2006-045. Interim Guidance for Implementation of The Energy Policy 

Act of 2005 [P.L.109-58] for Federal Coal Lease, Deferred Bonus Bonds. November 25 2005. Washington, DC. 

Available at https://www.blm.gov/wo/st/en/info/regulations/Instruction_Memos_and_Bulletins/national_instruction/ 

2006/im_2006-045__.print.html 

16BLM. 2005. Instruction Memorandum No. 2006-004. Interim Guidance for Implementation of the Energy Policy 

Act of 2005 [P.L. 109-58] for Federal Coal Leasing. Washington, DC. September 30, 2016. https://www.blm.gov/ 

wo/st/en/info/regulations/Instruction_Memos_and_Bulletins/national_instruction/2006/im_2006-004__.html 
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environment during mining and assures that the land is restored following 

mining. The OSMRE and the approved State RAs oversee the issuance of mine 

permits and reclamation bonding. SMCRA provides, however, that approval of 

mining plans under the Mineral Leasing Act cannot be delegated to the State 

RAs (30 USC 1273(c)). As a result, OSMRE is responsible for making a 

recommendation to the Secretary as to whether to approve, disapprove, or 

approve with conditions a mining plan or mining plan modification (30 CFR part 

746). As part of this process, OSMRE notifies the BLM of any mine permit 

application on Federal lands and provides an opportunity for the BLM’s input 

before it makes a recommendation to the Assistant Secretary of the Interior, 

Land and Minerals Management. SMCRA also requires OSMRE to work to 

mitigate the effects of past mining by pursuing reclamation of pre-SMCRA 

abandoned coal mines. However, despite remarkable achievements in 

reclamation of many abandoned coal mine sites that existed prior to the 

enactment of SMCRA, there remain more than $4 billion worth of high priority 

health and safety coal-related abandoned sites in OSMRE’s Abandoned Mine 

Land Inventory System (e-AMLIS) to be reclaimed.

The Office of Natural Resource Revenue (ONRR) within the Department of the 

Interior manages and ensures full payment of revenues owed for the 

development of the nation’s energy and natural resources on the Outer 

Continental Shelf and onshore Federal and Indian lands. The ONRR collects, 

accounts for, and verifies natural resource and energy revenues due to states, 

American Indians, and the US Treasury, which includes product valuation. The 

ONRR coordinates with other Department of the Interior entities, including the 

BLM, Bureau of Indian Affairs, and Bureau of Ocean Energy Management 

(BOEM) to support the Department’s management of oil, gas, coal, and other 

natural resources. The BLM works closely with the ONRR to ensure that the 

coal lessees are reporting coal production, sales, and inventory, which serve as 

the basis for revenue collection. The ONRR will notify the BLM if revenues are 

not being paid, and the BLM will enforce the terms and conditions of the lease, 

which may result in lease cancellation procedures. 

The Mine Safety and Health Administration (MSHA) within the Department of 

Labor is delegated the responsibility of enforcing the Federal Mine Safety and 

Health Act of 1977, as amended, (30 USC 801 et seq.) and the Mine 

Improvement and New Emergency Response Act of 2006 (P.L. 109-236; 120 

Stat. 493-505). MSHA works to prevent death, illness, and injury from mining 

and to promote safe and healthful workplaces for US miners. The agency 

develops and enforces safety and health rules for all US mines, and it provides 

technical, educational, and other types of assistance to mine operators. MSHA 

works cooperatively with industry, labor, and other Federal and state agencies 

to improve safety and health conditions for all miners in the United States. The 

BLM coordinates closely with MSHA in approval of the Resource Recovery and 

Protection Plans (R2P2) for each lease to assure the R2P2 are consistent with 

MSHA safety requirements and approved safety plans.
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Other surface management agencies participate in the Federal coal leasing 

process. As previously stated, the Mineral Leasing Act gives the BLM 

responsibility for managing coal leasing on the mineral estate that is owned by 

the Federal Government. Depending on the location, the surface estate of these 

lands could be managed by the BLM, United States Forest Service, private 

landowners, state landowners, or other Federal agencies. The BLM is required 

to receive consent or concurrence from the appropriate surface management 

agency before issuing a lease or approving an exploration plan (43 CFR, Subparts 

3425.3[b], 3482.2[a][1]). This occurs most frequently with coal reserves 

underlying National Forest System lands. In these cases, the BLM is required to 

apply any stipulations provided by the Forest Service to a lease or reject the 

lease application if the Forest Service does not give its consent. 

5.3 HISTORICAL PERSPECTIVE

Prior to passage of the Mineral Leasing Act of 1920, the Coal Lands Acts of 

1864 and 1873 provided for the public auction of lands containing coal for 

private ownership and extraction. The passage of the Mineral Leasing Act took 

place in the context of a larger national debate about public land management. 

Until that point, Federal land policy had consistently been aimed at encouraging 

economic development of natural resources. Homesteading, railroad grants, 

state land grants, forestry programs, and the patenting process all sought to 

stimulate settlement, especially in more sparsely populated western lands. By 

the early 20th century, however, an opposing philosophy of managed 

development asserted that the public deserved compensation for private profit 

made on Federal land. The Mineral Leasing Act was the first in a series of laws 

that sought to balance development with revenue collection and management of 

leasing scale and location by the Federal government. 

In 1920, the Mineral Leasing Act consolidated management of Federal coal 

resources with oil, natural gas, and certain other minerals and established a 

system of managed leasing of minerals on Federal lands. This allowed the 

government and tribes to retain control of public and tribal minerals and 

property while still encouraging development of the mineral resources they 

contained. This new program established the expectation that the public should 

be compensated for minerals mined on public land, and granted the Federal 

government control over the location and scale of that mining. It introduced the 

concepts of setting leasing levels, competitive bidding, and production royalties. 

The Mineral Leasing Act, along with amendments to the Act, forms the basis of 

the current Federal coal program. 

From the passage of the Mineral Leasing Act to the early 1960s, low demand led 

to very little Federal coal leasing. The coal that was produced was typically in 

small quantities for railroad or local use, reflecting the absence of any large-scale 

demand for western coal. The 1960s saw an uptick in Federal coal leasing as 

interest in western coal began to increase. While from 1920 to 1960 Federal 

coal leasing averaged slightly more than 4 leases per year, the 1960s averaged 31 
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leases issued per year. However, many of these leases were speculative. By 

1973, over 70 percent of the Federal coal leases ever issued had not produced 

any coal. 

Public opposition to new hydroelectric dams and nuclear power that occurred 

in the 1960s combined with the formation of the Organization of the Petroleum 

Exporting Countries (OPEC) spurred increases in oil and gas prices, which 

positioned coal as the principal power plant fuel in the United States. 

Additionally, the passage of the CAA of 1970 created new incentives for cleaner 

burning, low-sulfur western coal. Utilizing this low-sulfur coal allowed coal-fired 

power plants to attain the standards set forth in the CAA of 1970 without the 

need to install costly flue-gas desulfurization units. The shift to western coal also 

spurred the construction and operation of a number of mine mouth power 

plants (i.e., power plants built on site at the coal mine) in part due to the cost 

benefits of shipping electricity through power lines compared with shipping coal 

by rail. 

The interest in the vast reserves of western Federal coal brought new scrutiny 

to the management of the resource. As noted above, many leases in the west 

were being held in speculation and had not produced any coal. Concerns 

regarding speculation and nonproductive leases, as well as a lack of a clear 

regulatory framework, motivated the Department of the Interior to place a 

moratorium on Federal coal leasing in May 1971. Congress passed both FCLAA 

in 1976 and SMCRA in 1977. These two acts fundamentally changed the 

authorizing framework for the Federal coal program, thus requiring a 

programmatic review of the Federal coal leasing program to establish a new 

implementing regulatory structure. In 1979, the BLM published the Final 

Programmatic Environmental Statement Federal Coal Management Program.17

The final rulemaking was published on July 19, 1979 (44 Fed. Reg. 42584). The 

results of this effort provided the framework for a largely revised coal leasing 

program, including guidance for the administration of existing leases, the 

processing of Preference Right Lease Applications, and the review of Federal 

lands to determine unsuitability for certain types of mining. The new final 

regulations established standards and procedures for determining when, where, 

and how to lease Federal coal (principally through competitive sales under a 

regional leasing program) and implemented FCLAA, as well as those aspects of 

SMCRA that were under the BLM’s authority. As a result of these reforms, the 

moratorium was lifted in January of 1981. 

The Powder River Basin of Wyoming held its first regional coal lease sale under 

the new program in 1982. However, irregularities with the sale led to questions 

as to whether the BLM had realized a FMV for the leases. These concerns 

prompted Congress to create the Commission on Fair Market Value Policy for 

 

17 The 1979 programmatic review document was titled “Programmatic Environmental Statement.” The subsequent 

supplement used the more modern terminology “Programmatic Environmental Impact Statement.”
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Federal Coal Leasing (known as the Linowes Commission) chaired by economist 

David F. Linowes, who had recently chaired Congress’s Commission on the 

Fiscal Accountability of the Nation’s Resources. Congress instituted another 

leasing moratorium during the Linowes Commission’s review, which concluded 

90 days after the publication of the Commission’s report in February 1984.18

The report provided 36 recommended changes to the Federal coal leasing 

program, some of which were gradually implemented over the next several 

years, while others were not. A key recommendation of the Linowes 

Commission was that “[t]he government should establish and announce in a 

timely fashion a coal leasing schedule to promote predictability and stability of 

federal leasing actions. In doing so, the government should have the flexibility to 

change the timing of lease sales and the quantity of coal offered based on its 

assessment of market conditions.” The BLM published a Supplement to the Final 

Programmatic EIS of 1979 in October 1985 in response to these 

recommendations. 

As a result of the Commission’s report, the Department of the Interior revised 

the coal regulations to incorporate a two-tiered leasing structure. In certified 

coal producing regions where exploration and new mining was occurring, the 

BLM, through the Regional Coal Teams, would select tracts for lease sale. In 

areas outside of coal producing regions, mining companies would apply for 

specific tracts of lands to be leased (i.e., LBA), generally adjacent to their 

existing mines, also known as maintenance leasing. Notwithstanding this initial 

effort to inject competition into the lease sale process by planning in advance 

what resources were offered for sale in a region, the changes were short lived. 

Between 1987 and 1990, all six coal producing regions were “decertified” by the 

BLM, which cited considerations such as weak current and projected coal 

market conditions, the level of leasing interest in Federal coal and new mine 

development, public input, and views expressed by the Regional Coal Teams and 

the affected governors.19 This had the effect of replacing the competitive 

regional leasing process with the LBA process.20 Today, there are no regional 

 

18 The coal leasing moratorium was not lifted upon publication of the Commission’s report. Interior Secretary 

William P. Clark extended the suspension of coal leasing (with exceptions for emergency leasing and processing 

preference right lease applications, among other things) while the Interior completed its comprehensive review of 

the program. This review included proposed modifications to be made by the Department in response to the 

Linowes Commission, as well as other reports. Secretary Clark announced on August 30, 1984, that the 

Department of the Interior would prepare an EIS supplement to the 1979 Final Environmental Statement for the 

Federal Coal Management Program. The Department issued the Record of Decision for the PEIS supplement in 

January 1986, in the form of a Secretarial Issue Document. This document recommended continuation of the 

leasing program with modifications. In conjunction with those modifications, Secretary Donald Hodel lifted the 

leasing moratorium in 1987. 

19 BLM Handbook, H-3420-1, Competitive Coal Leasing, allows a lead state director to request decertification of a 

designated coal production region if this is the course recommended by the Regional Coal Team. A proposal to 

decertify a designated coal production region must be announced in the Federal Register (H-3420-1, Rel. 3-325). 

20 BLM. 1999. Public Participation in Coal Leasing. Final Rule. Federal Register Vol 52. Pp. 239-240. September 28, 

1999. Available at https://www.blm.gov/nhp/news/regulatory/3400-3420/3400-20f.pdf 
5. Federal Coal Leasing Program 

5-8 Federal Coal Program Programmatic EIS January 2017 

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lease sales, and all new leasing is done through either the LBA process or lease 

modifications. 

The Federal coal program remained relatively unchanged throughout the 1990s 

and 2000s. During that time, the Powder River Basin became the primary area 

of Federal coal leasing and production, and Federal coal commanded a much 

larger share of national coal production. The Federal coal program was last 

reviewed in 2013 by the Department of the Interior OIG and the GAO in two 

separate audits.21,22 The OIG and GAO focused their specific recommendations 

on improving existing agency procedures (such as how to conduct FMV 

appraisals), however, both reviews made clear that Federal coal lease sales 

continue to suffer from a fundamental lack of competition under the LBA 

process. While BLM LBA sales are conducted through a competitive bidding 

process, the GAO noted that in fact, of the 107 tracts leased from 1990 to 

2012, “sales for 96 (about 90 percent) involved a single bidder...which was 

generally the company that submitted the lease application. More than 90 

percent of the lease applications BLM received were for maintenance tracts 

used to extend the life of an existing mine or to expand that mine’s annual 

production.” Combined, the audits resulted in 21 recommended changes to the 

BLM’s coal program covering coal leasing and exports, inspection and 

enforcement activities, transparency of the process, and timely processing of 

royalty rate reduction applications. The BLM addressed all 21 recommendations 

in new BLM guidance (including two new manuals and handbooks23) and 

development of additional mine inspector and valuation training. 

Many stakeholders expressed concerns that BLM’s corrective actions, while 

helpful, were insufficient to rectify fundamental weaknesses in the program. To 

further explore these concerns, Secretary Jewell and the BLM hosted a series of 

listening sessions in March 2015 across the country to hear from the public 

their views on what, if any, reforms were seen as needed to the Federal coal 

program. 

In response to the broad range of issues raised over the course of the past few 

years and through the listening sessions, on January 15, 2016, Secretary Jewell 

issued Order 3338 (see Section 2.2). The Order directs the BLM to carry out 

the following: 

1. A formal, comprehensive review of the Federal coal program through a 

discretionary programmatic EIS under NEPA 

 

21 OIG. 2013. Final Evaluation Report-Coal Management Program. CR-EV-BLM-0001-2012. June 11, 2013 

Available at https://www.doioig.gov/sites/doioig.gov/files/CR-EV-BLM-0001-2012Public.pdf; 

22 GAO. 2013. Coal Leasing: BLM Could Enhance Appraisal Process, More Explicitly Consider Coal Exports, and 

Provide More Public Information. GAO-14-140. Published December 18, 2013. Publicly Released February 4, 2014. 

Available at http://www.gao.gov/products/GAO-14-140. 

23 US EIA. 2016. Changing US Energy Mix Reflects Growing Use of Natural Gas, Petroleum, and Renewables. July 

21, 2016. Available at http://www.eia.gov/todayinenergy/detail.php?id=27172 
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2. A pause on significant new coal leasing decisions on public lands while 

the programmatic review is underway, with limited, enumerated 

exemptions and exclusions 

3. A series of good government reforms to improve transparency and 

program administration, including establishing a public database to 

account for the carbon emissions from fossil fuels on public lands 

5.4 STATE OF THE COAL INDUSTRY

According to the US Energy Information Administration (EIA), US coal 

consumption declined by more than 12 percent in 2015, relative to 2014, and is 

now at its lowest level since 1982.24 New mine starts are very rare, and mining 

generally occurs in mature basins where there are active mines with known 

additional reserves. When existing mines need to secure additional coal 

reserves, it is generally to maintain current production levels necessary to fulfill 

existing contracts. The greatest percentage of Federal coal can be classified as 

“thermal” coal and is used for electrical generation. Approximately 33 percent 

of the nation’s electricity was produced from coal in 2015. Coal produced from 

Federal leases is generally sold into the domestic market, and at this time, only a 

small share of coal produced in Federal coal producing states is exported. For 

instance, coal exports from the Powder River Basin (where most Federal coal is 

located) were approximately 10 million tons (2.5 percent) out of the 404 million 

tons produced in 2015.25 The reasons for a softening market are varied, but 

include a reduction in coal-fired generating capacity is primarily due to the 

decrease in natural gas prices, the aging coal fleet, and expanded requirements 

that coal plants install pollution controls. There has been an increase in coal 

companies filing for bankruptcy, which began in 2012 and recently included 

three of the nation’s largest producing companies. 

5.4.1 Energy in the United States 

Coal has been a significant contributor to total US energy consumption since 

the industrial revolution when steam-powered ships and railroads dominated 

transportation. In the latter half of the 1800s, coal was first used to generate 

electricity.26 However, its role has decreased substantially over the past century 

(see Figure 5-1). At the beginning of the 20th century, coal provided for 75 

percent of all US energy consumption with biomass and hydroelectric 

generation also providing significant sources of energy. By the mid-20th century 

coal had dropped to 36 percent of total US energy consumption in large part 

due to the role of increased demand for petroleum and mass production of the 

automobile. As natural gas consumption quadrupled over the next half century 

 

24 US EIA. 2016. Changing US Energy Mix Reflects Growing Use of Natural Gas, Petroleum, and Renewables. July 

21, 2016. Available at http://www.eia.gov/todayinenergy/detail.php?id=27172 

25 Woods Mackenzie. 2016. Powder River Basin Coal Supply Summary. June 2016. 

26 US Department of Energy. 2013. A Brief History of Coal Use. February 12, 2013. Available at 

http://www.fe.doe.gov/education/energylessons/coal/coal_history.html 
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5-10 Federal Coal Program Programmatic EIS January 2017 

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and nuclear energy was developed, coal’s share of total energy consumption 

decreased to 23 percent of total energy consumption by 2000.27 

Since the turn of the century, energy consumption from natural gas has 

increased by nearly another 20 percent in large part due to advances in 

hydraulic fracturing. Renewable energy, such as wind and solar, have also 

become more cost competitive and widely available over the past 5 years. 

Energy demand growth has also slowed relative to historical averages due to 

some shifting from a manufacturing-based economy to a services-based 

economy and demand side energy efficiency breakthroughs. By 2015, coal 

constituted just 16 percent of total energy consumption in the United States. 

Early 2016 data suggest that its share will be even smaller as coal production 

and consumption reached multi-decade lows throughout the first three quarters 

of the year.28

Figure 5-1. US Energy Consumption by Fuel Type 

Source: EIA 2016 29

5.4.2 Major Coal Basins and Characteristics 

Major coal fields of the United States are shown in Figure 5-2. For the 

purposes of this overview in the scoping report, coal mining in the United States 

is divided into three primary regions: Appalachian, Interior, and Western.30 In 

2015, 42 percent of all coal produced in the United States came from Federal 

lands. The vast majority of coal mined on Federal lands (more than 99 percent) 

 

27 US EIA. 2016. October 2016 Monthly Energy Review. Table 1.3. Primary Energy Consumption by Source. 

Release date October 27, 2016. Available at http://www.eia.gov/totalenergy/data/monthly/#summary 

28 Ibid. 

29 US EIA. 2016. October 2016 Monthly Energy Review. Table 1.3. Primary Energy Consumption by Source. 

Release date October 27, 2016. Available at http://www.eia.gov/totalenergy/data/monthly/#summary 

30 The regional breakdown in the PEIS may differ from the overview in the scoping report. 
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Figure 5-2. Coal Fields of the Lower 48 States 

is located in the western region. Of the 306 active Federal leases in 2015, all but 

six of those leases were located in the western region.31 More narrowly, nearly 

90 percent of the coal mined on Federal lands occurs in the Powder River Basin 

located in Wyoming and Montana. Any changes to the Federal coal program will 

have a more direct impact in the western region and Powder River Basin due to 

this heavy concentration of leases and production from the Federal estate. 

As described below, coal has different characteristics in energy content and 

environmental properties that vary both within and between basins. The 

variation in the characteristics of coal typical to each basin can be significant, 

and, therefore, coals are not perfect substitutes for each other. For example, 

some western coals have less energy content than some eastern counterparts. 

Therefore, it takes more tons of these western subbituminous coals as 

compared with eastern bituminous coals to generate a given amount of 

electricity. Moreover, some power plants are designed to best accommodate 

certain ranks of coal. Coal switching is possible at most plants, but they may 

 

31 BLM. 2016. Total Federal Coal Leases in Effect, Total Acres Under Lease, and Lease Sales by Fiscal Year Since 

1990. July 7, 2016. Available at http://www.blm.gov/wo/st/en/prog/energy/coal_and_nonenergy/coal_lease_table.html 
5. Federal Coal Leasing Program 

5-12 Federal Coal Program Programmatic EIS January 2017 

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need modifications (such as increased material handling capacity) to 

accommodate a different coal rank. 

Production from the western coal region is largely comprised of the Powder 

River Basin subbituminous coal and other western bituminous coals. Among 

coal nationwide, the Powder River Basin is the single largest producing basin. In 

2015, approximately 44 percent of United States coal production came from the 

Powder River Basin.32 It is generally the lowest cost coal to produce due to 

thick coal seams reaching up to 400 feet and the proximity of the coal seams to 

the earth’s surface, which allows surface mining generally. The subbituminous 

coal has lower heat content generally ranging from 8,200 to 8,900 Btu (British 

thermal units)/lb and lower sulfur content.33 Due to both its low-heating value 

per ton and its distance from the eastern United States, where many coal-fired 

power plants are located, transportation costs become more significant for this 

basin. 

Other Federal coal production occurs in the western bituminous region 

comprised of mines in Colorado, Utah, Arizona, southwestern Wyoming, and 

New Mexico. These western bituminous coals generally have higher mining 

costs due to thinner seams generally in the 5-15 feet range, though they tend to 

have higher heat content on average than the Powder River Basin coal. Outside 

of the Powder River Basin states of Wyoming and Montana, Colorado and Utah 

are the next highest producing coal states on Federal lands. They are generally 

considered to be high-quality coals, having high energy value and low sulfur 

content (averaging around 11,000 Btu/lb), and many have a 1.2 pound or less of 

sulfur dioxide content (SO2/mmBtu). Like the Powder River Basin, the western 

bituminous region is mainly utilized as thermal coal as well. However, there is 

one mine that produces a significant amount of metallurgical coal. Metallurgical 

coal is generally higher in carbon content and calorific value and is used in the 

production of steel rather than electricity generation purposes. 

The Appalachian region is generally characterized as having three basins: the 

southern Appalachian, central Appalachian, and northern Appalachian coal 

basins. Coal produced in these basins generally have higher mining costs than 

the rest of the country as the coal seams are, on average, thinner and deeper 

relative to other regions. This results in high strip ratios for surface mines (the 

amount of material/earth that must be removed in order to remove a unit of 

coal), which drives up capital and operating cost, or underground mining 

operations which also drive up costs. The region is predominantly bituminous 

coal with high energy and low sulfur content. Higher energy content allows 

power plants to consume less coal to extract a given amount of energy. It also 

 

32 US EIA. 2016. Coal Production and Number of Mines by State and Mine Type, 2015 and 2014. Annual Coal 

Report. November 3, 2016. Available at https://www.eia.gov/coal/data.php#production 

33 A small amount of bituminous coal occurs within the Powder River Basin in the Bull Mountain coalfield. See 

Woods Mackenzie. 2016. Powder River Basin Coal Supply Summary. June 2016. 
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has the advantage of being located in the east, where the majority of electricity 

demand and coal generation occurs, making transportation from mine to power 

plant relatively less expensive. Nevertheless, the Appalachian region is generally 

characterized as the highest cost coal of the major regions with the southern 

basin being the highest, followed by central and northern Appalachian basin 

coals. 

The Interior region is largely comprised of the Illinois Basin, Gulf Lignite, and 

Western Region (Interior) coals. The Illinois Basin is the largest producing basin 

in this region and is comprised of bituminous coal with slightly less heat content 

than Appalachian coals on average. The coal seams are most often in the 1- to 

10-foot thickness range and are generally located at depths less than 1,000 feet.

Coal mining costs are lower in this region relative to the Appalachian due to 

more favorable seam thickness, mining conditions, and advances in long-wall 

mining technology. The coal mines also have the advantage of being at the 

center of the coal transportation network with all four major rail lines having a 

presence in the area, as well as the Ohio and Mississippi River barge traffic. Gulf 

lignite coal generally has much lower heat content and is, therefore, usually only 

transported short distances or used at mine mouth power plants. 

The Western Region of the Interior is small in terms of production capacity and 

coal reserves. It is mainly comprised of Kansas and Oklahoma. These are 

bituminous coals that have high heat content and high sulfur content with a 

relatively high extraction cost. Oklahoma has some coal mines located on 

Federal leases that account for approximately 0.1 percent of Federal coal 

production. 

5.4.3 Maintenance Leasing 

Since the last remaining certified coal producing region was decertified in 1990, 

all Federal coal leasing has been made up of maintenance leases issued through 

the LBA process where tracts are nominated by an applicant (see Section 5.3). 

The areas where the BLM currently manages leases support a mature industry 

(i.e., existing mines that are well-established with all necessary infrastructure, 

equipment, rail facilities, etc.) and where opening new mines has proved to be 

cost prohibitive. This has led to the majority of existing lease sales only receiving 

one bid, typically from the operator of a mine adjacent to the new lease. While 

the Mineral Leasing Act, as amended, requires competitive leasing, the nature of 

the current coal industry is not generally conducive to multiple bidders bidding 

against each other for the same tract. The BLM, however, takes a number of 

steps in the LBA process to create as competitive an environment as possible. 

In those unique areas where a lessee for an existing mine applies for a lease and 

other mines are nearby or adjacent, the BLM routinely reconfigures the 

proposed lease tract to try to make the tract attractive as a potential 

maintenance lease for those other nearby or adjacent mines, in addition to the 

applicant. However, the majority of coal mines do not adjoin or abut another 
5. Federal Coal Leasing Program 

5-14 Federal Coal Program Programmatic EIS January 2017 

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coal mine, and even if the mines adjoin or abut, the prospective lease might not 

be reconfigured for increased competition due to local physical limitations in 

geology and ownership. 

The BLM recognizes that to remain truly competitive in a one-bidder 

environment, the pre-sale estimate of the tract’s FMV must not only be factually 

supported and defensible, but also kept confidential. For a bidder to successfully 

win a Federal coal lease sale, the bid must meet or exceed the BLM’s pre-sale 

estimated FMV. The BLM follows established appraisal methods in estimating the 

value, and the Office of Valuation Services (OVS), Division of Mineral Evaluation 

(DME) reviews each evaluation to assure it follows established procedures, is 

rational, and is supported by facts. 

The BLM’s pre-sale estimated FMV functions similarly to a “reserve value” in an 

auction. The result is that even if a sale receives only one bid, the bidder is 

“playing against the house” with the BLM’s confidential pre-sale FMV estimate 

representing the lowest possible bid that can be accepted. After the coal lease 

sale, the BLM reviews the bids received and if none meets or exceeds the presale estimated FMV (as reviewed by OVS), the BLM will reject all bids and may, 

at its discretion, re-offer a lease sale. Therefore, the lease applicant is cognizant 

of the real possibility that the years of planning and NEPA review and associated 

costs may result in not being awarded the lease if they do not provide a 

sufficient bid. 

As seen in Figure 5-3 below, over the period from 1990 to 2015, the BLM has 

generally leased Federal coal at approximately the same rate it has been mined. 

This trend supports the goal of the FCLAA to restrict speculation in Federal 

coal reserves. Leasing Federal coal at a rate that exceeds the rate at which it has 

been mined would be an indicator of increased speculation. Since 2012, the 

amount of Federal coal leased has been significantly less than the amount of 

Federal coal mined. This drop in leasing levels is reflective of the decline in the 

US and global coal market (see Section 5.4.5).

5.4.4 Reserves 

The United States leads the world in demonstrated reserve base for coal. As of 

2016, the EIA estimated the United States had 477 billion tons of a 

demonstrated reserve base with approximately 255 billion tons being identified 

as recoverable.34 Recoverable reserves at currently producing mines are 

approximately 18.3 billion tons. 

Averaged across all Federal leases, at the end of 2015, there were 

approximately 20 years of production of Federal coal reserves under lease, 

assuming continued production at recent levels (approximately 375,000,000 

 

34 US EIA. 2016. US Coal Reserves. November 4, 2016. Available at http://www.eia.gov/coal/reserves/ 
5. Federal Coal Leasing Program 

January 2017 Federal Coal Program Programmatic EIS 5-15

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Figure 5-3. Cumulative Tons of Federal Coal Leased Versus Mined 

Source: BLM 201635

tons/year in 2015).36 It is important to put this number into context, however, 

since it represents an average. 

Mines under existing lease in the Powder River Basin, which accounts for nearly 

90 percent of the total annual Federal coal production, cumulatively hold 

approximately 25 years of Federal reserves, assuming current production 

levels.37,38,39,40 But for states and especially for individual mines, both within and 

outside of the Powder River Basin, there is quite a lot of variation in the years 

of remaining Federal reserves. 

For instance, since Kentucky has a relatively small amount of leased Federal 

reserves (approximately 4.8 million tons) and low annual Federal production 

 

35 BLM. 2016. Total Federal Coal Leases in Effect, Total Acres Under Lease, and Lease Sales by Fiscal Year Since 

1990. July 7, 2016. Available at https://www.blm.gov/wo/st/en/prog/energy/coal_and_non-energy/ 

coal_lease_table.html 

36 Office of Natural Resource Revenue. 2016. Production Data. Available at https://www.onrr.gov/About/ 

production-data.htm; 

37 Ibid. 

38 BLM. 2016. Powder River Basin Coal. May 20, 2016. Available at 

https://www.blm.gov/wy/st/en/programs/energy/Coal_Resources/PRB_Coal/deq_aqd.html, 

39 BLM. 2016. Powder River Basin Coal Production. May 6, 2016. Available at 

https://www.blm.gov/wy/st/en/programs/energy/Coal_Resources/PRB_Coal/production.html, 

40 BLM. 2014. Powder River Basin Coal Review. August 12, 2014. Available at 

https://www.blm.gov/wy/st/en/programs/energy/Coal_Resources/PRB_Coal/prbdocs.html 
5. Federal Coal Leasing Program 

5-16 Federal Coal Program Programmatic EIS January 2017 

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(approximately 29,000 tons in 2016), the state has nearly 160 years of production 

remaining in Federal coal leases, assuming current production levels. Utah, on the 

other hand, has approximately 96 million tons of Federal reserves leased with an 

annual Federal production of about 12 million tons in 2016. This amounts to 

approximately 8 years of remaining Federal reserves, assuming current production 

levels.41

The BLM estimates that, as of September 2016, there are approximately 7.4 

billion short tons of coal reserves available under existing leases (see Table 

5-1).42

Table 5-1 

Coal Reserves on Federal Lands 

Estimated Recoverable Coal Reserves on 

Federal Lands (End of FY 2016)

Quantity (1000 tons)

Powder River Basin 6,393,976

Colorado 422,678

Utah 96,255

All Other 487,638

Total 7,400,547

Source: Department of Interior 201643 

5.4.5 Production 

The BLM currently administers 306 coal leases encompassing over 462,000 acres 

in 10 states, with an estimated 7.4 billion tons of recoverable coal. Between 80 

and 90 percent of coal produced in the United States is used for domestic 

electricity generation, with the remainder primarily being exported and used for 

industrial purposes.44,45,46 In 2015, US coal production levels experienced one of 

its steepest declines since recordkeeping began. Production levels decreased from 

over 1 billion tons in 2014 to just under 0.9 billion tons in 2015.47

 

41 BLM. 2016. Total Federal Coal Leases in Effect, Total Acres Under Lease, and Lease Sales by Fiscal Year Since 

1990. July 7, 2016. Available at https://www.blm.gov/wo/st/en/prog/energy/coal_and_non-energy/ 

coal_lease_table.html 

42 US Department of Interior. 2016. Agency Financial Report Fiscal Year 2016. Available at 

https://www.doi.gov/sites/doi.gov/files/uploads/doi_fy_2016_afr.pdf 

43 Ibid. 

44 US EIA. 2013. Monthly Generation Data by State, Producer Sector and Energy Source; Months through 

December 2013. Available at http://www.eia.gov/electricity/monthly/

45 US EIA. 2013. Electric Power Monthly, September 2013 publication date, data for July 2013. Tables 1.6.A, 1.7.A, 

and 5.6.A. Available at https://www.eia.gov/electricity/monthly/ 

46 In 2015, domestic coal purchases per EIA Form 923 equaled about 85 percent of coal production (MSHA, Form 

OSM-1). 

47 US EIA. 2015. Annual Coal Report. Coal Production and Number of Mines by State and Mine Type, 2015 and 

2014. Available at https://www.eia.gov/coal/data.php#production 
5. Federal Coal Leasing Program 

January 2017 Federal Coal Program Programmatic EIS 5-17

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Table 5-2 includes Federal coal production data provided by the ONRR for the 

years 2006, 2010, and 2015, which show a decline of approximately 81 million 

tons between 2010 and 2015. Coal exports are described in Sections 5.4.6 

and 5.5.3). 

Table 5-2

Federal Coal Production (tons)

State 2006 2010 2015

Colorado 20,811,927 16,137,065 6,591,181 

Montana 18,072,165 17,741,873 14,477,637 

North Dakota 3,196,317 338,405* 5,261,915 

Oklahoma 725,099 516,450 498,360 

Utah 10,097,980 6,219,884 5,469,603 

WY 369,856,067 397,535,690 313,790,093 

Other* 22,435,709 18,396,804 29,472,084 

Grand Total 445,195,265 456,886,171 375,560,873 

Source. United States Extractive Industries Transparency Initiative (USEITI). 201548

*"Other" reflects coal produced on Federal leases, but state and county information is withheld 

in order to not reveal proprietary data. For example, North Dakota production from Mercer 

County is withheld in 2010 due to proprietary data concerns, and instead placed in the "other" 

category.

According to the most recent EIA Short-Term Outlook, 2016 coal production is 

expected to decrease by 138 million tons (15 percent), which would be the 

largest annual decline based on data going back to 1949.49 These reductions 

have been felt most sharply in the Appalachian basin, particularly Central 

Appalachian coal, but are also observed in other basins with significant declines 

in the Powder River Basin production. These reduced production levels are 

driven by a variety of factors, including low natural gas prices, which drives 

some displacement of coal-fired electric generation by natural gas-fired 

generation.50 In addition to low natural gas prices, reduced electricity demand 

growth, pollution control requirements, and a number of other reasons are 

cited by the EIA and industry for recent coal plant retirements that totaled 41

gigawatts (GW) between 2010 and 2015.51,52 The coal plants anticipated to 

retire between 2015 and 2022 accounted for 30 GW and 56 million tons of 

2014 coal deliveries. From the Powder River Basin alone, over 32 million tons 

of 2014 Powder River Basin deliveries (9 percent) were to plants expected to 

 

48 United States Extractive Industries Transparency Initiative (USEITI). 2015. Federal Production by Location. 

Available at https://useiti.doi.gov/downloads/federal-production/ 

49 US EIA. 2016. Short-Term Outlook. December 6, 2016. Available at https://www.eia.gov/forecasts/steo/report/ 

coal.cfm 

50 Ibid. 

51 See for example, US EIA. 2014. Planned coal-fired power plant retirements continue to increase. March 30, 

2014. Available at http://www.eia.gov/todayinenergy/detail.php?id=15491 

52 US EIA. 2015 Form 860. Schedule 3 “Generator Data (Retired and Canceled Units) 
5. Federal Coal Leasing Program 

5-18 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

retire by 2022. These drivers, along with other market and regulator drivers, 

are discussed in more detail below. 

Coal prices have fallen in recent years, in large part due to shrinking demand. As 

annual coal production in 2016 is expected to be more than 24 percent lower 

than 2014 levels, producers have focused on minimizing coal production costs 

and closing higher cost mines over the past several years.53 Lower petroleum 

prices have also helped reduce mining cost. The nationwide average delivered 

coal price was $2.38/mmBtu in 2012, but dropped to $2.14/mmBtu by 2016.54 

5.4.6 Main Drivers of Coal Demand 

The demand for US coal is driven by a variety of market and regulatory factors. 

Electricity demand growth, installed coal-fired generating capacity, the relative 

prices of alternative fuel sources, coal demand from the domestic metallurgical 

and industrial markets, net US exports of coal, and existing and proposed 

environmental rules all affect the future supply and demand for US coals, which 

in turn affect coal pricing. The price of US coals drives domestic coal 

production. Several of the market and regulatory drivers impacting coal-fired 

electricity production and, consequently, demand for US coal production are 

highlighted below. 

Market Drivers 

Natural Gas Price 

The availability and the price of natural gas is one of the single biggest drivers of 

US coal demand. As noted above, the bulk of coal demand in the United States 

stems from electricity generation. As a fuel for electricity generation, coal 

primarily competes with natural gas generation, as both are dispatchable 

resources that can be ramped up or down in response to market dynamics. 

Together, the two fuel sources account for approximately two-thirds of the 

electricity generated in the United States. 

The breakthroughs in the cost and performance of hydraulic fracturing 

technology in the late 2000s increased the supply of domestic natural gas for 

electricity generation while lowering the cost. The Henry Hub natural gas spot 

price dropped significantly following this technology maturation. Prices were 

near $13.00/mmBtu in June of 2008, but had dropped to less than $3/mmBtu in 

June of 2015.55 Natural gas gross withdrawals rose by more than 25 percent 

over this time frame.56 

 

53 US EIA. 2016. Short-Term Energy Outlook. US Coal Production Figure. December 2016. Available at 

http://www.eia.gov/forecasts/steo/data.cfm?type=figures 

54 US EIA. 2016. Short-term Energy Outlook. December 6, 2016. Available at http://www.eia.gov/beta/steo/#?v=8 

55 US EIA. 2016. Henry Hub Natural Gas Spot Price. Available at https://www.eia.gov/dnav/ng/hist/rngwhhdd.htm 

56 US EIA. 2016. Natural Gas Gross Withdraws and Production. Available at https://www.eia.gov/dnav/ng/ 

ng_prod_sum_a_EPG0_FGW_mmcf_a.htm 
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The lower natural gas price enabled natural gas-fired generation to become 

more competitive with coal-fired generation. In 2005, coal-fired generation 

accounted for approximately 50 percent of the domestic electricity generation, 

and natural gas generation was less than 20 percent. In 2015, with the increased 

supply and reduced price of natural gas, each fuel constituted approximately 

one-third of US electricity generation.57 The reduction in natural gas price also 

spurred a significant build out in new natural gas-fired combined-cycle power 

plants. Since the beginning of 2012, 24 GW of new natural gas-fired combinedcycle power plants have been built while less than 5.9 GW of coal-fired power 

plants have been added to the grid during the same period.58 New natural gas 

combined-cycle generation units have seen significant decreases in the expected 

levelized cost of electricity (LCOE). EIA’s Annual Energy Outlook projections 

for the technology LCOE dropped to below $50/MWh in some regions while 

the projected LCOE for new conventional coal remains near $100/MWh. The 

combined drop in fuel cost and generating technology cost for natural-gas 

generation makes it difficult for new coal generation to compete.59,60

Renewable Energy 

Wind and solar generation have also grown significantly in recent years and have 

provided another source of competition for fossil-fuels in electricity generation. 

These technologies have low variable operating costs and will, therefore, once 

built, generally be deployed before any fossil-fuel source. The combined total 

generation from these two sources in 2005 provided less than 1 percent of the 

country’s electricity generation, but represented more than 5 percent by 2015.61

The growth is driven by improvements in performance and reductions in the 

cost of the renewable energy technology. Policy measures, such as renewable 

energy tax credits and state renewable energy portfolio standards, create an 

additional push for the expansion of renewable energy generation. The 2016 

 

57 US EIA. 2016. Net Generation for All Sectors, Annual. Electricity Data Browser. Available at 

http://www.eia.gov/electricity/data/browser/#/topic/0?agg=2,0,1&fuel=vtvv&geo=g&sec=g&linechart=ELEC.GEN.AL

L-US-99.A~ELEC.GEN.COW-US-99.A~ELEC.GEN.NG-US-99.A~ELEC.GEN.NUC-US-99.A~ELEC.GEN.HYC-US99.A~ELEC.GEN.WND-US-99.A~ELEC.GEN.TSN-US-99.A&columnchart=ELEC.GEN.ALL-US99.A~ELEC.GEN.COW-US-99.A~ELEC.GEN.NG-US-99.A~ELEC.GEN.NUC-US-99.A~ELEC.GEN.HYC-US99.A~ELEC.GEN.WND-US-99.A&map=ELEC.GEN.ALL-US99.A&freq=A&ctype=linechart<ype=pin&rtype=s&maptype=0&rse=0&pin= 

58 US EIA. 2015. Form EIA 860 Data – Schedule 3, “Generator Data.” Available at 

http://www.eia.gov/electricity/data/eia860/ 

59 The White House. 2016. US Mid-Century Strategy for Deep Decarbonization. November 2016. p.26. Available 

at https://www.whitehouse.gov/sites/default/files/docs/mid_century_strategy_report-final.pdf. 

60 EIA. 2016. Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy 

Outlook 2016. Available at http://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf 

61 US EIA. 2016. Net Generation for All Sectors, Annual. Electricity Data Browser. Available at 

http://www.eia.gov/electricity/data/browser/#/topic/0?agg=2,0,1&fuel=vtvv&geo=g&sec=g&linechart=ELEC.GEN.AL

L-US-99.A~ELEC.GEN.COW-US-99.A~ELEC.GEN.NG-US-99.A~ELEC.GEN.NUC-US-99.A~ELEC.GEN.HYC-US99.A~ELEC.GEN.WND-US-99.A~ELEC.GEN.TSN-US-99.A&columnchart=ELEC.GEN.ALL-US99.A~ELEC.GEN.COW-US-99.A~ELEC.GEN.NG-US-99.A~ELEC.GEN.NUC-US-99.A~ELEC.GEN.HYC-US99.A~ELEC.GEN.WND-US-99.A&map=ELEC.GEN.ALL-US99.A&freq=A&ctype=linechart<ype=pin&rtype=s&maptype=0&rse=0&pin= 
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5-20 Federal Coal Program Programmatic EIS January 2017 

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Annual Energy Outlook reference case anticipates that renewable energy 

generation will continue to grow by 3.6 percent per year on average between 

2015 and 2040.62 This growth in renewable energy generation is expected to 

add to the downward pressure on coal demand. Both wind and solar generation 

have seen precipitous drops in projected LCOE for new generation, both 

dropping to averages well below $100/MWh and, therefore, less than new coal, 

in the latest Annual Energy Outlook reference case.63

Electricity Demand 

Electricity demand has leveled off in recent years in the wake of the 2009 

recession due to both slower economic growth and advancements in demandside energy efficiency. Demand growth has slowed every decade since the 1950s 

when it was above 10 percent per year, but it has reached new lows since the 

2009 recession with some years even experiencing negative demand growth.64

The 2016 Annual Energy Outlook reference case anticipates average growth of 

0.9 percent from 2015 to 2040.65 As the largest source for coal demand, this 

slow rate of electricity demand growth limits the opportunity for increased coal 

production. 

Exports 

The high price and high demand for coal in Asian markets at the beginning of the 

decade has rapidly subsided. The Newcastle, Australia benchmark thermal coal 

price was approximately $145/ton in 2011, but experienced continued and 

steady decline down to $53/ton in June of 2016.66 Slow global economic growth, 

decoupling of electricity demand with China’s gross domestic product, 

protectionist policies regarding China’s domestic coal industry, aggressive air 

pollution mitigation policies in China’s 13th Five-Year Plan that involve 

promoting non-coal alternatives, and a cancellation of most of the proposed 

Northwest coal export terminals have combined to significantly lower the 

expected levels of US coal exports.67 

Current total US coal export capacity is 234 million tons per year nationwide 

with 180 million tons being located on the East or Gulf Coast. Most US coal 

 

62 US EIA. 2016. Annual Energy Outlook. Electricity Supply, Disposition, Prices, and Emissions. Available at 

http://www.eia.gov/outlooks/aeo/data/browser/#/?id=8-AEO2016&cases=ref2016&sourcekey=0 

63 The White House. 2016. US Mid-Century Strategy for Deep Decarbonization. November 2016. p.26. Available 

at https://www.whitehouse.gov/sites/default/files/docs/mid_century_strategy_report-final.pdf 

64 US EIA. 2016. Annual Energy Outlook 2016 with projections to 2040. MT-15. August 2016. Available at 

http://www.eia.gov/forecasts/aeo/pdf/0383(2016).pdf 

65 Ibid. 

66 Williams-Derry, C. 2016. The Rise and Fall of the Asian Coal Bubble. Sightline Institute. Available at 

http://web.law.columbia.edu/sites/default/files/microsites/climatechange/williams_derry_the_rise_and_fall_of_the_asian_coal_bubble.pdf 

williams_derry_the_rise_and_fall_of_the_asian_coal_bubble.pdf 

67 Climate Home. 2016. China’s Five Year Plan to Radically Tighten Air Pollution Targets. November 3, 2016. 

Available at http://www.climatechangenews.com/2016/03/11/chinas-five-year-plan-to-radically-tighten-air-pollutiontargets/ 
5. Federal Coal Leasing Program 

January 2017 Federal Coal Program Programmatic EIS 5-21

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exports have been non-Federal coals and non-western coals and only use a 

fraction of this export capacity.68 In 2015, coal export levels were 74 million 

tons.69 Moreover, most of the coal exported is metallurgical coal and is 

exported from terminals in the eastern United States or the Gulf Coast.70 

Significant ramp-up in coal exports would require increased export 

infrastructure. Of the six large coal export terminals proposed since 2010 when 

Asian coal prices were enticing supplier interest, not one has been built or 

permitted. Moreover, support and permits for all but one of the projects have 

been withdrawn as international demand has weakened and resistance from 

local communities has increased. The one remaining project, Millennium Bulk 

Longview Terminal, is down to just one backer after Arch Coal sold its position 

in the project in 2016.71 Moody’s financial services notes that export potential 

will remain capped by port capacity limitations.72

Rail Availability 

Rail shipments account for 67 percent of the coal shipped in the United States 

to power plants.73 Western coal mines are primarily served by the Union 

Pacific and BNSF carriers, while Norfolk Southern and CSX are the dominant 

carriers in the eastern United States. In 2015, coal shipments accounted for 37 

percent of the freight shipments in the rail industry and about 17 percent of the 

rail industry revenues.74 With the fast growth of oil production in the Bakken 

Shale region, competition for rail space between coal and oil had sharpened in 

recent years and made it more difficult at times for coal companies to connect 

with utility consumers. Some power customers are beginning to hedge their 

coal deliveries by railroads with barge and truck delivery capability. However, in 

the arid west where most Federal coal is found, transportation distance from 

the mine is generally too great for truck transportation to be competitive with 

railways, and waterways are too limited in their occurrence and flowrates for 

 

68 Institute for Energy Economics and Financial Analysis. 2014. No Need for New US Coal Ports: Data Shows 

Oversupply in Capacity. November 19, 2014. Available at http://www.ieefa.org/wp-content/uploads/2014/11/ 

Sanzillo-port-capacity.pdf 

69 US EIA. 2016. Today in Energy. US coal exports declined 23% in 2015, as coal imports remained steady. March 

7, 2016. Available at http://www.eia.gov/todayinenergy/detail.php?id=25252 

70 US EIA. Coal Data Browser. Export quantity to total world of All coal 2015. Available at 

http://www.eia.gov/beta/coal/data/browser/#/topic/41?agg=2,1,0&rank=ok&linechart=COAL.EXPORT_QTY.TOTTOT-TOT.A&columnchart=COAL.EXPORT_QTY.TOT-TOT-TOT.A&map=COAL.EXPORT_QTY.TOT-TOTTOT.A&freq=A&start=2001&end=2015&ctype=map<ype=pin&rtype=s&pin=&rse=0&maptype=0 

71 Sightline Institute. 2016. Arch Coal Backs Out of Longview Export Terminal. May 27, 2016. Available at 

http://www.sightline.org/2016/05/27/arch-coal-backs-out-of-longview-export-terminal/ 

72 Zubets-Anderson, A. . 2016. “Bankruptcy and Financing Rating Agency’s Perspective.” Moody’ Investor Service. 

Presented at the US Coal in the 21st Century: Markets, Bankruptcy, Finance and Law conference. Columbia 

Center on Global Energy Policy and the Sabin Center for Climate Change Law. September 2016. Summary 

Available at http://web.law.columbia.edu/sites/default/files/microsites/climate-change/panel_summaries_-

_us_coal_in_the_21st_century.pdf 

73 US EIA. 2014. Today in Energy. Railroad deliveries continue to provide the majority of coal shipments to the 

power sector. June 11, 2014. Available at http://www.eia.gov/todayinenergy/detail.cfm?id=16651 

74 Association of American Railroad. 2016. Railroads and Coal. July 2016. Available at 

https://www.aar.org/BackgroundPapers/Railroads%20and%20Coal.pdf 
5. Federal Coal Leasing Program 

5-22 Federal Coal Program Programmatic EIS January 2017 

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barge transport to be viable. If competition for rail space among commodities 

continues to stiffen, it will put increasing upward pressure on delivered coal 

prices. The more recent downturn in oil prices and expansion in western rail 

capacity have alleviated some of the competition for rail space. 

Current and Future Policy and Regulatory Drivers 

Paris Agreement 

On December 12, 2015, 196 Parties to the United Nations Framework 

Convention on Climate Change (UNFCCC or Paris Agreement) adopted a 

framework to coordinate climate change mitigation and adaptation efforts. The 

Paris Agreement aims to limit global warming to less than 2 degree Celsius by 

limiting the amount of greenhouse gas emissions and by increasing the amount 

of sequestration. This goal is put into operation through each country’s 

submission of emission reduction goals, referred to as intended nationally 

determined contributions (INDCs). Countries will report their reduction 

targets every 5 years starting in 2020. Although emission reduction and climate 

change abatement strategies are still forthcoming to establish and achieve the 

INDCs, significant reductions in fossil fuel consumption are one likely 

component of many such plans and necessary to remain below the 2 degree 

Celsius target.75 

The EIA does not yet model the Agreement explicitly in its International Energy 

Outlook, as it is still awaiting more clarity on implementation strategies. 

However, as Federal, regional, or state emission reduction programs that reflect 

parallel carbon dioxide (CO2) reduction efforts are codified into law through 

regulations, such as the CPP, Regional Greenhouse Gas Initiative, or Assembly 

Bill 32, they are captured in the EIA Annual Energy Outlook. The Paris 

Agreement is anticipated to apply downward pressure to coal consumption 

both domestically and internationally. 

US-China Bilateral Agreement 

The US-China Bilateral Agreement announced in November 2014 reflected 

significant commitments to CO2 reductions by two of the world’s largest CO2

emitters, as well as two of the largest coal producers, consumers, and holders 

of reserves. The United States agreed to an emission reductions target of 26-28

percent below 2005 levels by 2025. China committed to peaking emissions 

around 2030. The two sides intend to cooperate on advanced coal technologies, 

nuclear energy, shale gas, and renewable energy to help optimize the energy mix 

 

75 Currently, the United States has committed to reduce net greenhouse gas emissions in the range of 17 percent 

by 2020 and 26-28 percent by 2025, relative to 2005 levels. This target is consistent with a straight-line emissions 

reduction pathway from 2020 to deep, economy-wide emission reductions of 80 percent or more by 2050. See 

International Energy Agency. 2015. Energy and Climate Change. p.150. Available at 

https://www.iea.org/publications/freepublications/publication/WEO20 
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and to reduce emissions, including from coal, in both countries.76 These 

reduction targets would put additional downward pressure on coal demand. 

North America Climate, Clean Energy, and Environment Partnership Action Plan 

On June 29, 2016, the leaders of Canada, Mexico, and the United States 

announced a plan to pursue 50 percent clean power generation collectively by 

2025. These carbon-free emissions sources would include renewable energy, 

nuclear generation, demand reduction through energy efficiency, and potential 

carbon capture and storage technologies. These carbon-free or low-carbon 

technologies would reduce the need for some carbon-intensive electricity 

generating sources, such as coal-fired power plants. The realization of this clean 

energy target would likely put downward pressure on domestic coal production 

relative to current projected levels. 

Morocco Conference of the Parties (2016) and Mid-Century Strategy 

On November 16, 2016, the United States submitted its Mid-Century Strategy 

for Deep Decarbonization to the United Nations Convention on Climate 

Change at the Conference of Parties hosted in Morocco.77 The submission was 

consistent with the Paris Agreement’s requirement to submit climate action 

plans called INDCs to keep global temperatures from rising by more than 2 

degrees Celsius. While not policy prescriptive, the technical document highlights 

key opportunities and challenges for reducing CO2 emissions 80 percent below 

2005 levels by 2050. The Mid-Century Strategy for Deep Decarbonization 

illustrates pathways that include a deep decarbonization of the electricity sector 

that includes a decrease in coal’s share of electricity generation. The amount of 

the decrease is expected to vary significantly depending on the future 

commercial deployment of carbon capture and sequestration, with enhanced 

use of carbon capture and sequestration associated with greater use of coal. 

Clean Power Plan and the Carbon Pollution Standards 

On August 3, 2015, the US Environmental Protection Agency (EPA) finalized the 

CPP as the first ever US national standards to address carbon pollution from 

existing power plants. Power plants are historically the largest source of 

greenhouse gas emissions in the United States, accounting for about 30 percent 

of the total. Coal has been the dominant fuel for power plants, and coal-fired 

power plants are, on average, the most carbon-intensive sources of electricity 

generation. 

The CPP requires that states develop and implement plans to ensure the power 

plants in their state—either individually, together, or in combination with other 

measures—achieve the emission requirements starting in 2022, with full 

 

76 The White House. 2016. US-China Joint Announcement of Climate Change. November 11, 2014. Available at 

https://www.whitehouse.gov/the-press-office/2014/11/11/us-china-joint-announcement-climate-change 

77 The White House. 2016. US Mid-Century Strategy for Deep Decarbonization. November 2016. p.26. Available 

at https://www.whitehouse.gov/sites/default/files/docs/mid_century_strategy_report-final.pdf 
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implementation by 2030. The rule is also anticipated to trigger additional 

investment in demand-side energy efficiency, resulting in less overall demand for 

electricity generation. On February 9, 2016, the US Supreme Court issued a 

stay of the regulation, halting its implementation until the litigation concludes. 

On September 27, 2016, oral arguments were held in front of a 10-judge panel 

at the DC Circuit Court of Appeals. 

While the CPP addressed emissions from existing power plants, the EPA also 

finalized the Carbon Pollution Standards on the same day in 2015 to reduce 

emissions from new, modified, and reconstructed sources.78 This rule 

established standards for electric utility steam-generating units (generally coalfired), along with stationary combustion turbines, that reflect the degree of 

emissions limitation achievable and consistent with the Clean Air Act 

requirements. 

Mercury Air Toxics Standard 

The EPA Mercury Air Toxics Standard was finalized in 2012, and its compliance 

requirements began in 2015 and 2016. The rule puts limits on toxic air 

pollution, including mercury, arsenic, and metals, from fossil-fuel-fired power 

plants. To comply with the rule’s emission standards, many sources would need 

to install capital-intensive pollution control equipment, such as flue gas 

desulfurization or dry sorbent injection. 

Cross-State Air Pollution Rule 

On July 6, 2011, the EPA finalized the Cross-State Air Pollution Rule under 

section 110 of the Clean Air Act to protect downwind states from upwind 

sources of air pollution in other states. The rule places limits on the amount of 

SO2 and nitrogen oxides (NOx) emissions that the eastern states’ power fleet 

may emit in a given year. It allows for limited emissions trading, but provides a 

mechanism to ensure that each state meets a specific level of reductions. Phase 

1 of the rule went into effect in 2015, and phase 2 is scheduled to go into effect 

in 2017. In September of 2016, the EPA issued an update to the Cross-State Air 

Pollution Rule to incorporate the 2008 ozone National Ambient Air Quality 

Standards, which resulted in different, often tighter, state ozone-season NOx 

emission limits for some of the affected states. By limiting the emissions of a 

pollutant associated with combusting coal, the rule is anticipated to put 

downward pressure on coal demand. 

Coal Ash 

In December 2014, the EPA finalized national regulations to provide a 

comprehensive set of requirements for the safe disposal of coal combustion 

residuals, commonly known as coal ash, from coal-fired power plants. The rule 

establishes technical requirements for coal combustion residual landfills and 

 

78 80 FR 64510 
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surface impoundments under Subtitle D of the Resource Conservation and 

Recovery Act. 

Effluent Limitations Guidelines 

On September 30, 2015, the EPA finalized a revision to the discharge limitations 

for toxics in power plant wastewater. The rule will likely drive additional 

investment for some coal steam power plants to reduce current discharge rates 

to levels commensurate with the new regulatory requirements. 

Clean Water Act 316(b) 

This EPA rulemaking required certain impingement and entrainment safeguards at 

power plants for cooling water intake. This rule covered roughly 1,065 existing 

facilities that are designed to withdraw at least 2 million gallons per day of cooling 

water. The EPA estimates that 544 power plants are affected by this rule. 

State Regulations and Programs 

In additional to Federal and international drivers, there are numerous state 

drivers to reduce greenhouse gas emissions that may affect coal demand as well. 

For instance, California’s Assembly Bill 32 is an economy-wide greenhouse gas 

emission reduction program for the state aimed at reducing greenhouse gas 

emissions to 1990 levels by 2020. The regional greenhouse gas initiative is a 

collective effort among nine New England and Mid-Atlantic states to reduce 

emissions from the power sector. Many states have clean energy and renewable 

energy incentives as well. As of late 2015, 29 states and the District of 

Columbia have renewable energy portfolio standards to support the 

development of renewable energy. New York State announced in August 2016, 

a new Clean Energy Standard that requires the utilities to procure 50 percent of 

the state’s electricity from eligible clean energy sources by 2030. Similarly, in 

March 2016, Oregon adopted legislation that requires two large investor-owned 

utilities operating in the state to supply 50 percent of the state's electricity from 

renewable sources by 2040. The law also requires these utilities to phase out 

electricity from coal by 2030. 

5.5 MARKET PROJECTIONS

A variety of government and private sector sources of energy market 

projections are available and will be considered as the PEIS process continues. 

Due to the large number of variables and assumptions inherent in forecasting 

energy markets, projections vary from model to model and from year to year as 

data is updated. The Energy Information Administration (EIA) notes that 

multiple organizations issue projections for the coal sector and compares 

projections for some key metrics in a report.79 For the purposes of this scoping 

report, the BLM provides summaries of the projections from models used by 

the EIA and EPA. These are projections from particular versions and platforms 

 

79 US EIA. 2016. Annual Energy Outlook 2016. CP7 Available at http://www.eia.gov/outlooks/aeo/ 

section_comparison.cfm 
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of those models, but the BLM notes that subsequent or alternative versions may 

contain different projections as assumptions are periodically updated. For 

instance, a 2017 version of a model may contain information and assumptions 

not known and, therefore, not included in the 2016 version. These are not 

predictions, but projections under one reasonable set of assumptions and 

current best available data. 

On September 8, 2016, the Columbia School of Law’s Sabin Center also hosted 

a workshop titled “US Coal in the 21st Century: Markets, Bankruptcy, Finance 

and Law,” with panelist from financial, consulting, non-profit, government, and 

academic sectors. Panelists generally highlighted the growing market headwinds 

against coal, primarily due to lower cost gas and renewable generation, and midand long-term outlooks that showed coal demand well below historical levels.80 

These findings are consistent with some of the recent modeling and forecasts by 

the EIA and the EPA discussed below. 

5.5.1 Energy Information Administration 

The EIA Annual Energy Outlook released in 2016 provides projections for 

energy markets, including US coal and electricity markets using the National 

Energy Modeling System model. The most recent version contained a reference 

case reflecting the known technology and regulatory environment.81 The 

outlook contains projections for the energy sectors through 2040. The 2016 

reference case included a mass-based version of the CPP implementation. The 

Annual Energy Outlook projections for US coal consumption, production, and 

prices from the reference case are discussed below. 

In the Annual Energy Outlook 2016 reference case, coal’s share of total US 

electricity generation is projected to drop from 33 percent in 2015 to 21 

percent in 2030 and 18 percent in 2040. Total coal production is projected to 

fall from 896 million tons in 2015 down to 827 million tons in 2022 when CPP 

compliance begins, and drop down to 664 million tons in 2030 at full CPP 

compliance.82 

In the near term, coal generation resumes its role as the largest source of US 

electricity, but natural gas generation is projected to surpass it by the late 2020s 

in the reference scenario. Renewable generation is also projected to surpass 

coal generation by 2030 due to a combination of environmental policies, Federal 

 

80 A summary of the panel discussions conducted during the US Coal in the 21st Century: Markets, Bankruptcy, 

Finance and Law workshop, as well as presentations offered by the panelists in PDF and PPT format, can be found 

in Volume 2 of this scoping report. 

81 The EIA Annual Energy Outlook also includes a variety of side cases that offer projections under alternative 

market, macroeconomic, and regulatory assumptions. 

82 US EIA. 2016. Annual Energy Outlook 2016 Early Release: Annotated Summary of Two Cases. May 17, 2016. 

Available at https://www.eia.gov/forecasts/aeo/er/pdf/0383er(2016).pdf 
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tax incentives, and declining capital cost.83 The reference case projects 45 GW 

of US coal-fired power plant retirements in the near term (by end of 2016) due 

to low natural gas prices and implementation of the EPA’s Mercury and Air 

Toxics Standard. This leaves 226 GW of coal remaining in service in 2016. 

Another 56 GW of that capacity is projected from coal-fired power plant 

retirements by 2040, leaving 170 GW of coal-fired power plant capacity in 

service. The United States is projected to be a small net exporter of coal 

through the 2040 time horizon.84

In the western coal markets, where over 99 percent of Federally mined coal is 

located, the Annual Energy Outlook reference case projects the most significant 

decline in coal production, with levels dropping from current levels near 500 

million tons to 378 million tons in 2030 and 329 million tons in 2040.85 This 

drop accounts for 52 percent of the projected nationwide decline in coal 

production by 2030. 

The 2016 Annual Energy Outlook projects that real average mine mouth coal 

prices rise due to falling productivity as geological conditions become less 

favorable. In the reference scenario, 2015 average mine mouth prices of $33.80 

per short ton are expected to remain mostly flat at $33.84 through 2030 and 

then up to $38.68 by 2040.86,87 For the western states, where coal prices are 

below the nationwide average due to a variety of factors, including more 

favorable geology, reference case prices are anticipated to climb from 2015 

levels of $18.7 per ton to $19 per ton in 2030 and $21.6 per ton in 2040.88

5.5.2 Environmental Protection Agency 

The EPA maintains an application of the Integrated Planning Model (IPM) to 

analyze the impact of power sector regulations. The IPM is a linear 

programming, least-cost optimization model of the US power sector developed 

by ICF consulting. It provides forecasts of least-cost capacity expansion and 

electricity dispatch to meet energy demand subject to market and regulatory 

 

83 US EIA. 2016. Annual Energy Outlook. Forecast Data. Available at 

http://www.eia.gov/forecasts/aeo/data/browser/#/?id=8-AEO2016®ion=0-0&cases=ref2016&start=2014&end= 

2040&f=A&linechart=ref2016-d032416a.6-8-AEO2016&sourcekey=0 

84 US EIA. 2016. Annual Energy Outlook 2016 Early Release: Annotated Summary of Two Cases. May 17, 2016. 

Available at https://www.eia.gov/forecasts/aeo/er/pdf/0383er(2016).pdf 

85 US EIA. 2016. Annual Energy Outlook 2016. Table: Coal Supply, Disposition, and Prices. Available at 

http://www.eia.gov/forecasts/aeo/data/browser/#/?id=15-AEO2016&cases=ref2016~ref_no_cpp&sourcekey=0 

86 2015 prices available EIA. 2015. Annual Coal Report. Available at http://www.eia.gov/coal/annual/pdf/acr.pdf. 

Projected 2030 and 2040 prices available in US EIA 2016. See: US EIA. 2016 Annual Energy Outlook in Coal 

Supply, Disposition, and Prices Table. Available at http://www.eia.gov/outlooks/aeo/data/browser/#/?id=15-

AEO2016&cases=ref2016&sourcekey=0 

87 Projected 2030 and 2040 prices available in US EIA 2016. See: US EIA 2016. Annual Energy Outlook in Coal 

Supply, Disposition, and Prices Table. Available at http://www.eia.gov/outlooks/aeo/data/browser/#/?id=15-

AEO2016&cases=ref2016&sourcekey=0 

88 US EIA. 2016. Annual Energy Outlook 2016. Coal Production and Minemouth Prices by Region. Available at 

http://www.eia.gov/outlooks/aeo/data/browser/#/?id=94-AEO2016&cases=ref2016~ref_no_cpp&sourcekey=0 
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factors. It captures a wide range of issues related to the power sector, including 

fuel markets such as coal. The model is widely used by the government and 

industry to assess policy and market influences.89

The EPA’s Regulatory Impact Analysis for the CPP was informed by IPM 

modeling conducted that reflects market and regulatory outlooks, as well as the 

final CPP emission limitations.90 This scenario includes projections on coal 

production and consumption through a 2050 time frame, as coal is an 

instrumental commodity to power sector operations, and, thus, its demand is 

shaped by power-sector regulations. The EPA application of IPM to reflect the 

CPP provides projections for the power sector comparable to the Annual 

Energy Outlook reference scenario. The IPM projections are specific to US 

thermal coal markets. 

In the EPA’s modeling of the mass-based CPP, nationwide coal generation was 

projected to be 28 percent and 25 percent of electricity generation in 2030 and 

2040, respectively. These levels reflected more demand-side energy efficiency 

and more renewable generation relative to today’s levels, which allow for a 

more balanced nationwide generation portfolio. This coal-fired generation 

totaled 1,144 Terawatt hours (TWh) in 2030 and 1,092 TWh in 2040 and 

corresponded to about 685 and 692 million tons of US coal production in those 

same years.91

Under this model, renewable electricity generation is projected to be a larger 

share of total electricity generation by 2040. There is also a significant amount 

of coal-fired power plant retirements due to an aging fleet, more competitive 

capital cost for competing technologies, lower gas prices, and lower demand 

growth. The EPA modeling projects 174 GW remaining in service in the CPP 

scenario in 2030 and 170 GW in 2040. 

In the western coal basins, the EPA application of IPM projected coal production 

decreasing from current levels of 484 million tons to 317 million tons in the 

CPP scenario by 2030. The decrease is driven, in part, by increased inter-basin 

competition as eastern interior coal becomes more competitive due to 

advances in low-cost, long-wall mining technologies and because of less 

consumer sensitivity to the higher sulfur content of interior coal as more plants 

install flue-gas desulfurization equipment. 

 

89 US EPA. 2013. Documentation for Base Case v.5.13 Modeling Framework. Chapter 2: Modeling Framework. 

November 27, 2013. Available at https://www.epa.gov/airmarkets/documentation-base-case-v513-modelingframework 

90 US EPA. 2015. Regulatory Impact Analysis for the Clean Power Plan Final Rule. Table 3-11. October 23, 2015. 

Available at https://www.epa.gov/sites/production/files/2015-08/documents/cpp-final-rule-ria.pdf 

91 The uptick in production in spite of the drop in coal-fired power plant electricity generation is due to increased 

demand from industrial sources and exports in 2040. 
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Projected coal prices are similar to the Annual Energy Outlook 2016 outlook. 

For western coals they are in the $20/ton to $24/ton range, and nationwide 

they are in a $35/ton to $40/ton range for years 2030 to 2040.92 Western coal 

prices remain the lowest in the country on a per ton and a per Btu basis among 

all major coal producing regions reflecting the high productivity and low 

production cost characteristic of that region.93 

5.5.3 Coal Exports 

Global coal pricing is US dollar-denominated. As the US dollar strengthens 

relative to other currencies, US coal becomes more expensive relative to coal 

exported from competing countries. As the US dollar weakens, US coal 

becomes relatively more competitive. 

Coal exports accounted for a small share, approximately 8 percent, of total US 

coal production in 2015 at 74 million tons.94,95 The majority of that export is 

metallurgical coal, primarily used for industrial purposes, which comes from 

non-Federal lands. The amount of thermal coal, the predominant coal type 

produced on Federal lands, exported was 28 million tons or approximately 3 

percent of total US production in 2015.96 The 2016 EIA Annual Energy Outlook 

projections for total coal export going forward are relatively flat through 2030 

and then increase upward by approximately 20 million tons, from current levels 

of 74 million tons, and constitute approximately 15 percent of total US 

production in 2040.97 The US thermal coal portion of coal exports is projected 

to follow a similar trajectory but increase at a higher rate, reaching 56 million 

tons or approximately 9 percent of total production by 2040.98 This uptick from 

2015 levels is partially due to reduced US demand. But even with the reduced 

US demand, these projected steam coal export levels reflect a relatively small 

portion of US production and do not exceed 2012 tonnage export levels.99

In all scenarios examined, projected coal exports have declined from prior year 

projections and are anticipated to remain a small source of demand for US coal 

 

92 All EPA IPM coal prices are listed in $ per short ton. 

93 US EPA. 2015. Analysis of the Clean Power Plan. August 3, 2015. Available at https://www.epa.gov/airmarkets/ 

analysis-clean-power-plan 

94 US EIA. 2015. Annual Coal Report 2015. November 2016. Available at http://www.eia.gov/coal/annual/pdf/acr.pdf 

95 US EIA. 2016. Today in Energy. US coal exports declined 23% in 2015, as coal imports remained steady. March 7, 

2016. Available at http://www.eia.gov/todayinenergy/detail.php?id=25252 

96 US EIA. 2016. Coal Data Browser. Available at 

http://www.eia.gov/beta/coal/data/browser/#/topic/41?agg=2,1,0&rank=ok&linechart=COAL.EXPORT_QTY.TOTTOT-TOT.A&columnchart=COAL.EXPORT_QTY.TOT-TOT-TOT.A&map=COAL.EXPORT_QTY.TOT-TOTTOT.A&freq=A&start=2001&end=2015&ctype=map<ype=pin&rtype=s&pin=&rse=0&maptype=0 

97 US EIA. 2016. 2016 Annual Energy Outlook. Available at http://www.eia.gov/forecasts/aeo/data/browser/ 

#/?id=15-AEO2016®ion=0-0&cases=ref2016~ref_no_cpp&start=2013&end=2040&f=A&sourcekey=0 

98 US EIA. 2016. Annual Energy Outlook 2016. Table: World Steam Coal Flows by Importing Regions and 

Exporting Countries. Available at http://www.eia.gov/forecasts/aeo/data/browser/#/?id=96-

AEO2016&cases=ref2016&sourcekey=0 

99US EIA. 2016. Imports Data. Available at http://www.eia.gov/coal/data.php#imports 
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production. US coal export is generally viewed as a swing supplier of 

international markets, meaning it is one of the last suppliers to serve 

international markets after other exporting countries are at capacity, and one of 

the first exporting countries to pull back supply as demand goes down. Export 

demand has a significant degree of uncertainty related to currency valuations, 

international economic growth, climate policy, and trade protectionist policies 

from importing countries. In addition, the upward reaches of US steam coal 

export are limited in the near and medium term by export terminal capacity in 

the northwestern United States.100 

5.6 GREENHOUSE GAS EMISSIONS

Greenhouse gas emissions trap heat in the atmosphere and, as emissions and 

atmospheric concentrations have increased, are associated with an increase of 

1.5 degrees Fahrenheit in average global temperatures over the past century.101

These increases in global mean temperature drive changes in climate and 

weather patterns. CO2 is the most abundant form of greenhouse gas. CO2

enters the atmosphere through the burning of fossil fuels, such as coal, natural 

gas, and oil, and accounts for 82 percent of total US greenhouse gas emissions in 

2014. Other greenhouse gases, such as methane, are emitted during the 

production of fossil fuels. Each greenhouse gas has a different atmospheric 

lifetime and radiative forcing (heat trapping) potential. Their emission volumes 

can be converted to a CO2 equivalent (CO2e) to normalize the greenhouse 

effect across different pollutants. 

In 2014, total US emissions were 6,870 million metric tons of CO2e.102

Electricity generation was the largest greenhouse gas emitting sector in the 

United States, accounting for 30 percent, or 2,081 million metric tons, of CO2e 

in 2014.103 US coal production and combustion were responsible for more than 

1,720 million metric tons, or about 25 percent, of US greenhouse gas 

emissions.104 Most of these coal-related emissions (1,570 million metric tons) 

occur at the point of combustion within the electricity sector. Industrial CO2e 

emissions from coal combustion added another 75 million tons of CO2e. Coal 

extraction activities (without considering combustion emissions) account for 

 

100 Zubets-Anderson, A. . 2016. “Bankruptcy and Financing Rating Agency’s Perspective.” Moody’ Investor Service. 

Presented at the US Coal in the 21st Century: Markets, Bankruptcy, Finance and Law conference. Columbia 

Center on Global Energy Policy and the Sabin Center for Climate Change Law. September 2016. Summary 

Available at http://web.law.columbia.edu/sites/default/files/microsites/climate-change/panel_summaries_-

_us_coal_in_the_21st_century.pdf 

101 US EPA. 2016. Climate Change: Basic Information. Available at https://www.epa.gov/climatechange/climatechange-basic-information 

102 US EPA. 2016. Greenhouse Gas Inventory Report: 1990-2014. Table 2-11. April 15, 2016. Available at 

https://www3.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2016-Main-Text.pdf 

103 Ibid.

104 Ibid.
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approximately 68 million metric tons of CO2e.105 Abandoned underground coal 

mines added another 6.3 million metric tons of CO2e emissions. 

The domestic electricity sector drives between 80 and 90 percent of the US

coal consumption each year. Coal combustion for electricity is more carbon 

intensive than other fossil fuels, accounting for 75 percent of the CO2 emissions 

from the electricity sector even though it accounts for only 39 percent of the 

total electricity generated in 2014.106 

With respect to federally owned coal, as stated, 42 percent of total US coal 

production occurred on Federal lands in 2015.107,108 Using data available at the 

time, a report by Stratus Consulting states that in 2012 the combustion of 

Federal coal and coalbed methane emissions resulting from Federal coal 

production together accounted for nearly 770 million metric tons of CO2e 

emissions, or over 10 percent of total US greenhouse gas emissions.109

Estimates by BLM using more recent data suggest that as of 2014, CO2

emissions attributable to federal coal accounted for 11 percent of total US 

greenhouse gases and a recent report noted that they account for 13 percent of 

all US energy-related CO2 emissions.110 

Greenhouse gas emissions associated with coal production can generally be 

divided into two broad categories: upstream emissions associated with the 

mining and transportation of the coal, and downstream emissions associated 

with the combustion of the coal. The greenhouse gas implications of each 

category are discussed below. 

5.6.1 Upstream Emissions 

Measuring the level and source of greenhouse gas emissions from coal 

production and consumption starts with emissions released during coal mining. 

These upstream greenhouse gas emissions primarily occur in the form of 

methane released from coal seams to the atmosphere in the coal mining 

 

105 US EPA. 2016. Inventory of US Greenhouse Gas Emissions and Sinks: 1990 – 2014. April 15, 2016. pp.1-17.

Available at https://www.epa.gov/sites/production/files/2016-04/documents/us-ghg-inventory-2016-main-text.pdf

106 US EIA. 2015. Table 1.1. Total Electric Power Industry Summary Statistics, 2015 and 2014. Available at 

http://www.eia.gov/electricity/annual/html/epa_01_01.html. 

Although 2015 US greenhouse gas inventory data is not yet available, 2015 EIA generation data suggest that coal 

generation dropped to 33 percent of total electricity generation. See EIA 2016. 2016 Annual Energy Outlook. 

Table IFI-3. November 2016. Available at http://www.eia.gov/forecasts/aeo/pdf/0383(2016).pdf 

107 US Extractive Industries Transparency Initiative. 2015. Full dataset. Table 1. Available at 

https://useiti.doi.gov/downloads/federal-production/ 

108 US EIA. 2016. Annual Coal Report. November 3, 2016. Available at http://www.eia.gov/coal/annual/ 

109 Stratus Consulting. 2014. Greenhouse Gas Emissions from Fossil Energy Extracted from Federal Lands and 

Waters: An Update. Prepared for The Wilderness Society. December 23, 2014. Available at 

https://cdn.americanprogress.org/wpcontent/uploads/2015/03/WildernessSociety_GHGEmissions_12-

23Revisions.pdf 

110 Gillingham et. al. 2016. Federal Minerals Leasing Reform and Climate Policy. The Hamilton Project. Brookings. 

December 2016. 
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process. Methane is a potent greenhouse gas that has approximately 25 times 

more warming potential than carbon dioxide over a 100-year life period. It is 

the second-most prevalent greenhouse gas from human activities in the United 

States and accounts for approximately 10 percent of all US greenhouse gases. 

Coal mining accounts for approximately 9 percent of total US methane 

emissions.111 The amount of average methane release associated with removing 

a ton of coal varies significantly depending on whether it occurs at an 

underground or at a surface mine. Underground mines contain more methane, 

as they are under more geological pressure. In 2015, the United States had 305 

underground coal mines and 529 surface mines operating.112 Using EPA and EIA 

data results in estimates for the amount of greenhouse gas emissions from coal 

mine methane and post-mining processing per ton of coal mined of 0.02 tons of 

CO2e per ton of coal mined for surface mines and approximately 0.16 tons of 

CO2e per ton of coal mined for underground mines.113,114

While methane is the largest greenhouse gas source from coal production, 

other mining operations add to the emission total. Diesel, which emits CO2

when combusted, is a primary energy source for mining operations and is often 

used to move coal by trucks on-site. Electricity, most often dependent on the 

combustion of a fossil fuel, is also used to power mine operations. Coal 

production-associated emissions are small relative to emissions associated with 

combustion, averaging 2.7 percent of the lifecycle CO2 emissions.115

Transportation of coal from the mine to the point of consumption, generally a 

power plant, is another significant source of greenhouse gas emissions. Coal is 

most frequently transported by rail, but river barges and trucks play a significant 

role as well. These modes of transportation rely on diesel fuel, which emits CO2

when combusted. The greenhouse gas emissions associated with transportation 

are more significant for western coals, where more than 99 percent of Federal 

coal is located, as they have a greater distance to travel on average to reach 

their end use. In Wyoming, approximately 90 percent of the coal is shipped out 

of the state by rail. Transportation-associated emissions are small relative to 

emissions associated with combustion, averaging 1.7 percent of coal’s lifecycle 

 

111 US EPA. 2016. Overview of US Greenhouse Gas Emissions. Available at https://www.epa.gov/ghgemissions/ 

overview-greenhouse-gases#methane 

112 US EIA. 2016. Annual Coal Report. Table 1. November 3, 2016. Available at http://www.eia.gov/coal/annual/ 

113 Based on emissions data at https://www.epa.gov/sites/production/files/2016-04/documents/us-ghg-inventory2016-main-text.pdf at page 160 

114 Coal production data from US EIA. 2016. Annual Coal Report. Table 1. November 3, 2016. Available at 

http://www.eia.gov/coal/annual/ 

115 Foley, J. H. and P. Howard. 2016. Illuminating the Hidden Cost of Coal. New York University School of Law 

Institute of Policy Integrity. p. A-13. Available at http://policyintegrity.org/files/publications/ 

Hidden_Costs_of_Coal.pdf 
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CO2 emissions.116 However, when taking into account specific mine location 

and transportation distance and method, the share of greenhouse gas emission 

associated with transportation from a particular mine or basin may be higher. 

5.6.2 Downstream Emissions 

The most significant greenhouse gas impacts associated with coal occur at the 

point of combustion, estimated at 95.6 percent of coal’s lifecycle CO2e 

emissions.118 As stated, coal is the most CO2 emissions-intensive fossil fuel, 

accounting for over 70 percent of CO2 emissions from the power sector. 

Coal's carbon intensity is significantly higher than natural gas's carbon intensity 

at the site of combustion. Taking into account the heat rate of coal plants versus 

that of natural gas combined-cycle plants, the average emission rate of a coal 

plant at 2,215 lbs of CO2/MWh is more than double that of a gas-fired 

combined-cycle plant at 902 lbs of CO2/MWh. Coal-fired electricity generation 

has been the most significant contributor to CO2 emissions from the power 

sector, and that is projected to continue under the latest Annual Energy 

Outlook reference case scenarios. CO2 content can vary significantly on a per 

ton basis for different coal types, such as subbituminous or bituminous. 

However, on an energy basis, CO2 emission factors from coal are fairly 

consistent across coal types and geography, occupying a narrow range of 205 –

215 lbs CO2 per mmBtu.117 

In 2015, Federal coal accounted for 42 percent of total US coal production at 

375 million tons with nearly all of this supplying the US electricity generation. 

Greenhouse gas emissions from coal-fired electricity generation have been 

decreasing due primarily to market drivers reducing coal-fired electricity 

consumption in recent years and are expected to reach new lows in 2016. 

Future coal production will likely be influenced by these same market drivers as 

well as existing state, regional, and Federal policies that partially address some of 

the externalities associated with CO2 emissions at the point of combustion. These 

include programs like California’s Assembly Bill 32, the Northeast’s Regional 

Greenhouse Gas Initiative, and the EPA’s CPP. A small amount of Federal coal is 

also exported and combusted outside of the United States, but export markets 

are limited as is port capacity. As discussed in more detail in Section 5.5.3, 

exports are anticipated to remain a small portion of demand for US coal in future 

years.118

 

116 Spath, P. L., M. K. Mann, and D. R. Kerr. 1999. Life Cycle Assessment of Coal-fired Power Production. Report 

no. NREL/TP-570-2511). National Renewable Energy Lab. June 1999. Golden, Colorado. Available at 

http://www.nrel.gov/docs/fy99osti/25119.pdf 

117 US EIA. 2016. Frequently Asked Questions. How much carbon dioxide is produced when different fuels are 

burned? June 14, 2016. Available at https://www.eia.gov/tools/faqs/faq.cfm?id=73&t=11

118 US EIA. 2016. 2016 Annual Energy Outlook. Table: Coal Supply, Disposition, and Prices. Available at 

http://www.eia.gov/forecasts/aeo/data/browser/#/?id=15-AEO2016®ion=00&cases=ref2016~ref_no_cpp&start= 

2013&end=2040&f=A&sourcekey=0 
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5.6.3 Quantifying Greenhouse Gas Emissions on Federal Lands 

As part of Secretarial Order 3388, the Secretary instructed the Department of 

the Interior, through the USGS, to establish and maintain a public database to 

account for the annual carbon emissions from fossil fuels developed on Federal 

lands. Although not complete, this data source is under development and will be 

one potential database informing the Draft and Final PEIS. 

The USGS is designing this database to report both emissions and sinks for 

CO2, methane, and nitrous oxide resulting from the coal production on Federal 

lands by state. The database aims to combine ONRR, BLM, and BOEM data 

along with EPA emissions data to estimate total greenhouse gas emissions from 

fossil fuel extracted on Federal lands. It also aims to use USGS data to measure 

biological sequestration on Federal lands that serve as emissions sinks. By 

subtracting the sequestration estimates from the emission estimates, this tool 

can provide a net emissions value for Federal lands. An initial public release of 

the data is expected in mid-2017. This data will provide additional refinement 

and verification of coal lifecycle emission estimates. 

5.7 SOCIOECONOMIC CONSIDERATIONS

The PEIS will evaluate a number of potential changes to the Federal coal 

program. Some of these potential changes could have impacts on the livelihoods 

and fiscal soundness of coal-dependent communities, particularly those near the 

Powder River Basin, due to the heavy concentration of leases and production 

from the Federal lands there. Appalachian coal communities could also be 

affected, as changes in the demand for predominantly western Federal coal in 

turn can affect the market for Appalachian coal. This section provides baseline 

socioeconomic information relevant to the PEIS. 

5.7.1 Communities Dependent on Coal Extraction 

Community Impacts 

Viewed globally, the development potential of energy resources has been 

interpreted through two very different frameworks. The positive view holds 

that investment in mineral extraction literally unlocks buried treasure, leading to 

a “virtuous cycle of socioeconomic change.”119 A more skeptical view (the 

“resource curse”) suggests that the wealth generated by mineral extraction may 

not be shared locally and that an emphasis on resource extraction may deter 

development in other economic sectors. Recent research is clarifying the 

conditions that encourage local and regional economic gains from mining 

activity.120 

 

119 Bridge, G. 2004. “Contested Terrain: Mining and the Environment”. Annual Review of Environment and Resources

29, no. 1(2004): 225. 

120 Cust, J. and S. Poelhekke. 2015. “The Local Economic Impacts of Natural Resource Extraction”. Annual Review of 

Resource Economics 7(1): 251–68. 
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Since World War II, US coal mining employment has been in a long-term 

decline, falling from 533,000 jobs in 1948 to 78,000 in 2000.121 Technological 

change, resulting in rising productivity per worker, has been the primary driver 

of the decline.122 The downward trend was interrupted by a demand-driven 

employment boom in the 1970s (employment rose 74 percent in the period 

1970 – 1980), followed by a bust in the 1980s.123 The employment boom 

resulted not only from an increase in coal mining operations, but also from 

construction of a number of coal-fired generating plants (see Figure 5-4). 

Figure 5-4. Coal Mining – Employment, 1948 – 2015 

Sources: 

Bureau of Economic Analysis 2016124

MSHA 2016125

Most studies of the community-level effects of US coal mining expansion come 

from this boom/bust cycle of the 1970s and 1980s. Many communities 

underwent rapid change. As a result of construction of the coal-fired 

Intermountain Power Project—with a proposed capacity of 3,000 megawatts—

 

121 Bureau of Economic Analysis. 2016. National Income and Products Accounts (NIPA) Tables 6.4A and 6.4C. 

Available at: http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&903=192. 

122 Betz, M. R., M. Farren, and L. Lobao. 2015. “Coal Mining, Economic Development, and the Natural Resources 

Curse”. Energy Economics 50(107):105-116. Available at https://mpra.ub.uni-muenchen.de/58016/ 

123Ibid. 

124 Bureau of Economic Analysis. 2016. National Income and Products Accounts (NIPA) Tables 6.4A and 6.4C. 

Available at: http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&903=192. 

125 MSHA (United States Department of Labor Mine Safety Health Administration). 2016. Coal Mine and 

Employment Data. Accessed September 2016. Available at http://arlweb.msha.gov/OpenGovernmentData/ 

OGIMSHA.asp. 
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the population of Delta, Utah rose from 1,930 people in 1980 to 6,670 in 1984 

at the height of construction, and declined to 3,000 by 1990.126 

Many boomtowns experienced an acute shortage of infrastructure and services, 

particularly housing. Studies from the 1970s painted a negative picture of 

widespread social disruption, sometimes termed the “Gillette Syndrome.”

Effects included “dramatic increases in divorce, depression[,] . . . criminal 

activity, mental disorders, and other social problems.”127 Later research 

suggested a more complex picture, recognizing recovery and adaptation to 

changing circumstances, in addition to tempering the overly negative 

characterization of social change under rapid energy development.128 

As shown in Figure 5-5, there are major regional differences in the trends of 

both coal employment and production. Nationwide coal industry employment 

fell some 50 percent between 1987 and 2014 while nationwide production rose 

slightly. The dramatic change is in western coal production. Western 

production doubled between 1987 and 2008, but then began to decline. It is the 

far lower labor intensity of western coal operations, dominated by the Powder 

River Basin, over eastern coal that made it possible for production to increase 

while national employment fell dramatically (see Section 5.4.5 for more 

information).129 Today the western coal industry, faced with declining 

employment, is following the trend seen earlier in Appalachia and other eastern 

coal regions.130 

Many of the social effects of abruptly lower coal production noted from the bust 

of the 1980s are evident today as part of a longer-term decline in coal 

employment and production. Simple models of the economy assume labor 

mobility; as jobs disappear in one region or sector, workers relocate to more 

favorable labor markets. For a variety of reasons, the reality is far more 

complex; many factors work to keep people in place, even after mines have cut 

back production or closed. In coal country, as in many other rural areas 

centered on resource extraction, communities reflect a distinctive way of life 

that involves social ties and cultural values as much as economic activities. The 

 

126 Brown, R. B., S. F. Dorins, and R. S. Krannich. 2005. “The Boom‐bust‐recovery Cycle: Dynamics of Change in 

Community Satisfaction and Social Integration in Delta, Utah”. Rural Sociology 70 (1):31. Available at 

http://www.sublettewyo.com/ArchiveCenter/ViewFile/Item/71 

127 Smith, M. D., R. S. Krannich, and L. M. Hunter, “Growth, Decline, Stability, and Disruption: A Longitudinal 

Analysis of Social Well-Being in Four Western Rural Communities”. Rural Sociology 66(3):427. 

128 Brown, R. B., S. F. Dorins, and R. S. Krannich. 2005. “The Boom‐bust‐recovery Cycle: Dynamics of Change in 

Community Satisfaction and Social Integration in Delta, Utah”. Rural Sociology 70(1):31. Available at 

http://www.sublettewyo.com/ArchiveCenter/ViewFile/Item/71 

129 US EIA. 2016. Coal data browser. Coal produced per labor hour. Available at http://www.eia.gov/coal/annual/ 

pdf/table21.pdf. 

130 For example, coal production in the western United States was 6.5 percent lower in 2015 relative to 2014. 

See US EIA. 2015. 2015 Annual Coal Report. Available at http://www.eia.gov/coal/annual/. 
5. Federal Coal Leasing Program 

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Figure 5-5. Coal Employment and Production, 1987 – 2015 

Sources: 

Employment: MSHA 2016131 

Production (1987-2011): US EIA 2012132

Production (2012-2015): US EIA 2016133

way of life in coal communities is based on ties of employment and friendship, 

ties of family across multiple generations, and ties to place. As one author wrote 

of the anthracite mining towns of northeastern Pennsylvania: 

“The people remaining in these towns – half or one-third the 1920 number –

have a powerful sense of belonging just where they are.”134

Renewable energy and natural gas are rapidly gaining ground relative to coal as 

the sources for generating electricity. But there is no assurance that this shift 

can provide a lifeline to struggling coal-dependent communities or workers who 

are unwilling to relocate. Notwithstanding these challenges, commitment to 

place and community can be a very positive force in finding a path to a more 

resilient and diversified local economy. There are numerous case studies of 

formerly coal-reliant Appalachian communities that have used economic 

 

131MSHA (United States Department of Labor Mine Safety Health Administration). 2016. Coal Mine and 

Employment Data. Accessed September 2016. Available at 

http://arlweb.msha.gov/OpenGovernmentData/OGIMSHA.asp.

132 US EIA. 2012. Annual Energy Review, Table 7.2: Coal Production, 1949-2011. Available at: 

https://www.eia.gov/totalenergy/data/annual/showtext.php?t=ptb0702 

133 US EIA. 2016. Annual Coal Report, Table 1. Coal Production and Number of Mines by State and Mine Type. 

Available at: http://www.eia.gov/coal/annual/ 

134 Marsh, B. 1987. “Continuity and Decline in the Anthracite Towns of Pennsylvania”. Annals of the Association of 

American Geographers 77(3):337. Available at http://www.facstaff.bucknell.edu/marsh/anthracite_towns.pdf 
5. Federal Coal Leasing Program 

5-38 Federal Coal Program Programmatic EIS January 2017 

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development strategies that invest in local and regional assets—such as human 

capital, infrastructure, entrepreneurs, and emerging industry clusters—to 

successfully diversify their economies.135

Demographic and Employment Data for Areas Supplying Coal 

As described above, coal production occurs in three broad regions: Appalachian, 

Interior, and Western. Because the vast majority of coal from Federal lands is 

produced in the western region, this section divides the western region into 13 

subregions, based on the coal supply regions used in the EPA Base Case v5.13.136

Table 5-3, below, describes the 15 regions and subregions, and includes both 

Federal and non-Federal coal resources. A map is shown in Figure 5-6. 

Table 5-3 

Coal Supply Regions 

Region Subregion Description Number of 

Counties

Appalachian None Includes portions of Pennsylvania, West 

Virginia, Ohio, Maryland, Virginia, Eastern 

Kentucky, Tennessee, and Alabama

193

Interior None Includes portions of Indiana, Illinois, 

Western Kentucky, Missouri, Kansas, 

Oklahoma, Texas, Arkansas, and Louisiana

206

Western CG Colorado, Green River 44

CR Colorado, Raton 1

CU Colorado, Uinta 5

UT Utah 8

ME Montana, East 1

ND North Dakota 22

MP Montana, Powder River 3

MT Montana, Bull Mountain 14

AZ Arizona 1

NS New Mexico 2

WG Western Wyoming 4

WH Wyoming Northern Powder River Basin 1

WL Wyoming Southern Powder River Basin 3

 

135 Center for Regional Economic Competitiveness, 2014. Economic Diversity in Appalachia. Statistics, Strategies, 

and Guides for Action. Prepared for Appalachian Regional Commission. February 2014. Available at 

https://www.arc.gov/assets/research_reports/EconomicDiversityinAppalachiaCompilationofAllReports.pdf 

136 The EPA maintains an application of the IPM to analyze the impact of power sector regulations. IPM is a linear 

programming, least-cost optimization model of the US power sector developed by ICF consulting. It provides 

forecasts of least-cost capacity expansion and electricity dispatch to meet energy demand subject to market and 

regulatory factors. It captures a wide range of issues related to the power sector, including fuel markets such as 

coal. The model is widely used by government and industry to assess policy and market influences. 

See US EPA. 2013. Documentation for EPA Base Case v.5.13 Using the Integrated Planning Model. EPA 

#450R13002. Available at https://www.epa.gov/sites/production/files/2015-

07/documents/documentation_for_epa_base_case_v.5.13_using_the_integrated_planning_model.pdf 
5. Federal Coal Leasing Program 

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Figure 5-6. Coal Supply Regions 

Table 5-4 presents population, wage, and income information for the 15 coal 

supply regions and the United States. As the data show, these parameters vary 

widely across regions. Employment growth between 1970 and 2014 ranged 

from half of the national rate (e.g., in the Appalachian, Rocky Mountain CR, and 

Western Montana MT regions) to over three times the national rate (e.g., 

Rocky Mountain CU region). Personal income growth showed similar trends. 

With a few exceptions, average annual wages were at or below the national 

average in 2015. However, with the exception of the Rocky Mountain CU 

region, the average annual wages for mining (except oil and gas), for regions 

reporting this variable, substantially exceeded the national and regional average 

wages. 
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Table 5-4 

Sociodemographic Characteristics of Coal Supply Regions 

App. Int. CG CR CU UT ME ND MP MT AZ NS WG WH WL Total 

US

Population 2014 

(thous.)1 11,851 22,017 45 14 269 124 12 325 27 191 108 198 84 14 87 318,857

Pop. Change 1970 -

2014 (%)

1 5.2 35.7 125.1 -11.2 172.3 116.8 17.8 33.5 37.1 8.4 124.1 105.5 83.9 132.2 138.0 56.5

Employment 

Change 1970 - 2014 

(%)

1

43.4 75.8 286.2 48.8 316.6 198.1 114.0 165.1 72.5 41.7 251.5 205.5 138.5 246.8 252.5 103.6

Personal Income 

Change 1970- 2014 

(%)

1

97.0 142.2 421.3 114.6 458.9 256.5 220.7 311.5 125.8 72.4 339.4 311.7 279.1 411.5 378.1 181.7

Avg. annual wages, 

all sectors 2015 ($)2 44,119 54,410 44,814 36,858 42,710 33,935 53,989 58,176 44,193 36,814 37,576 41,229 52,833 51,482 50,438 52,937

Avg. annual wages, 

mining (except oil & 

gas), 2015 ($)2

76,564 79,780 82,172 N/A 48,151 74,122 86,435 84,652 N/A N/A N/A N/A 100,587 N/A 85,693 74,695

Coal wages/all 

wages (%)

173.5 146.6 183.4 N/A 112.7 218.4 160.1 145.5 N/A N/A N/A N/A 190.4 N/A 169.9 141.1

Receiving transfer 

payments (2014) 

(%)

3

24.5 16.4 10.7 32.4 15.3 23.2 8.4 9.9 26.1 20.5 40.3 25.3 11.9 13.3 11.6 17.2

N/A: information not disclosed for the region

Information represents the most recent data available from the following sources:

1. Bureau of Economic Analysis 2015137

2. Bureau of Labor Statistics 2016138

3. Bureau of Economic Analysis 2015139

 

137 Bureau of Economic Analysis, Regional Economic Accounts 2015; from Economic Profile System (EPS) Summary Profile, p. 2. Headwater Economics EPS 

tool available at: https://headwaterseconomics.org/tools/economic-profile-system/about/ 

138 Bureau of Labor Statistics, Quarterly Census of Employment and Wages, 2016; from EPS Mining Profile. p. 5. Headwater Economics EPS tool available at: 

https://headwaterseconomics.org/tools/economic-profile-system/about/ 

139 Bureau of Economic Analysis, Regional Economic Accounts, 2015; from EPS, Non-Labor Income Report. p. 1. Headwater Economics EPS tool available at: 

https://headwaterseconomics.org/tools/economic-profile-system/about/ 
5. Federal Coal Leasing Program 

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Table 5-5 presents coal mine employment in 2014 and 2015 and total 

employment in 2014 for each region. The Appalachian and Interior regions 

accounted for about 80 percent of the total coal employment across all the 

regions. The proportion of employment associated with coal varies across 

regions and was highest in the Montana MP and Wyoming WL regions. While 

these data provide a useful overview of where coal employment exists, the role 

of coal employment may be more significant at local levels. The subsequent 

section explores this point. 

Figure 5-7 displays coal mine employment trends between 2000 and 2015 for 

the three broad supply regions. This figure demonstrates that the larger 

downward trend in employment beginning around 2011 has been driven 

primarily by coal employment reductions in the Appalachian region. 

Table 5-5

Coal Mine Employment by Supply Region

Coal Mine 

Employment, 

20151

Coal Mine 

Employment, 

20141

Total 

Employment, 

20142

Percent Coal 

Employment, 

2014

Appalachian 39,471 46,891 6,235,437 0.8

Interior 14,636 16,073 13,167,982 0.1

CG 909 926 35347 2.6

CR 15 24 7764 0.3

CU 575 724 175592 0.4

UT 1,308 1,413 70,377 2.0

ME 12 12 9864 0.1

ND 1,313 1,292 285,040 0.5

MP 1,317 1,306 14,255 9.2

MT 0 0 109,350 0.0

AZ 403 387 40585 1.0

NM 1,133 1,175 93,120 1.3

WG 1,026 1,021 53,626 1.9

WH 611 569 9,583 5.9

WL 5,016 5,039 60,366 8.3

Information represents the most recent data available from the following sources:

1. MSHA. 2016140. 

2. Bureau of Economic Analysis. 2015141

 

140 MSHA (United States Department of Labor Mine Safety Health Administration). 2016. Coal Mine and 

Employment Data. Accessed September 2016. Available at 

http://arlweb.msha.gov/OpenGovernmentData/OGIMSHA.asp. 

141 Bureau of Economic Analysis. 2015. A25N: Total Full-Time and Part-Time Employment by NAICS Industry. 

Available at https://www.bea.gov/itable/index.cfm 
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Figure 5-7. Coal Mine Employment, 2000 – 2015 by Supply Region 

Source: MSHA 2016142

County-level Socioeconomic Variability 

The previous section provides an aggregate view of broad coal-producing 

regions. Assessing the likely effects on counties and communities from changes 

to coal leasing policy requires some recognition of their economic and 

demographic variability. A contrast of three coal-producing counties reveals 

some of the relevant variation (see Table 5-6). These counties include: 

 Boone County, WV. With some of the highest production in West 

Virginia, this county exemplifies the coal conditions of Appalachia, 

dominated by private mineral holdings.143

 Campbell County, WY. In the Powder River Basin, this county has 

the highest coal production in Wyoming.144

 

142 MSHA (United States Department of Labor Mine Safety Health Administration). 2016. Coal Mine and 

Employment Data. Accessed September 2016. Available at 

http://arlweb.msha.gov/OpenGovernmentData/OGIMSHA.asp. 

143 US EIA. 2014. Annual Coal Report 2014, Table 2. Coal Production and Number of Mines by State, County, and 

Mine Type, 2014. November 3, 2016. Available at http://www.eia.gov/coal/annual/pdf/table2.pdf 

144 US EIA. 2014. Annual Coal Report 2014, Table 2. Coal Production and Number of Mines by State, County, and 

Mine Type, 2014. November 3, 2016. Available at http://www.eia.gov/coal/annual/pdf/table2.pdf 
5. Federal Coal Leasing Program 

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Table 5-6

County Comparison Table

Boone 

Co., WV

Campbell 

Co., WY

Delta Co., 

CO

Population change, 1970 – 20141 -5.8% 270.3% 95.3%

Employment change, 1970 – 20141 34.5% 459.9% 155.5%

Personal income change, 1970 – 20141 59.1% 739.9% 244.8%

Coal / total employment 20142 29.2% 14.9% 2.4%

Ratio 2016 / 2000 coal employment (2000 =100%)

2 34.8% 136.2% 47.6%

Average annual wages, all sectors, 20153 $45,905 $57,426 $33,178

Average annual wages, mining (except oil & gas), 20153 $79,239 $85,936 $73,1814

Coal wages / all wages 173% 150% 221%

Bachelor degree or higher, 2010-20145 9.1% 19.2% 18.9%

Receiving transfer payments (2014)6 34.1% 9.0% 25.4%

Information represents the most recent data available from the below sources

1. Bureau of Economic Analysis 2015145

2. Bureau of Economic Analysis 2014146

3. Bureau of Labor Statistics 2016147

4. For Delta County, data for mining wages (except oil and gas) is not available; overall mining wages are shown. 

5. Census Bureau148

6. Bureau of Economic Analysis. 2015149

 Delta County, CO. On the Gunnison River’s North Fork, this 

county has a relatively more diverse economic base, but coal jobs 

remain important. 

Since 2000, the level of coal sector employment in the three counties has 

diverged (see Figure 5-8). In 2015, Campbell County coal employment was 157 

percent of the employment of 2000. Delta County, after doubling the 2000 

employment level in 2013, by 2015 had declined to 104 percent of its 2000 level, 

while in Boone County’s coal sector employment stood at 66 percent of its 

earlier level. While the statistics are abstractions, local examples better convey 

the extent of the decline. From a 2016 news story in Delta County, Colorado: 

 

145 Bureau of Economic Analysis. 2015. Regional Economic Accounts 2015. From Economic Profile System (EPS) 

Summary Profile, p. 2. Headwater Economics EPS tool available at: 

https://headwaterseconomics.org/tools/economic-profile-system/about/ 

146 Bureau of Economic Analysis. 2014. GDP & Personal Income Regional Data, 1970-2014. 

http://www.bea.gov/itable/iTable.cfm?ReqID=70&step=1#reqid=70&step=27&isuri=1&7022=49&7023=7&7024=no

n-industry&7025=4&7026=08029&7001=749&7028=-1&7083=levels&7029=49&7090=70&7031=08000. United 

States Department of Labor, Employment/Production Data Set (Yearly). 

147 Bureau of Labor Statistics.2016. Quarterly Census of Employment and Wages. From EPS Mining Profile, p. 5. 

Headwater Economics EPS tool available at: https://headwaterseconomics.org/tools/economic-profilesystem/about/ 

148 Census Bureau. 2016. Quick Facts. Available at 

http://www.census.gov/quickfacts/table/PST045215/08029,56005,54005,00 

149 Bureau of Economic Analysis. 2015, Regional Economic Accounts. From EPS Non-Labor Income Report, p. 1. 

Headwater Economics EPS tool available at: https://headwaterseconomics.org/tools/economic-profilesystem/about/ 
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Figure 5-8. Change in Coal Employment 

Sources: 

MSHA. 2016150

Bureau of Economic Analysis. 2014151

“Bowie Resource Partners said Friday that depressed coal prices have forced it 

to idle the Bowie #2 Mine near Paonia in the latest mine closure to hit 

Colorado’s Western Slope. BRP, through its subsidiary Bowie Resources LLC, 

employed 108 full-time workers and one contractor at the facility. The closure 

is another big economic blow to Delta County, whose coal industry 

employment has dropped from 1,200 positions to less than 400 since 2013. That 

doesn’t include the hundreds of support jobs in fields like construction and 

logging that helped keep the county’s mines running. ‘The coal mines are very 

 

150 MSHA (United States Department of Labor Mine Safety Health Administration). 2016. Employment/Production 

Data Set (Yearly). Available at http://arlweb.msha.gov/OpenGovernmentData/OGIMSHA.asp. 

151 Bureau of Economic Analysis. 2014, GDP & Personal Income Regional Data, 1970-2014. Available at 

http://www.bea.gov/itable/iTable.cfm?ReqID=70&step=1#reqid=70&step=27&isuri=1&7022=49&7023=7&7024=no

n-industry&7025=4&7026=08029&7001=749&7028=-1&7083=levels&7029=49&7090=70&7031=08000. 
5. Federal Coal Leasing Program 

January 2017 Federal Coal Program Programmatic EIS 5-45

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critical to the economy of Delta County. We have lost two-thirds of those jobs 

in the last three years,’ said Robbie LeValley, Delta County administrator.”152 

The loss of coal jobs can have an outsized effect on communities, because the 

coal industry pays far higher than average wages. In the three counties, average 

coal wages were between 150 percent and 221 percent of average wages in all 

sectors. The proportion of jobs provided by mining, in contrast, varies greatly 

across the three counties, ranging from nearly 30 percent in Boone County in 

2014 to less than 3 percent in Delta County. 

Industries Related to Coal Production 

Beyond the local economic activity directly supported by coal operations (e.g., 

employment at coal operations), additional economic activity, including 

secondary or multiplier effects and upstream effects (e.g., economic activity 

associated with the sale of coal such as rail transportation and electricity 

generation), can be linked to coal operations. Multiplier effects arise from the 

fact that local businesses, households, and governmental agencies purchase 

goods and services from one another. These effects include indirect impacts 

(economic activity affected by sectors that supply inputs to coal operations) and 

induced impacts (economic activity affected by income expenditures, such as 

expenditures on groceries or housing of employees in both the coal sector and 

supplying sectors).153

The magnitude of multiplier and upstream economic effects varies by region. A 

February 2015 study by the University of Wyoming’s Center for Energy 

Economics and Public Policy estimated these additional economic effects for 

Wyoming.154 The study found that, in 2012, for every coal mining operation job 

in Wyoming, an additional 1.32 jobs were supported in Wyoming as a result of 

indirect and induced economic effects. Rail and electric generation associated 

with coal supported an additional 7,105 jobs in Wyoming (including indirect and 

induced economic effects). This upstream employment represented 

approximate 30 percent of the “total coal economy” in Wyoming.

The Utah Governor’s Office of Energy Development commissioned a similar 

analysis focused on multiplier effects and found that for every coal mining 

operation job in Utah, an additional 1.21 jobs were supported in Utah as a result 

 

152 Svaldi, A. 2016. “Delta County Loses Another Big Coal Mine with Closure of Bowie #2”. The Denver Post. 

February 26, 2016. Available at: http://www.denverpost.com/2016/02/26/delta-county-loses-another-big-coal-minewith-closure-of-bowie-2/

153 Leontief, W. W. 1986. Input-Output Economics. 2nd ed., New York: Oxford University Press. 

154 Godby, R., R. Coupal, D. Taylor, and T. Considine. 2015. The Impact of the Coal Economy on Wyoming. 

University of Wyoming, Center for Energy Economics and Public Policy. Prepared for the Wyoming Infrastructure 

Authority. February 2015. Available at: http://www.uwyo.edu/cee/_files/docs/wia_coal_full-report.pdf
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of indirect and induced economic effects.155 An economic study of coal in 

Colorado concluded that, in 2012, about 1.44 indirect and induced jobs were 

supported for every coal sector job in Colorado as a whole, and 1.04 indirect 

and induced jobs in northwest Colorado for every northwest Colorado coal 

mining job.156 

5.7.2 Externalities Associated with Coal 

An externality is defined as a side effect or consequence of an industrial or 

commercial activity that affects other parties without this being reflected in the 

cost of the goods or services. There are a number of externalities cited in 

conjunction with coal production, transportation, and consumption.157,158,159

Environmental, social, and economic values that can be particularly vulnerable 

near coal-fired power plants or along coal transportation networks include 

those related to air quality, water quality, noise, and wildlife populations. 

Ecosystem services associated with these values provide many market and 

nonmarket benefits. While the costs of these externalities may not be fully 

reflected in the fiscal terms of Federal coal leases, it is important to note that 

there are a number of Federal, state, and local laws and regulations that control 

such impacts. 

Coal mining can produce several production-related externalities, including the 

emission of greenhouse gases; air and water pollution, including associated 

negative health effects; and water use. Methane, a potent greenhouse gas, is 

released when gases trapped in coal seams are released when they are cut to 

extract coal. Running equipment (drills, bulldozers, and trucks) causes 

additional types of air pollution, in addition to greenhouse gas emissions, 

particularly criteria pollutants (i.e., carbon monoxide, lead, ground-level ozone, 

particulate matter, nitrogen dioxide, and sulfur dioxide). Coal mining can affect 

water quality and, thus, human health, livestock, fishing stocks, and aquatic 

species. In addition, coal mining can use a significant amount of water for dust 

 

155 Utah Governor’s Office of Energy Development. 2015. Energy and Energy-related Mining in Utah, An Economic 

and Fiscal Assessment. May 2015. Available at Energy and Energy-related Mining in Utah, An Economic and Fiscal 

Assessment. 

156 Hovarth, G. 2014. Measurement of Economic Activity for Coal Industry and Electrical Power Generation 

Industry in the Yampa-White River Region of Northwest Colorado. Funding provided by the Economic 

Development Council of Colorado. Prepared for the Craig/Moffat Economic Development Partnership, Rio Blanco 

County, and Steamboat Springs Economic Development Council. Available at http://cber.co/wpcontent/uploads/2014/05/Economic-Impact-of-Coal-Industry-in-the-Yampa-White-River-Region-of-Colorado.pdf 

157 For review of externalities associated with coal production, see Hein, J. F., and P. Howard. 2015. “Illuminating 

the Hidden Costs of Coal: How the Interior Department Can Use Economic Tools to Modernize the Federal Coal 

Program”. Institute for Policy Integrity. New York University School of Law. December 2015. Available at 

http://policyintegrity.org/files/publications/Hidden_Costs_of_Coal.pdf 

158 Epstein, P. R. et al. 2011. “Full cost accounting for the life cycle of coal”. Ann. N.Y. Acad. Sci. 1219(2011):73-98. 

Available at http://www.chgeharvard.org/sites/default/files/epstein_full%20cost%20of%20coal.pdf 

159 Lashof, D. 2007. Coal in a Changing Climate. Natural Resources Defense Council (NRDC). NRDC Issue Paper. 

February 2007. Available at https://www.nrdc.org/sites/default/files/coalclimate.pdf 
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control, extraction (i.e., to cool equipment and prevent fire), and processing 

(e.g., coal washing). 

The transportation of coal requires large amounts of energy and includes some 

risks. According to a study by the Institute for Policy Integrity at New York 

University, in the United States, coal companies transport 70 percent of their 

product by rail, approximately 10 percent by truck, 10 percent or more by 

waterways, and the rest using a variety of means including conveyor belts and 

slurry pipelines.160 Transportation of coal can result in multiple externalities, 

including increased risk to public health through accidents and air pollution, 

emission of greenhouse gases, and noise. 

The combustion of coal can contribute to air quality externalities, as the burning 

of coal results in emissions of nitrogen oxides, sulfur dioxide, the particulates 

PM10 and PM2.5, and mercury, all of which can affect air quality and public 

health.161 Importantly, the greenhouse gas emissions associated with coal 

consumption contribute to global climate change.162 According to the National 

Research Council, ‘‘Emissions of CO2 from the burning of fossil fuels have 

ushered in a new epoch where human activities will largely determine the 

evolution of Earth’s climate. Because CO2 in the atmosphere is long lived, it can 

effectively lock Earth and future generations into a range of impacts, some of 

which could become very severe. Therefore, emission reduction choices made

today matter in determining impacts experienced not just over the next few 

decades, but in the coming centuries and millennia.’’163

In 2009, based on a large body of robust and compelling scientific evidence, the 

EPA Administrator issued the Endangerment Finding under CAA section 

202(a)(1).164 In the Endangerment Finding, the Administrator found that the 

current, elevated concentrations of greenhouse gases in the atmosphere—

already at levels unprecedented in human history—may reasonably be 

anticipated to endanger public health and welfare of current and future 

generations in the United States. We summarize these adverse effects on public 

health and welfare briefly here. 

 

160 Hein, J. F., and P. Howard. 2015. “Illuminating the Hidden Costs of Coal: How the Interior Department Can 

Use Economic Tools to Modernize the Federal Coal Program”. Institute for Policy Integrity. New York University 

School of Law. December 2015. Available at http://policyintegrity.org/files/publications/Hidden_Costs_of_Coal.pdf 

161 Lashof, D. 2007. Coal in a Changing Climate. Natural Resources Defense Council (NRDC). NRDC Issue Paper. 

February 2007. Available at https://www.nrdc.org/sites/default/files/coalclimate.pdf 

162 US EPA. 2016. Climate Change: Basic Information. Available at https://www.epa.gov/climatechange/climatechange- basic-information 

163 National Research Council. 2011. Climate Stabilization Targets. Missions, Concentrations, and Impacts over 

Decades to Millennia. p. 3. Available at https://www.nap.edu/catalog/12877/climate-stabilization-targets-emissionsconcentrations-and-impacts-over-decades-to

164 US EPA. 2009. Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of 

the Clean Air Act. Final Rule. 74 FR 66496. December 15, 2009. Available at https://www.gpo.gov/fdsys/pkg/FR2009-12-15/pdf/E9-29537.pdf 
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Public Health Impacts 

Climate change caused by human emissions of greenhouse gases threatens the 

health of Americans in multiple ways. By raising average temperatures, climate 

change increases the likelihood of heat waves, which are associated with 

increased deaths and illnesses. While climate change also increases the 

likelihood of reductions in cold-related mortality, evidence indicates that the 

increases in heat mortality will be larger than the decreases in cold mortality in 

the United States. Compared with a future without climate change, climate 

change is expected to increase ozone pollution over broad areas of the United 

States, especially on the highest ozone days and in the largest metropolitan 

areas with the worst ozone problems, and thereby increase the risk of 

morbidity and mortality. Climate change is also expected to cause more intense 

hurricanes and more frequent and intense storms and heavy precipitation, with 

impacts on other areas of public health, such as the potential for increased 

deaths, injuries, infectious and waterborne diseases, and stress-related 

disorders. Children, the elderly, and the poor are among the most vulnerable to 

these climate-related health effects. 

Public Welfare Impacts 

Climate change impacts touch nearly every aspect of public welfare. Among the 

multiple threats caused by human emissions of greenhouse gases, climate 

changes are expected to place large areas of the country at serious risk of 

reduced water supplies, increased water pollution, and increased occurrence of 

extreme events such as floods and droughts. Coastal areas are expected to face 

a multitude of increased risks, particularly from rising sea level and increases in 

the severity of storms. These communities face storm and flooding damage to 

property, or even loss of land due to inundation, erosion, wetland submergence, 

and habitat loss. 

Impacts of climate change on public welfare also include threats to social and 

ecosystem services. Climate change is expected to result in an increase in peak 

electricity demand. Extreme weather from climate change threatens energy, 

transportation, and water resource infrastructure. Climate change may also 

exacerbate ongoing environmental pressures in certain settlements, particularly 

in Alaskan indigenous communities, and is very likely to fundamentally rearrange 

US ecosystems over the 21st century. Though some benefits may balance 

adverse effects on agriculture and forestry in the next few decades, the body of 

evidence points toward increasing risks of net adverse impacts on US food 

production, agriculture, and forest productivity as temperature continues to 

rise. These impacts are global and may exacerbate problems outside the United 

States that raise humanitarian, trade, and national security issues for the United 

States. 

New Scientific Assessments and Observations 

Since the administrative record concerning the Endangerment Finding closed 

following the EPA’s 2010 Reconsideration Denial, climate change impacts have 
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continued to intensify, with new records being set for a number of climate 

indicators, such as global average surface temperatures, Arctic sea ice retreat, 

CO2 concentrations, and sea level rise. Additionally, a number of major scientific 

assessments have been released that further improve understanding of the 

climate system and further strengthen the case that greenhouse gases endanger 

public health and welfare both for current and future generations. These 

assessments from the Intergovernmental Panel on Climate Change (IPCC), the 

US Global Change Research Program, and the National Research Council 

(NRC) include: 

 IPCC’s 2012 Special Report on Managing the Risks of Extreme 

Events and Disasters to Advance Climate Change Adaptation and 

the 2013–2014 Fifth Assessment Report (AR5) 

 The US Global Change Research Program 2014 National Climate 

Assessment, Climate Change Impacts in the United States (NCA3) 

 The NRC’s 2010 Ocean Acidification: A National Strategy to Meet the 

Challenges of a Changing Ocean (Ocean Acidification); 2011 Report on 

Climate Stabilization Targets: Emissions, Concentrations, and Impacts 

over Decades to Millennia (Climate Stabilization Targets); 2011 

National Security Implications for US Naval Forces (National Security 

Implications); 2011 Understanding Earth’s Deep Past: Lessons for Our 

Climate Future (Understanding Earth’s Deep Past); 2012 Sea Level 

Rise for the Coasts of California, Oregon, and Washington: Past, Present, 

and Future; 2012 Climate and Social Stress: Implications for Security 

Analysis (Climate and Social Stress); and 2013 Abrupt Impacts of 

Climate Change (Abrupt Impacts) assessments. 

The findings of the recent scientific assessments confirm and further strengthen 

the conclusion that greenhouse gases endanger public health, now and in the 

future. The NCA3 indicates that human health in the United States will be 

impacted by ‘‘increased extreme weather events, wildfire, decreased air quality, 

threats to mental health, and illnesses transmitted by food, water, and diseasecarriers such as mosquitoes and ticks.’’ The most recent assessments now have 

greater confidence that climate change will influence production of pollen that 

exacerbates asthma and other allergic respiratory diseases such as allergic 

rhinitis, as well as effects on conjunctivitis and dermatitis. Both the NCA3 and 

the IPCC AR5 found that increasing temperature has lengthened the allergenic 

pollen season for ragweed, and that increased CO2 by itself can elevate 

production of plant-based allergens. 

The NCA3 also concludes that children’s unique physiology and developing 

bodies contribute to making them particularly vulnerable to climate change. 

Impacts on children are expected from heat waves, air pollution, infectious and 

waterborne illnesses, and mental health effects resulting from extreme weather 

events. The IPCC AR5 indicates that children are among those especially 
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susceptible to most allergic diseases, as well as health effects associated with 

heat waves, storms, and floods. The IPCC finds that additional health concerns 

may arise in low-income households, especially those with children, if climate 

change reduces food availability and increases prices, leading to food insecurity 

within households. 

Both the NCA3 and IPCC AR5 conclude that climate change will increase health 

risks facing the elderly. Older people are at much higher risk of mortality during 

extreme heat events. Pre-existing health conditions also make older adults 

susceptible to cardiac and respiratory impacts of air pollution and to more 

severe consequences from infectious and waterborne diseases. Limited mobility 

among older adults can also increase health risks associated with extreme 

weather and floods. 

The new assessments also confirm and further strengthen the conclusion that 

greenhouse gases endanger public welfare, and emphasize the urgency of 

reducing greenhouse gas emissions due to their projections that show 

greenhouse gas concentrations climbing to ever-increasing levels in the absence 

of mitigation. The NRC assessment Understanding Earth’s Deep Past projected 

that, without a reduction in emissions, CO2 concentrations by the end of the 

century would increase to levels that the Earth has not experienced for more 

than 30 million years.165 In fact, that assessment stated that ‘‘the magnitude and 

rate of the present greenhouse gas increase place the climate system in what 

could be one of the most severe increases in radiative forcing of the global 

climate system in Earth history.’’166 Because of these unprecedented changes, 

several assessments state that we may be approaching critical, poorly 

understood thresholds. As stated in the assessment, ‘‘As Earth continues to 

warm, it may be approaching a critical climate threshold beyond which rapid and 

potentially permanent—at least on a human timescale—changes not anticipated 

by climate models tuned to modern conditions may occur.’’ 

The NRC Abrupt Impacts report analyzed abrupt climate change in the physical 

climate system and abrupt impacts of ongoing changes that, when thresholds are 

crossed, can cause abrupt impacts for society and ecosystems. The report 

considered destabilization of the West Antarctic Ice Sheet (which could cause 

3–4 meters (9-12 feet) of potential sea level rise) as an abrupt climate impact 

with unknown but probably low probability of occurring this century. The 

report categorized a decrease in ocean oxygen content (with attendant threats 

to aerobic marine life); increase in intensity, frequency, and duration of heat 

waves; and increase in frequency and intensity of extreme precipitation events 

(droughts, floods, hurricanes, and major storms) as climate impacts with 

moderate risk of an abrupt change within this century. 

 

165 National Research Council. 2011. Understanding Earth’s Deep Past. Lessons for Our Climate Future. p.1. Available at 

https://www.nap.edu/catalog/13111/understanding-earths-deep-past-lessons-for-our-climate-future 

166 Ibid., p.138. 
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The NRC Abrupt Impacts report also analyzed the threat of rapid state changes 

in ecosystems and species extinctions as examples of an irreversible impact that 

are expected to be exacerbated by climate change. Species at most risk include 

those whose migration potential is limited, whether because they live on 

mountaintops or fragmented habitats with barriers to movement, or because 

climatic conditions are changing more rapidly than the species can move or 

adapt. While the NRC determined that it is not presently possible to place 

exact probabilities on the added contribution of climate change to extinction, 

they did find that there was substantial risk that impacts from climate change 

could, within a few decades, drop the populations in many species below 

sustainable levels, thereby committing the species to extinction. Species within 

tropical and subtropical rainforests, such as the Amazon, and species living in 

coral reef ecosystems were identified by the NRC as being particularly 

vulnerable to extinction over the next 30 to 80 years, as were species in highlatitude and high-elevation regions. 

Since the 2009 Endangerment Finding, the USGCRP NCA3, and multiple NRC 

assessments have projected future rates of sea level rise that are 40 percent 

larger to more than twice as large as the previous estimates from the 2007 

IPCC 4th Assessment Report due in part to improved understanding of the 

future rate of melt of the Antarctic and Greenland Ice sheets. These 

assessments continue to recognize that there is uncertainty inherent in 

accounting for ice sheet processes. Additionally, local sea level rise can differ 

from the global total depending on various factors. The east coast of the US in 

particular is expected to see higher rates of sea level rise than the global 

average. The NCA3 states that ‘‘five million Americans and hundreds of billions 

of dollars of property are located in areas that are less than four feet above the 

local high-tide level,’’ and the NCA3 finds that ‘‘[c]oastal infrastructure, including 

roads, rail lines, energy infrastructure, airports, port facilities, and military bases, 

are increasingly at risk from sea level rise and damaging storm surges.’’167

Events outside the US, as also pointed out in the 2009 Endangerment Finding, 

will also have relevant consequences. The NRC Climate and Social Stress 

assessment concluded that it is prudent to expect that some climate events ‘‘will 

produce consequences that exceed the capacity of the affected societies or 

global systems to manage and that have global security implications serious 

enough to compel international response.’’ The NRC National Security 

Implications assessment recommends preparing for increased needs for 

humanitarian aid; responding to the effects of climate change in geopolitical 

hotspots, including possible mass migrations; and addressing changing security 

needs in the Arctic as sea ice retreats. 

 

167 Melillo, J. M., T. Richmond, and G. W. Yohe, Eds. 2014. Climate Change Impacts in the United States: The Third 

National Climate Assessment. US Global Change Research Program, p. 9. Available at 

http://www.globalchange.gov/browse/reports/climate-change-impacts-united-states-third-national-climateassessment-0 
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These assessments and observed changes make it clear that reducing emissions 

of greenhouse gases across the globe is necessary in order to avoid the worst 

impacts of climate change, and underscore the urgency of reducing emissions 

now. Moreover, due to the time lags inherent in the Earth’s climate, the NRC 

Climate Stabilization Targets assessment notes that the full warming from any 

given concentration of CO2 reached will not be fully realized for several 

centuries, underscoring that emission activities today carry with them climate 

commitments far into the future. 

5.7.3 Fiscal Implications of Coal 

Federal, state, and local governments collect revenues from coal operations 

through various taxes, fees, and royalties. This section summarizes the revenue 

mechanisms and describes how revenues are disbursed. 

Revenue and Disbursement Associated with Federal Royalties, Bonus Bids, 

and Rents 

The Federal government receives revenue from coal leasing in three ways: 

 Bonus bids 

 Rental fees 

 Production royalties 

These revenues are collected and disbursed by the ONRR. In addition to these 

three channels, the ONRR also collects and tracks “other revenues” that 

consist of advance royalty payments, minimum royalty payments, estimated 

royalty payments, settlement agreements, and interest. Over the last 10 years, 

average annual revenues from coal leasing have amounted to slightly more than 

$1 billion, representing approximately one-quarter of all revenues associated 

with onshore Federal minerals collected by the ONRR. Table 5-7, below, 

shows the revenues collected from coal in fiscal year 2015 associated with 

Federal coal leases by state, as well as the 10-year average by state and revenue 

type. 

Over the last 10 years, almost 90 percent of total revenues collected from coal 

leases originated in Wyoming. Rent and other revenues generally represent a 

small proportion of overall revenue with less than 5 percent in any state and 

less than 0.5 percent of the national total. Bonus bids (36 percent) and royalties 

(63.6 percent) make up the greatest percentage of overall revenues from coal 

leasing.168

 

168 Bonus bids actually make up a relatively small proportion of the total revenue by state (less than 10 percent) 

with the exception of Wyoming. On average, bonus bids have represented about 40 percent of revenues from 

leases in Wyoming. 
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Table 5-7

Summary of Federal Revenues Associated with Coal Leases

State

Fiscal Year 

2015

Total

10-year Average

Bonus Other 

Revenues Rent Royalties Total

Alabama $87,791 $25,645 -$102,705 $12,120 $3,810,903 $3,745,963

Colorado $45,946,041 $2,799,763 $307,583 $183,152 $47,004,798 $50,295,297

Kentucky $158,280 $52,935 $10,200 $15,923 $1,110,040 $1,189,098

Montana $43,259,597 $3,489,852 $2,137,707 $130,007 $38,823,202 $44,580,768

Oklahoma $825,481 $80,999 $2,655 $36,382 $723,083 $843,118

North 

Dakota

$3,483,815 $64,906 $0 $33,176 $1,244,067 $1,342,149

Utah $34,545,089 $1,338,104 $98,931 $225,425 $28,753,933 $30,416,393

Wyoming $987,724,580 $372,599,892 $842,377 $555,832 $550,402,368 $924,400,469

Total $1,116,030,675 $380,452,096 $3,296,747 $1,192,017 $671,872,395 $1,056,813,255

Source: ONRR 2016

The Mineral Leasing Act specifies that 50 percent of Federal revenues from 

leasable minerals (including coal) are paid to the US Treasury (40 percent 

appropriated to the Reclamation Fund and 10 percent to the General Fund), and 

50 percent are paid “to the State within the boundaries of which the leased land 

is located or the deposits were derived” (30 USC, Subsection 191[a]). The Act 

further states that “[i]n determining the amount of payments to the 

States...beginning in fiscal year 2014 and for each year thereafter, the amount of 

such payments shall be reduced by 2 percent for any administrative or other 

costs incurred by the United States in carrying out the program authorized by 

this chapter, and the amount of such reduction shall be deposited to 

miscellaneous receipts of the Treasury” (30 USC, Subsection 191[b]). Thus, 

States effectively receive 49 percent of the revenues collected on leases within 

their state. The Act also recommends that “the legislature of the State may 

direct giving priority to those subdivisions of the State socially or economically 

impacted by development of minerals leased under this Act, for (i) planning, (ii) 

construction and maintenance of public facilities, and (iii) provision of public 

service” (30 USC, Subsection 191[a]). Given this recommendation, states have 

broad discretion in using these funds, and each state distributes them differently. 

For example, Wyoming distributes mineral royalty and bonus payments to a 

range of funds, including the School Foundation Fund, School Construction 

Fund, Highway Fund, General Fund, and Budget Reserve Account. Portions of 

these payments are also distributed directly to cities and towns; cities, counties, 

and special districts capital construction; the community college commission; 

and the University of Wyoming. Table 5-8, below, summarizes the distribution 

of payments in Wyoming in fiscal year 2015 for payments associated with all 

Federal mineral leases (including coal). Based on the current level of revenues 

generated from coal leases, approximately 60 percent of the total distribution 

could be attributed to coal. 
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Table 5-8

State of Wyoming's Distribution of Federal Mineral Revenues

Funds / Recipient Fiscal Year 2015

Cities & Towns $18,562,500

Cities, Counties & Special Districts Capital Const. $13,050,000

Foundation Fund $251,827,747

School Capital Construction $215,609,844

School Districts – Grants $5,346,000

Highway Fund / State Roads $66,472,500

1% General Fund $2,000,000

University of Wyoming $13,365,000

Community College Commission $1,600,000

Budget Reserve Account $326,149,640

Total $913,983,231

Source: Wyoming State Treasurer's 2015 Report (p. 52)

Funds distributed directly to cities and towns are generally based on population. 

The funds allocated to cities, counties, and the special districts capital 

construction account allow for grants or loans to district construction projects 

when specific circumstances are met. As shown in the table, a substantial 

proportion of the funds are allocated to schools. The Foundation Fund is a 

major revenue source to the Wyoming’s Department of Education’s annual 

budget and supports K-12 funding throughout the state.

Other Federal Taxes and Fees Associated with Coal Production 

In addition to Federal revenues in the form of royalties, rents, and bonus bids, 

all coal mining operations are subject to: 

 A per ton reclamation fee established by SMCRA, as amended 

 The Black Lung Excise Tax enacted under Black Lung Benefits 

Revenue Act of 1977 

Reclamation Fee 

Title IV of the SMCRA established an Abandoned Mine Reclamation Fund 

(Fund)169 that is administered by OSMRE. The primary source of revenue for 

the Fund is a reclamation fee paid by operators of coal mining operations. 

Currently, the fees are $0.28 per ton of non-lignite coal produced by surface 

coal mining and $0.12 per ton of non-lignite coal produced by underground 

mining or 10 percent of the value of the coal at the mine, whichever is less. The 

fee for lignite coal is 8 cents per ton or 2 percent of the value of the coal at the 

mine, whichever is less. SMCRA specifies how the collected funds are used, 

including “reclamation and restoration of land and water resources adversely 

affected by past coal mining” and grants to states to accomplish the purposes of 

Title IV (30 USC, Subsection 1231[c]). 

 

169 30 USC, Section 1232
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In addition, interest is earned on the Fund, which is used to make transfers to 

three health care plans that are part of the United Mine Workers of America 

Health and Retirement Fund (30 USC, Subsection 1231[e]). Since SMCRA’s 

enactment in 1977, the OSMRE has collected over $10.5 billion in fees and 

distributed more than $8.0 billion for grants to states and tribes, transfers to 

the health care plans, and its own operation of the national program to reclaim 

land and waters damaged by coal mining before SMCRA’s passage.170 In fiscal 

year 2015, OSMRE collected about $195 million in fees, and the average 

between fiscal year 2011 and fiscal year 2015 was just over $220 million 

annually.171 

Black Lung Excise Tax 

The Black Lung Excise Tax became effective in 1978 with the passage of the 

Black Lung Benefits Reform Act that enacted the Black Lung Disability Trust 

Fund. The departments of Labor, Treasury, and Health and Human Services 

jointly administer the fund. Currently, the excise tax is $1.10 per ton on 

underground-mined coal and $0.55 cents per ton on surface-mined coal, in 

either case not to exceed 4.4 percent of the sale price.172 Between 2009 and 

2014, the average annual collections from this excise tax were approximately 

$595 million.173 The Department of Labor’s Division of Coal Mine Workers' 

Compensation administers the Black Lung Program and uses funds to 

compensate “coal miners who are totally disabled by pneumoconiosis arising 

out of coal mine employment, and to survivors of coal miners whose deaths are 

attributable to the disease” and provide “eligible miners with medical coverage 

for the treatment of lung diseases related to pneumoconiosis.”174

State and Local Taxes and Fees Associated with Coal Production and 

Operations 

State and local governments collect revenues from coal mining operations 

through a variety of channels. This section provides an overview of these 

revenue streams. 

Severance Taxes 

Many states collect severance taxes from the production of non-renewable 

mineral resources, regardless of the surface land owner. Severance tax rates 

vary by state and can be based on value or volume. Not all states collect 

 

170 Office of Surface Mining Reclamation and Enforcement. 2016. Reclaiming Abandoned Mine Lands. Available at: 

http://www.osmre.gov/programs/AML.shtm 

171 Office of Surface Mining Reclamation and Enforcement. 2016. Grant Distribution. Available at: 

http://www.osmre.gov/resources/grants.shtm 

172 Department of Labor. 2016. Fiscal year 2016 Detailed Budget Documentation - Black Lung Disability Trust 

Fund. Available at: https://www.dol.gov/general/budget/index-2016 

173 Internal Revenue Service. 2016. Federal Excise Taxes Reported to or Collected by the Internal Revenue Service, 

Alcohol and Tobacco Tax and Trade Bureau, and Customs Service, by Type of Excise Tax. November 22, 2016. 

Available at: https://www.irs.gov/uac/soi-tax-stats-historical-table-20

174 Department of Labor. 2016. About the Black Lung Program. Available at: https://www.dol.gov/owcp/dcmwc/. 
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severance taxes, and, for those that do, the approach and level of the severance 

tax rate varies widely. Many of the states allow for some deductions and 

exceptions on severance taxes. Along with variation in the collection of 

severance taxes, the distribution of these revenues to state and local funds 

varies widely. 

Taxes on Production and Property 

In addition to severance taxes, many states collect tax revenues based on the 

value of coal produced in a given year, or the value of the real and personal 

property of coal operations. 

An ad valorem tax is one based on the monetary value of an item, including 

property. States that have an ad valorem tax on coal production may refer to 

the tax as a gross products or gross proceeds tax, based on the total value of 

the item. Property taxes are ad valorem taxes applied to real and personal 

property. Real property generally refers to fixed property, such as land and 

buildings (e.g., the land in which a coal mining operation is located and any fixed 

structures). Personal property typically refers to property that can be moved, 

such as most equipment and vehicles used in the mining process. It is important 

to note that Federal land is exempt from real property tax. However, any 

improvements on Federal lands associated with a private operation are typically 

subject to property tax. 

Ad valorem taxes on coal production and property associated with coal mining 

are primarily collected by local governments and some states. These taxes are 

typically set by taxing entities at the state and local level, including counties, 

cities, towns, school districts, and special districts (e.g., hospital district, soil and 

water conservation district, regional transportation authority, etc.). Commonly, 

the county treasurer is responsible for the collection of these taxes and then 

distributes the collections back to the taxing entities. 

Other Local Taxes 

Two additional tax revenue sources may exist that are applied to coal 

operations. One source, which would not apply to Federal coal leases, would be 

royalty and rents collected by states from state-owned coal resources. The 

other is sales and use taxes. Capital investment and other operating expenses at 

coal operations may generate additional state and local revenues. 

5.8 FEDERAL COAL LEASING PROCESS

The BLM is the Federal agency that is responsible for leasing Federal coal. As 

previously discussed, the BLM coordinates with other Federal, state, and local 

agencies and governments that may be affected by coal-related activities and 

with representatives of industry and environmental groups that may be affected 

by how Federal coal is leased and managed. The BLM leases coal through a 

competitive sales process using a fixed royalty-variable cash bonus bidding 

system. The BLM prepares the paperwork necessary to evaluate tracts for sale, 
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holds the lease sale using sealed bidding procedures, and evaluates the high bids 

received to determine if they constitute FMV. 

5.8.1 Land Use Planning 

The first major step in the Federal coal leasing process is land use planning. 

Decisions resulting from the land use planning process identify lands acceptable 

for further consideration for coal leasing. These areas are identified after 

reviewing all lands in the planning area using the four screens established by the 

Federal coal management program in 1979 and memorialized in Federal 

regulations. The four screens are: 

1. Identification of areas with coal development potential - areas are 

eliminated from coal leasing consideration if they do not possess coal 

development potential (43 CFR, Subparts 3420.1-4[e][1]). 

2. Determining if lands are unsuitable for coal development - areas are 

eliminated if they contain coal but are judged unsuitable for surface coal 

mining after the application of 20 coal unsuitability criteria, if 

exemptions and exception do not apply (43 CFR, Subparts 3420.1-

4[e][2]; 43 CFR, Subpart 3461). 

3. Multiple use conflict analysis - additional coal areas may be eliminated on 

multiple use grounds if other resource values are determined to be 

more valuable than coal (43 CFR, Subparts 3420.1-4[e][3]). 

4. Surface owner consultation - potential elimination of split-estate mineral 

lands where surface mining is proposed and a significant number of 

qualified surface owners have stated a preference against surface coal 

mining (43 CFR, Subparts 3420.1-4[e][4]). 

Pursuant to the Mineral Leasing Act and BLM regulations, lands cannot be 

offered for lease if they are not identified by the BLM as acceptable for further 

consideration for coal leasing. This is also true where lands overlying Federal 

coal resources are managed by a Federal surface management agency other than 

the BLM. 

5.8.2 Competitive Leasing Processes 

Federal coal regulations at 43 CFR, Part 3420 identify two types of competitive 

leasing processes: regional leasing and lease by application. The BLM no longer 

employs regional leasing; the last “certified” Federal coal production region, the 

Powder River Coal Production Region, was decertified in 1990 (see Section 

5.3 for more information).

Regional Coal Leasing 

Under the previous regional coal leasing process—which is described in 43 CFR, 

Part 3420—the BLM would set leasing levels and select potential coal leasing 

tracts for sale based on land use planning, expected coal demand, and potential 

environmental and economic impacts. This process required close consultation 
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with local governments and citizens through a Federal/state advisory board 

known as a Regional Coal Team. All costs associated with conducting regional 

leasing were borne by the Federal Government.

Under this process, regional leasing levels were established by the Secretary of 

the Interior based on recommendations of Regional Coal Teams. Leasing levels 

were based on the following factors (43 CFR, Subpart 3420.2): 

1. Advice from governors of affected states as expressed through the 

regional coal team 

2. The potential economic, social, and environmental effects of coal leasing 

on the region, including recommendations from affected Indian tribes 

3. Expressed industry interest in coal development in the region and 

indications of the demand for coal reserves 

4. Expressed interests for special opportunity sales 

5. Expected production from existing Federal coal leases and non-Federal 

coal holdings 

6. The level of competition within the region and recommendations from 

the Department of Justice 

7. US coal production goals and projections of future demand for Federal 

coal 

8. Consideration of national energy needs 

9. Comments received from the public in writing and at public hearings 

10. Other pertinent factors 

The Regional Coal Team would delineate tracts in any areas acceptable for 

further consideration for leasing whether or not expressions of leasing interest 

had been received for those areas. Upon completion of tract delineation and 

preparation of the tract profiles, the Regional Coal Team would rank the tracts 

in classes of high, medium, or low desirability for coal leasing. Three major 

categories of consideration would be used in tract ranking: coal economics, 

impacts on the natural environment, and socioeconomic impacts (43 CFR, 

Subparts 3420.3-4). 

The delineated tracts selected for further study would be analyzed in a regional 

EIS. These tracts would be grouped into leasing alternatives, with at least one 

alternative falling into the recommended leasing level range. Before making a 

final leasing decision, the Secretary would consult with the governors of the 

affected states, the surface management agencies, and the Department of Justice. 

The Secretary’s final decision would include whether to offer coal for lease and 

if so, how much coal to offer, when to hold the lease sale (or sales), and how 

the coal would be offered for sale. 
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Under the regional leasing process, if a mine were in a situation in which it was 

running out of reserves to maintain existing production or existing contracts, 

prior to the next scheduled regional coal lease sale, the regulations allow for the 

filing of an emergency LBA.175 Emergency lease sales are held when coal is 

needed within 3 years to maintain production at existing mines, to meet 

contractual obligations, or to prevent the bypass of Federal coal. 

Lease-by-Application 

All current leasing under the Federal coal program is conducted through the 

LBA process (43 CFR, Subpart 3425; see Section 5.4.3 for more information). 

Under this process, coal tracts are applied for by an adjacent mine operator in 

order to maintain production levels and extend the life of the mine. The 

processing of LBAs has many steps, some running concurrently, but in general, 

the broad steps taken prior to offering a tract for sale are:176 

1. Receipt and initial review of the application for completeness and 

conformance with the applicable land use plan, and if complete, a cost 

recovery account is established 

2. Ensure adequate data exists to determine the amount and 

characteristics of coal reserves within (and if applicable outside of) the 

application boundary (exploration) 

3. Develop a preliminary tract delineation 

4. Prepare a document to comply with the NEPA, preparing the decision 

on whether to offer a selected coal tract for sale and which tract to 

offer 

5. Prepare and finalize all reports associated with the presale FMV estimate 

6. Offer the selected tract for competitive bid 

Review of Application 

The application must be filed in the proper BLM State Office (SO) having 

jurisdiction over the lands and/or minerals involved. Once received, the SO 

assigns a serial number and reviews the application for completeness, ensuring 

the lands are properly described and available for lease in the approved 

Resource Management Plan.177 The SO notifies the appropriate governor(s) that 

an LBA has been received. Staff confirms the application conforms to the land 

use plan, and the lands have been determined to be acceptable for further 

consideration for coal leasing. If the application is located on lands where the 

surface is administered by another agency, the BLM must confirm with the 

 

175 43 CFR, Part 3420 

176 43 CFR, Part 3420 

177 Leases within the decertified Powder River Coal Production area will take the application before the Powder 

River Regional Coal Team to get a recommendation from that team prior to processing. 
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surface management agency that coal leasing is in conformance with their 

approved land use plan. If private lands are noted in the application, it should be 

determined as soon as possible if a qualified surface owner is present, and 

whether the applicant has received consent to mine. 

The applicant for a new Federal coal lease is required to reimburse the BLM for 

all processing costs incurred by the BLM through a cost recovery account. The 

processing costs include reimbursement of the BLM’s time to provide 

information for and review of the NEPA document, and time to prepare the 

geologic, engineering, economic, and valuation documents that establish the 

presale FMV estimate. Total processing costs will be disclosed in the lease sale 

notice, and if the successful bidder is not the applicant, that bidder will be 

required to reimburse the applicant for the cost recovery fees. 

Coal Exploration 

The BLM must have adequate data to determine the quality and quantity of 

recoverable coal before a tract can be delineated and recommended for leasing. 

If geologic information is inadequate, the BLM will ask the applicant to conduct 

exploration drilling. A BLM-issued exploration license is required to conduct 

exploration activities on unleased Federal coal. However, the license confers no 

right to lease the lands where the exploration occurs. Applicants for exploration 

licenses must provide opportunity for other parties to participate in the 

exploration, on a pro rata cost share basis. A public Notice of Invitation to 

Participate is published in the local newspaper as well in the Federal Register. 

Developing a Preliminary Tract 

Production maintenance tracts generally do not contain sufficient recoverable 

reserves necessary to support an entirely new operation. Recoverable reserves 

are present only in sufficient quantities to extend the life of an adjacent, existing 

mine, or to permit expansion of the mine’s annual production. The tract 

nominated for leasing by the applicant may be reconfigured by the BLM for 

reasons of Public Interest and resource conservation. Some common reasons to 

reconfigure the tract are in order to achieve maximum economic recovery and 

reduce the potential for bypass, increase potential value, promote competition, 

reduce potential impacts on other resources, and accommodate qualified 

surface owner constraints. 

In order to enhance competition among companies, if a portion of an applied for 

tract lies near a competing mine, the BLM may split lands in an LBA into 

individual tracts in the hopes a competing mine may place a bid. The BLM will 

also try to delineate a tract that will enhance FMV. Often the BLM does this by 

pacing the rate of leasing to match the rate of coal production. Rapid leasing in 

excess of reserve needs could adversely affect bonus values, and the BLM is 

obligated not to lease speculative coal resources. The BLM attempts to 

configure these tracts to contain only those reserves needed to meet 
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production needs, recover all coal resources, avoid speculation or high grading, 

and encourage competition. 

Preparing the NEPA Document/Decision to Lease 

All coal lease applications will undergo NEPA analysis in the form of an 

environmental analysis or EIS with full public involvement consistent with 

regulation and policy. The BLM will also invite agencies involved with post-lease 

decision-making—often the OSMRE, the Forest Service, or other Surface 

Management Agency—and the State RA to become Cooperating Agencies in 

preparing the NEPA document. 

Through NEPA, the BLM will evaluate the potential direct, indirect, and 

cumulative environmental and socioeconomic impacts of leasing and developing 

Federal coal in the application area. The BLM evaluates the environmental 

impacts of coal mining that would be expected to result if leases are issued for 

maintenance coal tracts. Although the BLM does not authorize mining by issuing 

leases for Federal coal, the impacts of mining the coal are considered in the 

environmental analyses, because it is a logical consequence of issuing a 

maintenance lease next to an adjacent mine. 

Determining Fair Market Value 

All successful lease bonus bids must meet or exceed the FMV established by the 

BLM prior to offering the lease for sale. The estimate of FMV is prepared in 

accordance with standard appraisal methods and is kept strictly confidential. The 

term is defined as the “amount in cash, or on terms reasonably equivalent to 

cash, for which in all probability the coal deposit would be sold or leased by a 

knowledgeable owner willing, but not obligated to sell or lease to a 

knowledgeable purchaser who desires but is not obligated to buy” (43 CFR, 

Subparts 3400.0-5[n]). 

The presale estimate of the FMV relies on information about the geology and 

characteristics of the coal in the application area, the engineering report that 

considers an optimum mine plan, mining cost associated with extracting the 

identified reserves in the preferred tract, an economic report that establishes 

the market for the coal lying within the selected tract, and finally the 

appraisal/valuation report. The economic report identifies the most likely 

market(s) for coal lying within the tract, including an evaluation of whether the 

coal is suitable for export. The BLM is also required by statute and regulation to 

conduct a public hearing between the Draft and Final EIS to receive comments 

from the public on the tract proposed for leasing to inform the calculation of 

the FMV. 

The BLM uses a sealed bid system as a measure to ensure FMV is received and 

the Public Interest is protected. In most instances, particularly in coal areas 

where lease sales are held on a consistent basis, the BLM keeps the presale 

estimate of FMV, and the information used to establish this value, confidential 

even after a lease sale is complete. 
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Conducting the Sale and Issuing the Lease 

Once a decision is made to move forward and offer a coal tract for competitive 

sale, an announcement will be made in proposed and final sale notices in the 

Federal Register that give the time, date, and procedures of the lease sale and 

description of the coal to be offered. Other methods of notifying the public of 

the sale may also be employed. 

The lease sale begins with receipt of sealed bids. All sealed bids are opened at 

the public lease sale. The apparent high bid is accepted contingent upon it 

meeting or exceeding the BLM’s presale estimate of FMV, adjudication 

requirements (bidders must meet regulatory requirements necessary to be 

qualified to hold a Federal coal lease), and the appropriate fees and payments 

being attached. 

Before a lease is issued, the lessee must furnish a bond in an amount determined 

by the agency to ensure compliance with the terms and conditions of the lease 

and to provide a bond to cover the remaining balance of the bonus bid.178 A sale 

panel consisting of a mineral appraiser/economist, geologist, mining engineer, 

and Washington Office delegate will review the apparent high bid to determine 

if it has met or exceeded the presale FMV. 

If the apparent high bid meets the FMV and the bidder is qualified to hold a 

Federal coal lease, the recommendation is sent before the BLM Authorized 

Officer, who will accept the bid and send the provided information to the 

Department of Justice for antitrust review. Upon hearing from Department of 

Justice, the Authorized Officer will either issue or reject the lease. 

Should the apparent high bid not meet the FMV, the BLM Authorized Officer 

will send notice rejecting the bid and the right to appeal. The notice also allows 

a bidder to request the BLM to reoffer a tract if they waive their right to appeal. 

If no bid is received during the reoffer, the decision to hold the sale is complete, 

and the BLM Authorized Officer will close the case with no further action. 

Public Interest 

Throughout the coal leasing process, the BLM takes into careful consideration 

whether leasing the applied for lands would be in the public interest (30 USC, 

Sections 181-287, 351-359; 43 CFR, Subparts 3425.1, 3472.1). The regulations 

state the BLM must reject an application if “leasing of the land covered by the 

application, environmental or other sufficient reasons, would be contrary to the 

public interest” (43 CFR, Subparts 3425.1-8[a][3]). Many, often competing, 

interests must be considered in arriving at a Public Interest determination, 

 

178 Lessees are required to pay the bonus bids in five equal installments beginning with the first payment due at the 

time of the lease sale and the remaining payments due on the following four anniversary dates of the lease. Per the 

Energy Policy Act of 2005, if a successful bidder can demonstrate they have a history of timely payments, the 

requirement to cover any outstanding balance with a bond can be waived. 
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including, but not limited to, the applicant’s request; the environmental impacts; 

the economic benefit to the local, state, and national economy; rights of 

qualified surface owners; ensuring a fair return for the use of the public 

resources; and conservation of the public resource (BLM Manual 3435). 

The Federal Coal Lease 

A Federal coal lease grants the right to explore for, extract, remove, and 

dispose of some or all of the coal deposits that may be found on the leased 

lands. After a lease is issued, the BLM will review and approve a Resource 

Recovery and Protection Plan, which describes how maximum economic 

recovery of the coal resource will be achieved. The BLM does not, however, 

approve any mining activities. A Federal coal lease is granted on the condition 

that the lessee will obtain the appropriate permits and licenses from other 

Federal, state, and local agencies. Before the lessee may initiate any mining 

activity, as required by SMCRA, OSMRE or the state RA must approve a permit. 

In addition, the Assistant Secretary, Land and Minerals Management, after 

receiving a recommendation from OSMRE, must approve a mining plan as 

required by the Mineral Leasing Act. As part of a permit issued by OSMRE or 

the state RA, the permittee is required to post a reclamation bond to cover the 

costs of returning the land to the pre-mining state. 

A Federal coal lease has an initial term of 20 years, but it may be terminated 

within 10 years if the coal resources are not diligently developed. A lease is 

readjusted at the end of the 20-year primary term and every 10 years thereafter 

for the life of the lease. Diligent development occurs when the lessee mines one 

percent of the established recoverable reserves. Once that threshold is met, the 

lessee is required to continue to produce one percent of their original 

recoverable reserves on an annual basis, or pay an advance royalty.179 Lessees 

who fail to comply with continued operation provisions subject their leases to 

cancellation. Because mines may be located in areas with various coal owners 

and mining occurs in a logical sequence, establishing a logical mining unit180

allows lessees to consolidate the diligent development and continuous 

operations requirements for Federal leases within the boundary of the mine. 

 

179 Upon request by the lessee, the BLM may accept, for a total of not more than 20 years, the payment of advance 

royalties in lieu of continued operation, consistent with the regulations. The advance royalty will be based on a 

percentage of the value of a minimum number of tons determined in the manner established by the advance 

royalty regulations in effect at the time the lessee requests approval to pay advance royalties in lieu of continued 

operation (30 USC, Sections 181-287; 20 USC, Sections 351-359 (acquired lands); 43 CFR, Part 3483; BLM Coal 

Lease Form 3400-12). 

180 A logical mining unit is an administrative construction that allows the lessee or operator to consolidate the 

diligent development and continued operations requirements for all the Federal leases and other coal tracts within 

the boundaries of the mine. A logical mining unit provides for continuity in management of the coal resource 

whenever the geologic characteristics of a coal seam cross property boundaries. A logical mining unit has been 

defined as an area of land in which the coal can be developed in an efficient, economical, and orderly manner as a 

unit with due regard for conservation of the coal and other resources. An application is required to be filed with 

the BLM for approval to form a logical mining unit. 
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At any time, a lessee may surrender, in whole or in part, its Federal coal lease 

by filing a written request for relinquishment. Before a lease can be relinquished, 

the lessee must be in compliance with all lease terms and conditions, and have 

paid all payments and fees. 
January 2017 Federal Coal Program Programmatic EIS 6-1

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CHAPTER 6 

PROGRAMMATIC ENVIRONMENTAL IMPACT 

STATEMENT

The BLM has received a large amount of substantive input from a diverse array 

of stakeholders through both the internal and external scoping process. 

Chapter 5 includes a summary of the comments raised through the scoping 

process, and Appendix D includes a full record of all comments received. The 

BLM has undertaken a thorough review of the scoping record and developed a 

preliminary framework for the PEIS based on this input. This chapter presents a 

purpose and need statement, reform options that meet identified policy 

objectives to be carried forward for further consideration by the BLM, a 

rationale for dismissing some options from further consideration, a framework 

for developing program reform alternatives, issues for analysis, an analytical 

approach, analytical considerations, and a schedule for completion of the PEIS. 

6.1 PURPOSE AND NEED STATEMENT

An EIS “shall briefly specify the underlying purpose and need to which the 

agency is responding in proposing the alternatives including the proposed 

action” (40 CFR, Subpart 1502.13). For many types of actions, the “need” for 

the action can be described as the underlying problem or opportunity to which 

the BLM is responding with the action. The “purpose” can be described as a 

goal or objective that the BLM is trying to reach (BLM NEPA Handbook Section 

6.2). 

6.1.1 Need for the Federal Action 

The need for this action is to undertake a comprehensive review of the Federal 

coal program and to consider how the program can be improved and 

modernized in the areas of fair return, climate change, resource management 

and protection, and program administration. The last time the Federal coal 

program received a comprehensive review was in the mid-1980’s, and most of 

the existing regulations which were promulgated in the late 1970’s, have been 

only slightly modified since that time. Further, the direct, indirect, and 
6. Programmatic Environmental Impact Statement 

6-2 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

cumulative impacts of the Federal coal program have not been fully analyzed 

under NEPA in over 30 years. As described in Secretarial Order 3338, this has 

led to calls from a variety of stakeholders, including the GAO, OIG, members of 

Congress, interested stakeholders, and the public for review of many facets of 

the Federal coal program. 

This need is a part of the BLM’s stewardship role as a proprietor and sovereign 

regulator, which is charged by Congress with managing and overseeing mineral 

development on the public lands, not only for the purpose of ensuring safe and 

responsible development of mineral resources, but also to ensure conservation 

of the public lands; the protection of their scientific, historic, and environmental 

values; and compliance with applicable environmental laws. In addition, the BLM 

has a statutory duty to ensure a fair return to the taxpayer and broad discretion 

to decide where, when, and under what terms and conditions mineral 

development should occur. 

Based primarily on the input received through the listening sessions and scoping 

process, it appears that modernization of the Federal coal program is 

warranted. While energy markets, communities, environmental conditions, and 

national priorities have changed dramatically, the program has remained fairly 

static in its administration over the last thirty years. 

There are three general areas in particular that should be modernized to ensure 

that the program continues to accomplish its responsibilities to the American 

public. In each of these areas additional analysis is necessary prior to the 

recommendation of specific policy choices, in order to provide a complete 

understanding of the likely impacts of various policies on energy markets, 

electricity prices, employment, and other critically important issues. These 

issues will be the focus areas of analysis for the PEIS going forward. However, it 

is possible at this stage in the process to identify the most promising policies for 

consideration, and those are also set out below. In addition, there are some 

simpler good government improvements that can be made without significant 

additional analysis. These may be undertaken in parallel with the PEIS process 

and they are set out below as well. 

The three general areas requiring modernization are: fair return to Americans 

for the sale of their public coal resources; impact of the program on the 

challenge of climate change and on other environmental issues; and efficient 

administration of the program in light of current market conditions including 

impacts on communities. 

First, the program must ensure that the public owners of this coal receive a full 

and fair return for this resource. Addressing this issue will benefit not only the 

general public but the states and communities in which Federal coal is located, 

since 50 percent of most revenue generated by the program goes to those 

states. 
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In 2013, both GAO and OIG issued reports making specific recommendations 

regarding the Federal coal program, particularly with respect to the leasing 

process and fair market value. The BLM addressed these recommendations 

through the development of new protocols and issuance of policy guidance, a 

manual, and a handbook. In the broader context of these reports, stakeholders 

have expressed additional concerns with what they believe are fundamental 

weaknesses in the program with respect to fair return. 

These concerns arise, at least in part, because there is currently very little 

competition for Federal coal leases. About 90 percent of lease sales receive 

bids from only one bidder, typically the operator of a mine adjacent to the new 

lease, given the investment required to open a new mine. While the BLM 

conducts a peer-reviewed analysis to estimate a pre-sale fair market value of the 

coal and will not sell a lease unless the bid meets or exceeds that value, 

commenters have questioned whether an accurate fair market value can be 

identified in the absence of a truly competitive marketplace. As OIG pointed 

out, “since even a 1-cent-per-ton undervaluation in the fair market value 

calculation for a sale can result in millions of dollars in lost revenues, correcting 

the identified weaknesses could produce significant returns to the 

Government.”181 

Commenters have also raised concerns about the royalty rates in Federal leases, 

which are set by regulation at a fixed 8 percent for underground mines and not 

less than 12.5 percent for surface mines. Some stakeholders have suggested that 

the large volumes and relatively low costs of Federal coal, which currently 

represents approximately 42 percent of total domestic production, have the 

effect of artificially lowering market prices for coal, further reducing the amount 

of royalties received. There are also concerns that the Federal coal program 

obtains even lower returns through certain types of leasing actions, such as 

lease modifications, and through royalty rate reductions, which may result in 

royalty rates as low as 2 percent. In addition, stakeholders have noted that the 

$100/acre minimum bid requirement has not been updated since it was 

established in the regulations in 1982. Some stakeholders further suggest that a 

fair return to the taxpayer should also include compensation for externalities 

such as the environmental damage (or lost environmental benefits) from the 

removal and combustion of the coal. Through the PEIS, the BLM will consider 

reform options to address these and other aspects of fair return. 

Second, the program must ensure appropriate alignment with US climate goals 

and adequately reflect the impact of the program on climate change. Virtually 

every community in the US is being impacted by climate change, and Federal 

programs have an obligation to be administered in a way that will not worsen 

and help address these impacts. The United States has pledged under the United 

 

181 OIG. 2013. Coal Management Program, US Department of the Interior, Report No. CR-EV-BLM-0001-2012. 

June 2013. Available at https://www.doioig.gov/sites/doioig.gov/files/CR-EV-BLM-0001-2012Public.pdf 
6. Programmatic Environmental Impact Statement 

6-4 Federal Coal Program Programmatic EIS January 2017 

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Nations Convention of Climate Change to reduce its greenhouse gas emissions 

by 26-28 percent below 2005 levels by 2025. Efforts are already being made to 

reduce US greenhouse gas emissions in line with this target through measures 

such as vehicle efficiency standards, the CPP, energy efficiency standards, 

requirements to reduce methane reductions from oil and gas production, and 

many other measures. 

However, numerous scientific studies indicate that reducing greenhouse gas 

emissions from coal use worldwide is critical to addressing climate change. As 

noted above, the Federal coal program is a significant component of overall US 

coal production. In 2015, 42 percent of total US coal production occurred on 

Federal lands.182 When combusted, this Federal coal contributes roughly 10 

percent of total US greenhouse gas emissions. Many stakeholders highlighted the 

tension between producing very large quantities of Federal coal while pursuing 

policies to reduce US greenhouse gas emissions substantially, including from coal 

combustion. Furthermore they stated that the current leasing system does not 

provide a way to systematically consider the climate impacts and costs to the 

public of Federal coal development, either as a whole or in the context of 

particular projects, and suggested tools such as royalty adders and 

compensatory mitigation. 

Several of the most promising reforms in this area also are linked to fair return 

in that they would require an increase in the cost of this coal through price or 

royalty increases or compensatory mitigation to reflect and help to address its 

climate change impact. Like other fair return approaches, these reforms would 

benefit not just the public generally, but more specifically the states in which the 

Federal coal is located and their communities. Through the PEIS, the BLM will 

consider reform options to better align the Federal coal program with the 

challenges presented by climate change. 

In addition, there is a need for program reform to better protect the nation’s 

other natural resources (e.g., air, water, and wildlife). Commenters suggested a 

variety of options for improving protection and management of resources as 

part of the Federal coal program in accordance with the “multiple use” and 

“sustained yield” principals of FLPMA. Commenters expressed concern that the 

unsuitability criteria are not consistently applied at the land use plan level, which 

they believe disregards important landscape-scale land use allocation 

considerations. Commenters also suggested that the current unsuitability 

criteria should be revised and expanded to provide greater protection to 

important resources such as bats and Greater sage-grouse. Commenters 

requested that the BLM develop strategic leasing plans that would address 

resource issues at an appropriate scale and with consideration of the need for 

mitigation. Options were suggested for strengthening lease applicant 

 

182 US Extractive Industries Transparency Initiative. Full dataset. Table 1. Available at https://useiti.doi.gov/ 

downloads/Federal-production/. See also EIA. Annual Coal Report. Available at http://www.eia.gov/coal/annual/ 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-5

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qualifications to ensure that future leases are only offered to companies that 

have a proven track record with successful environmental performance, 

including reclamation. Still other commenters suggested using a pricing 

mechanism (adder associated with royalties) to account for the environmental 

externalities associated with coal production and use such as air quality impacts. 

Through the PEIS, the BLM will consider reform options to improve the 

protection of natural resources. 

Finally, there is a need for common-sense reforms to the Federal coal program 

that provide for the efficient and orderly administration of coal on Federal lands 

in light of current market conditions. A number of commenters expressed 

concern over the length of time it takes to obtain a Federal coal lease (in some 

cases 10+ years) and what they perceive as redundancies in the process 

between the other agencies involved. They urged the BLM to consider as part of 

the PEIS ways to improve the administration of the lease process itself. Others 

offered information to suggest that current leasing processes do not fully 

promote competition in the current marketplace. And many, particularly in coal 

states and communities, made a powerful case that the program administration 

does not appropriately consider or address the impact on communities from 

changes in the market. The BLM will consider reform options aimed at 

improving the administration of the Federal coal leasing process in all of these 

areas. 

6.1.2 Purpose of the Federal Action 

The purpose of this action is to identify, evaluate, and recommend 

comprehensive reforms to the Federal coal program. Through the PEIS, the 

BLM will consider how the program can be improved and modernized to foster 

the orderly development of BLM-administered coal on Federal lands in a 

manner that gives proper consideration to the impact of that development on 

important stewardship values while also ensuring a fair return to the American 

public. 

Programmatic NEPA reviews address the general environmental issues relating 

to broad decisions, such as those establishing policies, plans, or programs, and 

can effectively frame the scope of subsequent site- and project-specific Federal 

actions.183 The PEIS provides the BLM with an efficient and effective tool to 

consider a wide range of reasonable reform alternatives for the Federal coal 

program and adequately assess the cumulative effects of those alternatives 

across many factors such as market and climate effects. The analysis in the PEIS 

will inform, and possibly streamline, future decisions for individual actions under 

the Federal coal program through the ability to tier. Importantly, the PEIS 

provides an excellent venue for meaningful public involvement, collaboration 

 

183 Executive Office of the President, Council on Environmental Quality “Effective Use of Programmatic NEPA 

Reviews.” December 2014. Available at https://ceq.doe.gov/current_developments/docs/ 

Effective_Use_of_Programmatic_NEPA_Reviews_Final_Dec2014_searchable.pdf 
6. Programmatic Environmental Impact Statement 

6-6 Federal Coal Program Programmatic EIS January 2017 

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with interested parties, and ultimately transparent, accountable, and informed 

government decision-making. 

6.2 OPTIONS AND ALTERNATIVES

6.2.1 Options to Be Evaluated 

Table 6-1 outlines the reform options that the BLM is proposing to carry 

forward for further consideration that may be analyzed in the PEIS and used as 

the basis for alternatives development. The options are organized by the policy 

objectives described in the Need for Federal Action in Section 6.1.1. 

Table 6-1

Options Proposed for Analysis by Policy Objective

Fair Return

Reduce/Account for 

Greenhouse Gas 

Emissions

Improve Resource 

Protection and

Management

Increase Lease 

Process Efficiency

1. Increase royalty rate

2. Implement FMV 

process changes (i.e., 

transparency and

consistency)

3. Limit the use and 

improve the 

transparency of royalty 

rate reductions

4. Increase rental rate

5. Raise minimum 

bonus bid

6. Implement intertract or modified intertract bidding processes

to increase 

competition

7. Evaluate current 

performance bonding 

amounts; increase 

bonding levels as 

necessary

8. Convene a royalty 

policy commission

1.Account for carbonbased externalities

through royalty rate 

increase or royalty adder

2. Require compensatory 

mitigation for greenhouse 

gas emissions

3. Lease based on a 

carbon budget

4. Create incentives for 

methane capture

5. No new leasing, with 

limited modifications

1. Improve application of 

unsuitability criteria; 

modify criteria

2. Develop strategic 

leasing plans that address 

landscape scale issues, 

multiple use, and 

mitigation planning

3. Account for additional 

coal-related externalities

4. Strengthen lease 

applicant qualification

requirements

5. Apply environmental 

protections to existing 

leases 

6. Develop regional 

mitigation strategies for 

existing and new coal 

development (to address 

public health and 

environmental impacts)

7. Develop best 

management practices

1. Develop strategic 

leasing plans that allow 

for tiering of future 

lease decisions

2. Create preapplication process

3. Create a 

standardized lease 

application form and 

develop an electronic 

application platform 

4. Establish a single 

team to develop FMV

5. Work with other 

agencies to evaluate 

means for eliminating 

overlapping 

requirements and 

redundant processes

6. Improve 

transparency in the 

leasing process
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-7

Scoping Report 

The reform options presented were raised through the scoping process or 

developed through internal scoping conducted by the BLM’s Interdisciplinary 

Team. These options are described in greater detail in the text that follows 

based on best available information. The options presented will be evaluated in 

terms of benefits, impacts, and overall feasibility, including the BLM’s legal and 

statutory authority for implementation. The BLM may use the options in 

combination to develop alternatives to be considered in the PEIS, as described 

in more detail below. Options raised through the scoping process that the BLM 

proposes not to carry forward for further consideration are discussed in 

Section 6.2.3. Based on further analysis, some of the options identified in 

Table 6-1 may also be eliminated from further consideration. 

Fair Return 

A central objective of the BLM’s reform effort for the Federal coal program is 

the level of return that it provides to the American public. The BLM received a 

number of comments suggesting reform options that would help better reflect 

FMV and consequently improve return to the taxpayer. The Federal 

Government receives revenues generated through the mining of Federal coal in 

three ways: production royalties, bonus bids, and rental fees (see Section 5.7.3

for more information). The BLM will assess the following options in terms of the 

degree to which they would improve fair return to the taxpayer as well as their 

overall feasibility and practicality. 

1. Royalty Rate Increase: The BLM will evaluate the ability of using the 

royalty rate to better reflect FMV and assess the impacts of increasing 

the royalty rate on Federal coal. Royalty rates are currently set by 

statute at a minimum of 12.5 percent of the gross value of the coal 

produced for surface mines and 8 percent for underground mines (43 

CFR, Subparts 3473.3-2). The rate for surface mines may be increased 

on a lease-by-lease basis but may not be set below 12.5 percent. 

Currently, most leases contain a royalty rate of 12.5 percent. The BLM 

will analyze a range of royalty rate increases as part of the PEIS effort to 

secure fair return. The BLM will consider the effective royalty rate 

(royalty rate when accounting for deductions and royalty relief) for 

other federally leased commodities, considering royalties, bonus bids, 

and rental rates. This may include, but is not limited to basing the 

royalty rate on the market price for nearby regional coal, basing the 

royalty rate on the market price for non-Federal coal nationwide, or 

making the royalty rate commensurate with the rate used on other 

resources such as offshore oil and gas (18.75 percent). The BLM may 

also consider adjusting existing royalty rates upward until they are 

commensurate (on an energy content basis) with royalties that would 

be collected on substitute fuels, such as natural gas, or possibly consider 

a royalty rate aimed at maximizing revenues. 

For context, the Council of Economic Advisers (CEA) in their study 

entitled, “The Economics of Coal Leasing on Federal Lands: Ensuring a 
6. Programmatic Environmental Impact Statement 

6-8 Federal Coal Program Programmatic EIS January 2017 

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Fair Return to Taxpayers,”

184 estimated the necessary royalty rate in the 

year 2025 based on mine mouth prices to ensure a fair return as 

follows: 17 percent based on regional coal prices, 29 percent based on 

non-Federal nationwide coal, and 29 percent based on natural gas 

prices.185 The CEA concluded that a policy goal of maximizing return to 

the taxpayer would require royalty rates of 304 percent186 (equal to 

approximately a $30/ton royalty charge on Powder River Basin coal), 

which would curtail future Federal coal production by more than half 

from projected levels (partially offset by increased production from 

other regions) while increasing revenue by $2.7-$3.1 billion. No other 

studies submitted during the scoping process went into this level of 

detail on royalty rate increases for the purposes of fair return. 

Because royalty charges are related to production levels and gross 

revenues, the BLM will model the impact various royalty rates have on 

total Federal coal production and corresponding revenues. For example, 

the CEA study estimated that Federal coal production based on the 

royalty rate increases described above would decrease between 3 and 

53 percent, respectively, and revenue would increase between $0-290 

million to $2.7-3.1 billion annually. 

The BLM will also evaluate in more detail than the CEA study how 

raising the royalty rate may depress bonus bids. As previously 

discussed, total returns are composed of revenues from royalty rates, 

bonus bids, and rental fees, less administrative costs. Increasing any 

single component may reduce one of the other components or vice 

versa. Revenue collection is split among these components as a risksharing mechanism between lessors and lessees. 

Implementation of this option could be accomplished through policy 

under the Secretary’s discretion under the Mineral Leasing Act for 

surface mines; however, rulemaking would be required to increase 

royalty rates for underground mines. Additionally, rulemaking would be 

required if the regulatory minimum royalty rate is to be increased.

2. Fair Market Value Transparency: The BLM will consider various 

ways to build on processes that improve consistency and transparency 

in the FMV calculation process without jeopardizing the competitive 

process. These include the new oversight process in which the 

 

184 Council of Economic Advisers, Executive Office of the President. 2016. The Economics of Coal Leasing on 

Federal Lands: Ensuring a Fair Return to Taxpayers. June 2016. Available at https://www.whitehouse.gov/sites/ 

default/files/page/files/20160622_cea_coal_leasing.pdf 

185 These percent values are relative to an estimated 9.3 percent weighted average royalty rate based on 

production in 2025 and accounting for waivers, suspensions, and reductions. 

186 The royalty rates increases pertain to mine mouth, initial point of sale, cost of coal. For most Federal coals, this 

is only a small portion of the totaled delivered cost of coal to a power plant. Therefore, the actual percent 

increase in price observed by the end user will be significantly lower than the values reflected here. 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-9

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OVS/DME reviews the BLM’s FMV calculations (see Section 5.8.2, 

Competitive Leasing Process), or the establishment of a single team to 

develop FMV. Regarding transparency, the BLM Handbook instructs 

that: 

“While much of the data and information used to develop a pre-sale 

estimate of value have proprietary and confidential characteristics, it 

is the policy of the BLM that the Federal coal leasing processes are 

as transparent as the law and regulations allow. To this end, 

consideration must be given while developing reports that support 

FMV estimates to the ease with which sensitive, confidential, and 

proprietary data can be redacted to provide publicly available 

documents. It is not acceptable to redact an entire document. 

Further, consideration should be given to timely posting public 

versions of FMV related documents prominently on publicly 

available web sites after a successful lease sale, consistent with law 

and regulation.”187 

As part of the PEIS, the BLM will look at ways to improve the amount 

and timeliness of information available to the public for FMV, as well as 

improved transparency of the process. FMV process improvements will 

require, at a minimum, modification or additions to BLM policy and 

guidance to implement, and they may require rulemaking based on 

options to be evaluated.188

3. Royalty Rate Reductions: The BLM will evaluate its current use of 

royalty rate reductions and consider ways to limit the use of those 

reductions. Under certain circumstances the BLM can, upon application 

by the lessee or operator, temporarily reduce the royalty rate for a 

specific area of coal. Since the passage of FCLAA in 1976, the BLM has 

frequently granted royalty rate reductions.189 In their scoping comment 

letter, Taxpayers For Common Sense noted that the BLM has reduced 

the royalty rates on 35 of 80 Federal coal leases in 9 states during the 

last 25 years, more than half of which occurred between 2001 and 2007 

based on data they obtained from the ONRR.190 

The general consideration for a royalty rate reduction is to encourage 

the greatest ultimate recovery of the coal resource. Analysis will be 

 

187 BLM. 2014. BLM H-3073-1, Coal Evaluation Handbook. October 12, 2014. Available at https://www.blm.gov/ 

style/medialib/blm/wo/Information_Resources_Management/policy/blm_handbook.Par.58766.File.dat/H-3073-1.pdf 

188 Pursuant to Mineral Leasing Act § 201(a), “[n]o bid shall be accepted which is less than the fair market value[.]”

The Mineral Leasing Act does not provide a definition for FMV. Changes to the FMV process may require 

modifications to 43 CFR, Subpart 3422.1. 

189 ONRR. 2016. Royalty Reporting (except Solid Minerals). Availiable at http://www.onrr.gov/ReportPay/royaltyreporting.htm

190 Taxpayers For Common Sense. 2016. Scoping comment letter on Coal PEIS. July 28, 2016. See Volume 2 

Appendix D. 
6. Programmatic Environmental Impact Statement 

6-10 Federal Coal Program Programmatic EIS January 2017 

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needed to determine the overall revenue impact of royalty rate 

reductions and the potential for improved return if reductions were 

curtailed. Analysis will be needed to determine if limitations on royalty 

rate reductions could result in reduced revenue to the government, as 

rate reductions are most applicable to already marginal investments (i.e., 

without the reduction, the coal would not be recovered and no revenue 

would be generated). 

The BLM will also consider ways to improve the transparency 

associated with the use of royalty rate reductions. As described in 

scoping comments from Taxpayers For Common Sense and others, the 

BLM could improve transparency in royalty rate reductions by providing 

public updates of the applications received and/or approved. This work 

has already been initiated through the implementation of BLM 

Instruction Memorandum No. 2014-156 and the associated justification 

that State Directors are required to provide to the Washington Office 

any application to ensure consistency in the BLM’s review and decisions 

related to royalty rate reductions.191 These policies may be further 

modified through the PEIS and formalized as part of the proposed 

program reform alternatives. 

4. Rental Rate: The BLM will consider increasing the rental rate 

associated with coal leases, which is currently set at a minimum $3 per 

acre as established in 1979 (43 CFR, Subparts 3473.3-1). At a minimum, 

the BLM will consider increasing rental rates to reflect inflation since 

1979. Given the small percentage of overall revenues that are generated 

by rental rates (see Section 5.7.3), it is not expected that this option 

will result in a substantial increase in return. This option may be 

implemented without rulemaking on an individual lease basis; however, 

rulemaking would be required to increase the regulatory minimum rate. 

5. Minimum Bonus Bid: The BLM will consider raising the minimum 

bonus bid for coal leases that is currently set at $100 per acre and was 

established in 1982. The minimum bonus bid represents the minimum 

value that can be received by the Treasury for a coal lease (43 CFR, 

Subpart 3422.1[c][2]). The minimum regulatory value is used only when 

other methods of estimating value (i.e., FMV) yield results that are less 

than the equivalent of $100 per acre. At a minimum, the BLM will 

consider increasing the minimum bonus bid to reflect inflation since 

1982. Accounting for inflation alone would increase the minimum bid to 

approximately $250 per acre as pointed out by the Institute for Policy 

 

191 BLM. 2014. BLM Instructional Memorandum 2014-156. Supplemental Guidance on Processing Royalty Rate 

Reduction Applications. September 26, 2014. Available at 

http://www.blm.gov/wo/st/en/info/regulations/Instruction_Memos_and_Bulletins/national_instruction/2014/IM_201

4-156.html 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-11

Scoping Report 

Integrity in their paper entitled, “Illuminating the Hidden Costs of 

Coal.”

192 

Raising the minimum bid is not likely to result in a substantial 

improvement in return since the minimum bonus bid has historically 

only been employed for leasing in North Dakota and Oklahoma. 

Minimum bids can vary regionally, and the BLM may also consider 

establishing minimum bonus bids by coal region taking into account 

regional economic, geologic, and engineering variables. An additional 

consideration may be to remove the $100 bid floor and use the FMV 

process for setting the statutory minimum bid. The BLM will also 

consider the feasibility of and need for considering the option value 

associated with future information and/or changed conditions when 

establishing the minimum bonus bid. 

6. Alternative Leasing Mechanism: The BLM will consider the use of 

alternative leasing mechanisms as a potential means to increase 

competition among bidders with the goal of improving return. 

Consideration will be given to inter-tract bidding and modified intertract bidding processes. 

An inter-tract bidding requires mining companies that are interested in 

different tracts to compete among themselves for the right to produce 

on those tracts. As a general overview, the BLM would determine a 

leasing level for the region being covered before the lease sale. The BLM 

would then offer tracts for sale, or accept industry requests, in excess 

of the determined leasing level. The companies would all bid at once on 

the tracts they most prefer, and their bids would be ranked (e.g., based 

on $/ton or $/Btu). Tracts would then be subtracted from the leasing 

level in order until the leasing level is met. At this point, the remaining 

tracts would be rejected. The accepted tracts would be subjected to 

standard post-sale review to ensure that they achieved FMV. 

Under a modified inter-tract bidding process, the BLM would determine 

a maximum tonnage or maximum number of Btus (or possibly carbon 

credits that would give the right to mine a volume of coal) to be leased 

for a region. All interested companies would bid among themselves for 

the right to produce coal. It could be conducted such that each bidder 

bids for a specified quantity of coal, and the highest bidders’ quantities 

are subtracted in order from the level. Alternately, bids could be 

accepted on a proportional basis, where each bidder bids in a price per 

ton or per Btu and wins a proportion of the total leasing level 

equivalent to the value of their bid. The former option consolidates 

production among the highest bidders, while the latter ensures that 

 

192 Bureau of Labor Statistics. 2016. Consumer Price Index Inflation Calculator. Available at http://data.bls.gov/cgibin/cpicalc.pl?cost1=100.00&year1=1982&year2=2016 
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6-12 Federal Coal Program Programmatic EIS January 2017 

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every reasonable bidder receives some production. Once the lessees 

have received their production quantities, they would be free to allocate 

the increase on Federal lands of their choice subject to suitability review 

and NEPA analysis. 

Both of these alternative bidding processes imply the need for a 

strategic plan that sets leasing level for a given region or nationally. 

Analysis will be needed to determine the potential for increased return 

associated with modified bidding systems in comparison to the 

administrative costs. If adopted, the design of this option would be 

critical. Any procedure to establish leasing levels is subject to 

uncertainty about future supply and demand conditions in energy 

markets. For example, the government should have the flexibility to 

adjust leasing levels to changing market conditions. The methods for 

how to determine a leasing cap will have to be established (see for 

example Reduce/Account for Greenhouse Gas Emissions #3). This 

option may also be considered in connection with the greenhouse gas 

issues to be discussed below. 

It should be noted that the BLM leased coal based on regional plans that 

included the amount of coal to be leased starting in the late 1970s. This 

system was suspended due in part to low bidding activity. However, this 

system did not include the aforementioned alternative leasing 

mechanisms, and consideration of these options would not be limited to 

the specific processes and requirements previously used for regional 

leasing. 

7. Lease Bonding: The BLM will assess whether current performance 

lease bonding procedures are sufficient to provide assurance of payment 

of obligations required under a lease. The BLM is not responsible for 

establishing bonds to cover environmental protection and reclamation 

requirements within a SMCRA permit, but rather is responsible for 

establishing bonds to protect the Federal government from losses in 

rentals and royalties (and in certain cases unpaid deferred bonus). The 

bonds are calculated using guidance established in BLM Manual Section 

3474 and WO IM 86-145. At minimum, a bond must cover one-fifth of 

the bonus bid if there is any unpaid balance, as well as one year of 

advance rental and one-quarter year of royalties if the lease is in 

production. Bond reviews are currently conducted at least annually but 

may be increased based on circumstances, such as an anticipated 

increase/decrease in lease production. The BLM will accept a number of 

different types of lease bonds but does not accept self-bonds (43 CFR, 

Subpart 3471.1). This option may be implemented without rulemaking. 

However, rulemaking would be necessary to make the BLM regulations 

consistent with section 436 of the Energy Policy Act of 2005, 42 USC, 

Sections 15801 et seq, amending the Mineral Leasing Act at section 

201(a)(4)(A). 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-13

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8. Royalty Policy Commission: A number of commenters suggested 

that the BLM should immediately reconvene the Royalty Policy 

Committee, which was established by charter in 1995 under the 

authority of the Federal Advisory Committee Act. The Committee 

advised the Secretary on royalty management issues and other mineralrelated policies, and also provided a forum for mineral lessees, 

operators, revenue payers, royalty recipients, government agencies, and 

interested public to express their views on those issues. The 

Committee charter required biennial review and could be renewed in 2-

year increments by the Secretary as long as the Minerals Management 

Service required the expertise and advice of the Committee. 

The Royalty Policy Committee was terminated on April 2, 2014, due to 

lack of participation. While the BLM does not believe there is a need to 

reconvene the Royalty Policy Committee in its previous form, as the 

Department of the Interior has in place various advisory bodies to 

address key minerals issues, it will consider the potential value in a 

policy commission that could assist with rate setting for the Federal coal 

program and will give that further consideration in the PEIS. 

Implementation of this option may require development of a charter 

pursuant to the Federal Advisory Committee Act and Secretarial action 

to convene a committee. 

Reduce/Account for Greenhouse Gas Emissions 

A related central objective to the BLM’s reform effort for the Federal coal 

program is consideration of the effect of the program on, and alternatives for 

alignment with, US climate goals. Many stakeholders highlighted the tension 

between producing large quantities of Federal coal while pursuing policies to 

restrict global warming to a 2 degrees Celsius outcome, in line with the Paris 

Agreement (see Section 5.4.6 for more information). The BLM received a 

number of suggestions for reform options that would help limit greenhouse gas 

emissions associated with Federal coal production. Future BLM analysis will 

evaluate the comparative effectiveness of these options at mitigating greenhouse 

gas emissions while still respecting the BLM’s multiple use and fair return 

statutory mandates. 

1. Accounting for Carbon-Based Externalities Through a Royalty 

Rate Increase or Royalty Adder: The BLM will consider options to 

account for the carbon-based environmental and social costs of coal 

production and use (e.g., climate change damages such as net 

agricultural productivity, human health, and property damages from 

increased flood risk). Two possible methods of adjusting the royalty to 

account for carbon-based externalities will be considered: an increase in 

the royalty rate (i.e., a percent increase) to account for carbon-based 

externalities and a carbon adder (or carbon fee) generally expressed as 

a $/ton fee that would be in addition to the royalty rate. The advantages 

and drawbacks of a royalty rate increase versus an adder will be 
6. Programmatic Environmental Impact Statement 

6-14 Federal Coal Program Programmatic EIS January 2017 

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explored in the PEIS. As has been suggested by commenters, the BLM 

could also theoretically account for carbon-based externalities through 

changes to rental rates or bonus bids. The BLM has determined that 

using royalty-based changes would directly connect impacts to the coal 

production and consumption—the activities that generate 

externalities—whereas rental rates are denominated in acres, and 

bonus bids are dependent on upfront estimates of total coal production. 

Consideration will be given to the appropriateness of accounting for 

individual segments of, or the full lifecycle emissions of, CO2 from coal. 

This includes the upstream carbon-related impacts associated with coal 

production, such as methane released during mining, and the midstream 

and downstream carbon-related impacts associated with transportation 

and combustion. For context, in their assessment of royalty rate 

adjustments to account for upstream externalities in coal production, 

the Institute for Policy Integrity estimated surface mine royalties would 

increase from 12.5 percent to 18.7 percent, and underground mine 

royalties would increase from 8 percent to 28.7 percent when 

accounting for the social cost of methane emissions from coal 

production.193 Their analysis suggested a surface mine royalty of 82.6 

percent when incorporating environmental and social externalities from 

coal transportation.194 Royalty charge estimates increased higher still 

when the social cost of carbon related to coal combustion was 

internalized in other studies. 

The BLM’s consideration of the external costs associated with coal may, 

among others, rely on estimates for CO2 and methane from the Federal 

Interagency Working Group on the Social Cost of Carbon.195 The 

estimates of the social cost of carbon vary over time. Thus, in order to 

apply the social cost of carbon to Federal coal, analysis will be needed 

to link coal production and/or combustion to the social cost of carbon 

or social cost of methane specific to that year. 

As this option results in higher prices for coal, it is likely to result in 

decreased Federal coal production and, therefore, greenhouse gas 

 

193 Foley, J. H. and P. Howard. 2016. Illuminating the Hidden Cost of Coal. New York University School of Law 

Institute of Policy Integrity. p. A-13. Available at http://policyintegrity.org/files/publications/ 

Hidden_Costs_of_Coal.pdf 

194 These royalty percentages pertain to mine mouth prices, but constitute a much smaller percentage of the 

delivered price of coal that informs power plant’s fuel purchase decisions.

195 Interagency Working Group on Social Cost of Greenhouse Gases. 2016. Addendum to the Technical Support 

Document on Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866: Application of 

the Methodology to Estimate the Social Cost of Methane and the Social Cost of Nitrous Oxide. Participation by 

the Council of Economic Advisers, Council on Environmental Quality, Department of Agriculture, Department of 

Commerce, Department of Energy, Department of the Interior, Department of Transportation, Department of the 

Treasury, Environmental Protection Agency, National Economic Council, Office of Management and Budget, Office 

of Science and Technology Policy. August 2016. Available at https://www.whitehouse.gov/sites/default/files/omb/ 

inforeg/august_2016_sc_ch4_sc_n2o_addendum_final_8_26_16.pdf 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-15

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emissions, but as a price mechanism it has no pre-determined CO2

emissions or coal production outcomes, and levels can be expected to 

vary based on future market conditions and the availability of 

substitutes. Higher Federal coal prices may lead to increased nonFederal coal consumption that has similar lifecycle CO2 emissions, which 

could partially offset some of the climate-related benefits to reduced 

Federal coal consumption. The environmental effectiveness of a royalty 

rate increase or adder would be largely contingent on the degree to 

which the substitute fuel sources are less carbon intensive (e.g., natural 

gas-fired generation or renewable generation) as opposed to similarly 

carbon intensive (e.g., non-Federal coal). The BLM will develop and use 

economic models to assess these substitution dynamics and the impact 

they have on the costs and benefits of any changes. Although there is 

less certainty around CO2 emission under this option, in comparison to 

a carbon budget or other quantity-based option, a price-based 

mechanism would provide greater cost certainty to the coal industry. 

Initial analysis conducted by Vulcan Philanthropy using the IPM model 

suggested a wide range of substitution rates of non-Federal coal for 

Federal coal, largely in the 0.2 to 0.7 range, depending on base case 

assumptions regarding the CPP and the percentage of the social cost of 

carbon incorporated into the royalty rate.196 Two additional studies 

(one using the IPM model) project a small amount of substitution, while 

another study has posited that it may be more significant.197,198,199 The 

BLM will be conducting independent analysis similar to these as part of 

the PEIS. The BLM could also use modeling to test for economic 

efficiency by identifying at what level of royalty rate increase or adder 

the marginal benefit from avoided climate damages is greater than or 

equal to the marginal cost of that royalty adder. 

Another consideration in the design of this option will be downstream 

emissions regulations. For instance, if existing downstream regulation at 

the point of combustion of coal is already addressing carbon 

 

196 A value of 0.2 would suggest that each decrease in a ton of Federal coal production would result in an increase 

of 0.2 tons of non-Federal coals. (Note: on average, non-Federal coals have higher Btu and CO2 content per ton). 

See: 

Vulcan Philanthropy. 2016. Federal Coal Leasing Reform Options: Effects on CO2 Emissions and Energy Markets. 

Fairfax, Virginia: Vulcan Philanthropy/ICF International. January 2016. Available at

http://www.vulcan.com/MediaLibraries/Vulcan/Documents/Federal-Coal-Lease-Model-report-Jan2016.pdf

197 Gillingham, K, J. Bushnell, M. Fowlie, M. Greenstone, A. Krupnick, C. Kolstad, A. Morris, R. Schmalensee, and J. 

Stock. 2016. “Reforming the US Coal Leasing Program”. Science 354(6316):1096-1098. Available at 

http://science.sciencemag.org/content/354/6316/1096 

198 Gerarden, T., W. S. Reeder, and J. Stock. 2016. Federal coal program reform, the Clean Power Plan, and the 

interaction of upstream and downstream climate policies. National Bureau of Economic Research Working Paper 

22214. Cambridge, Massachusetts. Available at http://scholar.harvard.edu/files/stock/files/fedcoal_cpp_v9.pdf 

199 Krupnick, A., J. Darmstadter, N. Richardson, and K. McLaughlin. 2015. Putting a carbon charge on federal coal: 

legal and economic issues. Resources for the Future Discussion Paper 15-13. Washington, DC. Available at 

http://www.rff.org/research/publications/putting-carbon-charge-federal-coal-legal-and-economic-issues 
6. Programmatic Environmental Impact Statement 

6-16 Federal Coal Program Programmatic EIS January 2017 

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externalities (partially or fully) through Federal or State regulatory 

initiatives, or if there is carbon capture and sequestration at the point of 

combustion, then those impacts could be netted out against any 

assumed social cost of carbon before converting into an adder as 

suggested by commenters. One such final downstream regulation is the 

CPP, which regulates CO2 from existing power plants and, in effect, 

causes the internalization of a portion of the social cost of carbon. 

Because this downstream regulation partially captures the social cost of 

carbon, optimal upstream policies reflecting the social cost of carbon 

could be less than 100 percent of the full social cost of carbon to 

account for the CPP’s effects. 

With these substitution effects and downstream regulations in mind, 

some commenters have suggested only incorporating a percentage of 

the social cost of carbon into any royalty adjustments.200,201 However, 

the percentages used in these studies was illustrative and would require 

further refinement by the BLM. For example, research by Kenneth 

Gillingham and James Stock found that a carbon adder accounting for 20 

percent of the social cost of carbon would amount to between $15 and 

$20 per ton for Powder River Basin coal.202 Relative to current coal 

prices and the current surface mining royalty of 12.5 percent, this would 

equate to a royalty rate of roughly 160 percent to 210 percent. 

The BLM may also consider as part of the PEIS opportunities for 

directing increased revenue streams to address climate adaptation and 

preparedness practices (e.g., develop and implement comprehensive 

climate adaptation plans, update stormwater infrastructure, and wildfire 

programs). Opportunities to direct revenue streams may require 

recommendations to Congress for statutory amendments. 

2. Compensatory Mitigation: The BLM will consider adopting 

requirements for the use of compensatory mitigation to offset the 

greenhouse gas emissions and climate change impacts associated Federal 

coal production and use. According to the Department of the Interior’s 

Departmental Manual chapter on implementing mitigation, 

compensatory mitigation is defined as means to compensate for 

remaining unavoidable impacts after all appropriate and practicable 

avoidance and minimization measures have been applied, by replacing or 

 

200 Vulcan Philanthropy. 2016. Federal Coal Leasing Reform Options: Effects on CO2 Emissions and Energy 

Markets. Fairfax, Virginia: Vulcan Philanthropy/ICF International. January 2016. Available at

http://www.vulcan.com/MediaLibraries/Vulcan/Documents/Federal-Coal-Lease-Model-report-Jan2016.pdf 

201 Gerarden, T., W. S. Reeder, and J. Stock. 2016. Federal coal program reform, the Clean Power Plan, and the 

interaction of upstream and downstream climate policies. National Bureau of Economic Research Working Paper 

22214. Cambridge, Massachusetts. Available at http://scholar.harvard.edu/files/stock/files/fedcoal_cpp_v9.pd 

202 Gillingham, K. and J.Stock. 2016. Federal Minerals Leasing Reform and Climate Policy. Hamilton Project Policy 

Proposal 2016-07. December 8, 2016. Available at https://www.brookings.edu/wpcontent/uploads/2016/12/es_20161208_federal_minerals_leasing_reform_and_climate_policy_pp.pdf 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-17

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providing substitute resources or environments through the 

restoration, establishment, enhancement, or preservation of resources 

and their values, services, and functions. Impacts are authorized 

pursuant to a regulatory or resource management program that issues 

permits and licenses, or otherwise approves activities.

203 

Under this option, the BLM could receive compensation for unavoidable 

impacts associated with carbon-based externalities from lessees in the 

form of a fee paid at lease issuance based on the units of coal produced. 

Once the fee is paid, the BLM could assume responsibility for ensuring 

that the desired outcomes of compensatory mitigation are achieved. 

This approach has been used by the BLM in solar development and is 

proposed to be used in oil and gas development in the Northeastern 

National Petroleum Reserve in Alaska. Through the PEIS, the BLM will 

look at ways to calculate mitigation fees for unavoidable carbon-related 

impacts and ways to invest the fees collected. Alternately, under this 

option, the BLM could approve transactions proposed by lessees that 

would achieve the desired outcome of compensatory mitigation, but for 

which projects were carried out by private businesses, non-profits, or 

state or local agencies. This approach has been used under the 

Endangered Species Act and Clean Water Act as an efficient way to 

provide appropriate and measurable benefits to a resource that has 

been negatively affected through a proposed action. 

Suggestions made through scoping comments on ways to spend 

compensatory mitigation funds include carbon offsets, carbon 

sequestration, climate adaption, and community resilience. As with 

option #1, Royalty Rate Accounting for Externalities, a compensatory 

mitigation fee would generate revenue. Careful consideration will be 

given to which carbon-related externalities should be mitigated for: 

upstream, or upstream and downstream. Another consideration in the 

design of this option will be existing regulations for downstream 

emissions. Like a royalty rate increase or royalty adder, compensatory 

mitigation may result in substitution from Federal to non-Federal coal 

and/or other energy sources. This substitution effect would need to be 

incorporated into BLM’s analysis. In comparison to a royalty rate 

increase or carbon adder, this approach may offer the BLM the ability to 

direct how mitigation dollars are spent. 

3. Carbon Budget: The BLM will consider establishing a carbon budget 

to guide Federal coal leasing in an effort to limit the amount of 

greenhouse gas emissions associated with Federal coal production. 

Under this quantity based option, the BLM would offer leases in 

 

203 Department of the Interior. 2015. Departmental Manual Part 600 Public Land Policy, Chapter 6 Implementing 

Mitigation at the Landscape-scale, Section 6.4.C. October 2015. Available at 

https://www.doi.gov/sites/doi.gov/files/uploads/TRS%20and%20Chapter%20FINAL.pdf 
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6-18 Federal Coal Program Programmatic EIS January 2017 

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accordance with an established carbon budget. A carbon budget would 

reflect the estimated annual volumes of CO2 from Federal coal that align 

with US climate goals (see Section 5.4.6) and give consideration to the 

role of Federal coal in the emissions profile. Under this option, the BLM 

would identify the amount of Federal coal production and desired 

additional leasing over a specified time period that would be consistent 

with current national greenhouse gas emission reduction goals. Like a 

royalty rate increase or royalty adder, the carbon budget approach may 

result in substitution from Federal to non-Federal coal and/or other 

energy sources, so reducing federal leasing by a given amount may not 

lead to a commensurate reduction in greenhouse gas emissions. This 

substitution effect would need to be incorporated into BLM’s analysis. 

In comparison to a royalty rate increase or royalty adder approach to 

addressing carbon-based externalities, a carbon budget approach would 

not link the climate cost of coal to consumption or provide cost 

certainty to industry. 

In November 2016, the White House released its Mid-Century Strategy 

for Deep Decarbonization, which lays out the long-term pathways to 

achieve reductions in net economy-wide emissions of 80 percent below 

2005 levels by 2050.204 This is consistent with the global ambition 

necessary to avoid most costly climate impacts and risks by meeting the 

long-term Paris Agreement aim of limiting the increase in the global 

average temperature to well below 2 degrees Celsius. Other studies 

have estimated that the US will have to reduce emissions an average of 

83 percent below 2005 levels by 2050 (to do its part in limiting the 

concentration of greenhouse gases in the atmosphere to around 450 

parts per million of CO2).205 

Studies acknowledge there are multiple potential pathways to a 2 

degree compliance scenario, and there is not a single coal production 

level specific to these broader climate goals at a given point in time. 

The BLM may consider a carbon budget that is commensurate with 

Federal coal’s appropriate contribution to meeting economy-wide 

greenhouse gas emission reduction targets. The BLM may also consider 

phasing in a budget over time to reduce the economic impact to coal 

producing regions. Furthermore, the BLM could analyze alternative 

carbon budgets that strive to align with other metrics such as EIA’s 

projected demand for coal in its reference case scenario, or the 

anticipated amount of coal demand when social cost of methane and/or 

social cost of carbon dioxide are internalized into its price. 

Establishment of any carbon budget would have to consider the amount 

 

204 The White House. 2016. US Mid-Century Strategy for Deep Decarbonization. November 2016. p.26. Available 

at https://www.whitehouse.gov/sites/default/files/docs/mid_century_strategy_report-final.pdf 

205 See International Energy Agency. 2015. Energy and Climate Change. p.151. Available at 

publication/WEO2015SpecialReportonEnergyandClimateChange.pdf 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-19

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of coal already available under lease, production capacity, demand, and 

substitution effects. 

Leasing per a carbon budget implies the need for a strategic leasing plan 

that guides how coal resources will be allocated overtime in a given 

region or nationally (see Improve Resource Protection & Management 

#2). It also would likely have to be coupled with a modified bidding 

system in order to allocate the coal per the budget as discussed under 

Improve Return #6. 

4. Methane Emissions: The BLM will consider opportunities to address 

methane emissions associated with coal mining operations through the 

PEIS. This includes creating incentives for operators to capture waste 

mine methane (e.g., for free on-lease use, or capture, storage and sale 

to the market). The BLM initiated rulemaking through an Advanced 

Notice of Proposed Rulemaking for waste mine methane use or capture 

in April 2014 that considers the capture of waste mine methane, for use 

or sale, that would otherwise be vented.206 This proposed rulemaking 

asked for comments and suggestions that might assist the agency in the 

establishment of a program to capture, use, or destroy waste mine 

methane that is released into the mine environment and the 

atmosphere as a direct result of underground coal mining operations. 

As suggested in scoping comments, the BLM will consider incorporating 

some of these concepts into the PEIS. 

5. No New Leasing: The BLM will fully analyze a no new leasing 

alternative as part of the PEIS as a means to reduce greenhouse gas 

emissions. Under this alternative, the BLM would issue no future leases 

for Federal coal with the exception of lease modifications within the 

defined acreage limitations; existing coal already under lease would not 

be impacted. Commenters have raised differing opinions on the BLM’s 

legal authority with respect to ceasing all leasing of Federal coal. As part 

of the PEIS, the BLM will examine its statutory authority regarding 

implementing a no new leasing alternative and will consider alternative 

ways this option may be accomplished. 

This alternative will require modeling and analysis of substitution, or 

“leakage,” effects to determine net impacts on greenhouse gas emissions 

and climate change. For example, in the study entitled “How Would 

Phasing Out US Federal Leases for Fossil Fuel Extraction Affect CO2

Emission and 2 Degree Celsius Goals?” the authors concluded that if the 

Federal government stopped all new leasing and did not renew nonproducing leases, 3.1 QBtu of Federal coal would not be extracted that 

 

206 BLM. 2014. Waste Mine Methane Capture, Use, Sale, or Destruction. Proposed Rule. Federal Register 79 (82): 

23923. April 29, 2014. Available at https://www.gpo.gov/fdsys/pkg/FR-2014-04-29/pdf/2014-09688.pdf 
6. Programmatic Environmental Impact Statement 

6-20 Federal Coal Program Programmatic EIS January 2017 

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otherwise would be between now and 2030.207 In terms of greenhouse 

gas emission reductions, assuming CPP implementation, the authors 

found that leasing restrictions would reduce CO2 emissions in 2030 

from coal by about 107 million metric tons of CO2, but increased use of 

gas would increase emissions by about 36 million metric tons of CO2, 

resulting in a net reduction of 71 million metric tons of CO2. Supporting 

modeling showed that approximately 60 percent of the decreased 

Federal coal production would be made up by increased production in 

the Illinois Basin and (to a lesser extent) Appalachia. The resulting 

increased coal prices also led to some substitution by gas in domestic 

power systems, which also reduced emissions. 

The BLM could consider including a conditional no new leasing option in 

which the BLM would issue new and renewed leases conditioned only 

upon a demonstration that the United States is on track to meet its 

economy-wide carbon reduction goals. If current emissions and 

projected emission levels did not suggest that the United States was on 

track to meet its emissions reduction goals, such as, for example, an 80

percent reduction from 2005 levels by 2050, then the BLM could 

withhold all new and renewed Federal leases on coal. If the United 

States were meeting or exceeding the economy-wide percent reduction 

goals for 2050, then new and renewed coal leasing could continue with 

no need for any climate-based royalties or budgets discussed in other 

options. 

Improve Resource Protection and Management 

The BLM will consider options aimed at improving resource protection and 

management, beyond the climate considerations described previously. These 

options will be analyzed to determine effectiveness at avoiding, minimizing, 

and/or mitigating impacts on resources of concern. This includes impacts on 

natural resources and communities as well as impacts related to public health. 

1. Unsuitability Criteria: In accordance with the BLM’s coal leasing 

regulations (43 CFR, Subparts 3420.1-4[a]), coal cannot be leased until it 

has been evaluated in a comprehensive land use plan or land use 

analysis. As part of the planning process for coal resources, the BLM 

must identify areas acceptable for further consideration for leasing using 

four screening procedures (see Section 5.8.1 for more information). 

Commenters expressed concern that the BLM does not consistently 

apply these screens at the land use plan level however. As part of the 

PEIS, the BLM will identify mechanisms to improve the application of 

these screens, which include the 20 defined unsuitability criteria, in 

 

207 Erickson, P. and M. Lazarus. 2016. How would phasing out US federal leases for fossil fuel extraction affect CO2 

emissions and 2°C goals? The Stockholm Environmental Institute. 2016 Working Paper. Available 

at https://www.sei-international.org/mediamanager/documents/Publications/Climate/SEI-WP-2016-02-US-fossilfuelleases.pdf 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-21

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Resource Management Plans (43 CFR, Part 3461), such as requiring 

documentation and updating plans where this analysis is lacking. 

As part of the PEIS, the BLM will also evaluate and modify as necessary 

the existing 20 criteria listed in the regulations that define areas as 

unsuitable for surface mining (43 CFR, Subpart 3461.5). For example, 

The Wilderness Society in their scoping comment letter suggested that 

the current unsuitability criteria be revised or expanded to include bat 

roosts and colonies, and important greater sage-grouse habitats, 

including priority habitat management areas (PHMA) and sagebrush focal 

areas (SFA).208 In their scoping comment letter, the Center for 

Biological Diversity provided specific suggested modification to 

individual criteria, such as increasing the buffer distance for public 

building or homes to 500 feet in Criterion 3 and including inventoried 

roadless areas in Criterion 4.209 The BLM will consider these 

suggestions as well as others as part of this option. Each of the 

unsuitability criteria contains specific information about exceptions or 

exemptions. As part of the PEIS, the BLM will also evaluate and modify 

as necessary the application of exceptions and exemptions to ensure 

adequate resource protection and consistency in application (43 CFR, 

Part 3461).

2. Strategic Coal Leasing Plans: The BLM will consider the 

development of strategic coal leasing plans as a means to guide Federal 

coal leasing for a given region or nationally. These plans would likely be 

step-downs to (or tiered to) an existing Resource Management Plan. 

However, the opportunity exists to include many of the same decisions 

and considerations in a Resource Management Plan. These strategic 

plans would be developed by the BLM on a reoccurring time frame. 

Many commenters have suggested a 5-year planning horizon for such 

plans, consistent with the Secretary’s leasing program for offshore oil 

and gas. Commenters have also advocated for a regional approach to 

strategic planning in order to recognize the significant differences in 

geology, coal rank and quality, mining conditions, and socioeconomic 

conditions across various coal regions (see Sections 5.4.2 and 5.7.1

for more information). As envisioned, these strategic plans could serve a 

variety of purposes that meet a number of policy objectives. Specific to 

the policy objective of improving resource protection and management, 

these plans could address resource management concerns at a 

landscape scale and potentially incorporate mitigation planning. These 

plans could recommend how much coal should be leased, in what 

 

208 The Wilderness Society. 2016. Scoping comment letter on the Coal PEIS. July 28, 2016. See Volume 2, 

Appendix D. 

209 Center for Biological Diversity. 2016. Scoping comment letter on the Coal PEIS. July 28, 2016. See Volume 2, 

Appendix D. 
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6-22 Federal Coal Program Programmatic EIS January 2017 

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locations, and on what timeline to facilitate management of the Federal 

coal program under a carbon budget (Reduce/Account for Greenhouse 

Gas Emissions #3) and accommodate modified bidding procedures (Fair 

Return #6). These plans could also help streamline future leasing actions 

and provide a mechanism for future decisions to “tier” to or 

incorporate by reference (see Increase Lease Process Efficiency #1). 

3. Accounting for Additional Externalities: The BLM will evaluate the 

impacts of increasing the royalty rate or including an adder for Federal 

coal to account for the environmental and social costs of coal 

production and use beyond carbon-based externalities. These 

externalities may include, but are not limited to, public health, safety, air 

quality, water quality, and wildlife impacts. Similar to Option #1, Royalty 

Rate Accounting for Externalities, an important consideration in the 

design of this option is what externalities at what point in the coal 

lifecycle to account for (i.e., upstream, or upstream and downstream). 

Coordination will be needed with many other agencies to avoid 

duplicate accounting for these externalities and to establish dollar values 

for impacts that are not easily quantified. 

Inclusion of all of these values is likely to increase the cost of Federal 

coal substantially. For example, the study entitled “Full Accounting of 

the Life Cycle of Coal,” published by the New York Academy of 

Sciences, provided an estimate for all lifecycle externalities (upstream 

and downstream) related to Federal and non-Federal coal, including 

carbon-related externalities that ranged from $175 to $523 billion in 

2008 dollars.210 The authors point out that their review was limited by 

the omission of many environmental, community, mental health, and 

economic impacts that are not easily quantifiable or monetized. The 

BLM will develop a similar calculation for both upstream and 

downstream externalities specific to Federal coal production and use. 

As with other options, the BLM will use modeling and analysis to 

determine the impact of coal price increases on Federal coal 

production. With increased costs, there is also the potential for 

switching to non-Federal coal or other energy sources, which could 

have a net effect on impacts and externalities associated with energy 

generation. Modeling and analysis will be needed to determine the 

projected level of substitution associated with various price increases on 

Federal coal. With these factors in mind, the BLM may consider applying 

only a percentage of the externality costs as a component of this option. 

4. Applicant Qualifications: The BLM will consider strengthening the 

self-certification requirements for companies bidding on leases (43 CFR, 

 

210 Epstein, P. R. et al. 2011. “Full cost accounting for the life cycle of coal”. Ann. N.Y. Acad. Sci. 1219(2011):73-98. 

Available at http://www.chgeharvard.org/sites/default/files/epstein_full%20cost%20of%20coal.pdf
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-23

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Subparts 3472.1-2[e][2]). As suggested in comments, requirements to 

be evaluated should include prohibiting leasing to self-bonded 

companies, ensuring sufficient financial resources, ensuring companies 

have not been cited for major violations of environmental regulations in 

connection with other operations, and verifying companies have been 

fulfilling reclamation obligations in connection with other operations. 

This option would require substantial coordination between the BLM, 

OSMRE, and the states to obtain this information on companies before 

they bid on leases. 

5. Environmental Protections: The BLM will consider improving 

mechanisms that apply environmental protections in the form of 

stipulations (e.g., to reduce groundwater depletions, conduct breeding 

bird surveys, establish a monitoring program to assess mining impacts, 

and address any adverse impacts on surface resources from subsidence 

as a result of underground mining) to existing leases. The BLM currently 

has the authority to modify the terms and conditions of a lease at lease 

readjustment. This occurs upon the expiration of the initial 20-year 

lease period and any 10-year period thereafter (30 USC, Subsection 

207[a]; 43 CFR, Subpart 3451.1[a][1]). The BLM also has the authority 

to apply additional stipulations to existing leases if the leases are 

modified and additional acreage is added (43 CFR, Subpart 3432.3). 

6. Regional Mitigation Strategies: Commenters suggested that the 

BLM develop regional mitigation strategies for existing and new coal 

development to address environmental and public health impacts. 

Regional mitigation strategies identify and facilitate mitigation 

opportunities at the regional scale, allowing for pre-planning for 

mitigation opportunities. Guidance on preparing regional mitigation 

strategies is included in BLM Manual Section 1794.211 Where the BLM 

anticipates large-scale development, regional mitigation strategies can be 

an effective tool to increase permitting efficiency and financial 

predictability for applicants by studying potential mitigation needs and 

opportunities on both BLM and non-BLM-administered lands, which can 

help to inform subsequent permits and authorizations. Regional 

mitigation strategies can also enhance the ability of Federal and state 

governments, tribes, nongovernmental organizations, and resource 

users to invest in larger-scale mitigation efforts through prioritization of 

investments and pooling of financial resources. The BLM will consider its 

existing authority with respect to environmental and public health 

impacts and determine if the concept of regional mitigation strategies 

could be applied to the Federal coal program to further the goal of 

improving resource protection and management. This option will 

 

211 BLM 2013. BLM Manual Section 1794. Available at https://www.blm.gov/sites/blm.gov/files/uploads/BLM_MS1794%20Mitigation%20FINAL.docx 
6. Programmatic Environmental Impact Statement 

6-24 Federal Coal Program Programmatic EIS January 2017 

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require close coordination with the OSMRE to identify appropriate 

mitigation actions.

7. Best Management Practices: The BLM will consider the use of best 

management practices to meet resource protection goals for the 

Federal coal program. Best management practices are state-of-the-art 

mitigation measures to be applied on a site-specific basis to reduce, 

prevent, or avoid adverse environmental or social impacts. The BLM 

often applies best management practices in the context of oil and gas 

development and will evaluate the use of best management practices to 

meet resource protection goals in the coal leasing and management 

context. These best management practices may be incorporated as 

stipulations in individual new leases as appropriate. Best management 

practices would serve a similar purpose as design features, which were 

suggested by some commenters as an option to protect resources. 

Increase Lease Process Efficiency 

The BLM will consider options that are intended to improve the lease process 

itself. A number of commenters expressed concern over the time it takes to 

obtain a Federal coal lease and what they perceive as redundancies in the 

process. These options will be analyzed to determine the degree to which the 

BLM can increase the efficiency of the lease process while maintaining the 

integrity and intent. 

1. Strategic Coal Leasing Plans: As discussed under the policy 

objective Improve Resource Protection and Management, the BLM will 

consider the development of strategic coal leasing plans as a means to 

guide Federal coal leasing for a given region or nationally. These plans 

would likely be step-downs to (or tiered to) an existing Resource 

Management Plan. However, the opportunity exists to include many of 

the same decisions and considerations in a Resource Management Plan. 

These strategic plans would be developed by the BLM on a reoccurring 

time frame. Many commenters have suggested a 5-year planning 

horizon for such plans, consistent with the Secretary’s leasing program 

for offshore oil and gas. Commenters have also advocated for a regional 

approach to strategic planning in order to recognize the significant 

differences in geology, coal rank and quality, mining conditions, and 

socioeconomic conditions across various coal regions (see Sections 

5.4.2 and 5.7.1 for more information). As envisioned, these strategic 

plans could serve a variety of purposes that meet a number of policy 

objectives. Specific to the policy objective of increasing lease process 

efficiency, these plans could be designed to help streamline future 

leasing actions, providing a mechanism for future decisions to “tier” to 

or incorporate by reference addressing regional issues that tend to be 

cumulative in nature, such as air quality and climate change. In addition, 

these plans could address resource management concerns at a 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-25

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landscape scale and potentially incorporate mitigation planning (see 

Improve Resource Protection and Management #2). These plans could 

recommend how much coal should be leased, in what locations, and on 

what timeline to facilitate management of the Federal coal program 

under a carbon budget (Reduce/Account for Greenhouse Gas Emissions 

#3) and accommodate modified bidding procedures (Fair Return #6). 

2. Pre-Application Process: The BLM will consider creating a preapplication process in which lease applicants would be required to 

complete some work prior to the BLM accepting an application (e.g., 

Qualified Surface Owner consent/identification). This would be intended 

to help reduce time delays that take place after an application is 

received. 

3. Standardized Lease Application Form: The BLM will consider 

establishing a standardized lease application form to include minimum 

requirements found in 43 CFR, Subparts 3425.1-7 and other 

requirements, as determined appropriate. The BLM will also consider 

developing an electronic platform for the submission of applications. 

This could improve the consistency and efficiency of the application 

process. 

4. Single Fair Market Value Team: The BLM will consider establishing 

a single team nationwide that conducts the FMV calculations for all 

offices. This is expected to bring a higher level of consistency and 

efficiency to the process. This work is currently carried out by a mix of 

field and state office personnel. This team would prepare the geologic, 

engineering, economic, and valuation reports to support the estimate of 

FMV associated with a coal tract proposed for leasing. 

Chapter 2 of the BLM’s Coal Evaluation Handbook, H-3073-1 describes 

evaluation team members and their roles in the estimate of FMV. 

Secretarial Order 3300 established that the Department of the Interior, 

OVS has the sole responsibility for all real estate valuation functions of 

the BLM. Based on recent GAO/OIG recommendations, the BLM and 

OVS revised the Coal Evaluation Handbook (H-3073-1) to establish the 

procedures under which OVS reviews the BLM’s FMV estimates to 

assure compliance with all applicable guidance and professional 

standards. 

5. Eliminating Redundant Processes: The BLM will work with other 

agencies to evaluate means for eliminating identified overlapping 

requirements and redundant processes associated with the Federal coal 

leasing and permitting process. There are existing interagency 

memorandums of understanding that outline the roles and 

responsibilities of the various agencies involved in Federal coal activities. 

The OSMRE is the Federal agency with the primary responsibility to 
6. Programmatic Environmental Impact Statement 

6-26 Federal Coal Program Programmatic EIS January 2017 

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administer programs that regulate surface coal mining and reclamation 

operations in accordance with SMCRA and with oversight over state 

RAs. The state RAs in primacy states have primary responsibility to 

administer and regulate surface coal mining operations within their 

jurisdiction subject to the OSMRE’s oversight. The OSMRE also is 

responsible for providing the Mineral Leasing Act mining plan 

recommendations to the Assistant Secretary of the Interior, Land and 

Minerals Management. The Forest Service also has jurisdictional 

responsibilities (i.e., they must provide consent or concurrence to the 

BLM) when coal is proposed for leasing or exploration on National 

Forest System lands. Both Federal agencies, as well as state and tribal 

RAs, may participate as cooperating agencies on the BLM’s NEPA 

analysis for a given coal lease and use that analysis (e.g., through tiering 

or incorporation by reference) to prepare a decision for actions under 

their jurisdiction. 

6. Improve Transparency: The BLM will continue to seek opportunities 

to improve transparency associated with the Federal coal leasing 

process. This work has already been initiated through the development 

of an Instruction Memorandum expected to be finalized in early 

calendar year 2017. In accordance with that Instruction Memorandum, 

state offices are directed to maintain on their publicly accessible 

websites information regarding: 

a. Lease and lease modification applications covered by one of the 

exceptions to the Pause 

b. Coal leasing information including the number of coal leases that 

are currently in effect; the total acreage under lease; the 

number of sales held in each fiscal year, including both 

successful and unsuccessful lease sales; and noncompetitive 

lease modifications 

c. Exploration licenses and licensing applications 

d. Previously granted and pending royalty rate reduction 

applications. 

These policies may be further modified through the PEIS and formalized as 

part of the proposed program reform. These options may be implemented 

without rulemaking. 

6.2.2 Development of Alternatives 

The BLM will conduct an evaluation of the options in Table 6-1. Once the 

benefits, impacts, and overall feasibility of the various options are understood, 

the BLM will be better equipped to blend the options into reform alternatives 

for the Federal coal program and consider their combined impacts. Program 

alternatives will be analyzed in a comparative way in the Draft PEIS to determine 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-27

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their overall impact on the energy markets, energy prices, socioeconomics, and 

the environment as described in more detail in Section 6.4. 

The BLM believes that there are a number of the options that represent more 

modest reforms that could be combined with almost any combined option 

package or future alternative, or implemented as standalone actions. These 

options represent beneficial program modernization activities and good 

government practices. 

For fair return, these include FMV determination process changes aimed at 

transparency and consistency, limiting the use of royalty rate reductions and 

improving the transparency associated with the use of royalty rate reductions, 

rental rate adjustments to reflect inflation, minimum bonus bid adjustments to 

reflect inflation, and evaluation of current performance bonding amounts. For 

greenhouse gas emissions, this includes creating incentives for methane capture. 

For resource protection and management, this includes strengthening 

requirements for companies bidding on leases, all of which would require 

coordination with the OSMRE. The requirements include prohibiting leasing to 

self-bonded companies, ensuring sufficient financial resources, ensuring 

companies have not been cited for major violations of environmental regulations 

in connection with other operations, and verifying companies have been fulfilling 

reclamation obligations in connection with other operations. It also includes 

developing best management practices for resource protection and improving 

planning to avoid land use conflicts, such as through the modification and 

improved application of unsuitability criteria or through the development of 

strategic coal leasing plans. For lease process efficiency, these include 

standardizing lease application forms, developing an electronic platform for the 

submission of applications, working with other agencies to evaluate means for 

eliminating redundant processes, and improving transparency. 

At the Secretary’s direction in connection with Order 3338, the BLM is in the 

process of developing guidance to implement several of these improvements. 

Additional reforms may be implemented prior to completion of the Final PEIS if 

further analysis supports taking action on a more expedited timeframe. 

To demonstrate how the various options could be combined to develop 

alternatives in the PEIS, the BLM sets out three possible option combination 

packages. Because each option presents its own range of analytic issues and 

because that complexity may be compounded by interactions among the reform 

options if they are implemented in combination, additional analysis is needed 

before these or other combinations of options can be included as alternatives 

for consideration in the PEIS. The Draft PEIS also will analyze a “no action” and 

a “no leasing” alternative. 
6. Programmatic Environmental Impact Statement 

6-28 Federal Coal Program Programmatic EIS January 2017 

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Possible Option Combination Package #1 

1. Fair Return 

Increase the royalty rate to reflect the fair return for coal produced on 

Federal land. The BLM would identify the most appropriate metric 

and corresponding royalty rate for Federal coal, reflecting on 

analysis already conducted by other groups such as the CEA. The 

BLM would also assess the net impact on revenues from such 

changes, including any potential reduction in bonus bids and 

production. 

2. Climate Change/Resource Protection 

Require compensatory mitigation for Federal coal leases. The BLM 

would require lessees to carry out or fund activities that 

proportionally offset climate-related impacts, including through 

investment in a fund managed by an entity that takes on the liability 

to proportionally offset those greenhouse gas emissions and 

climate-related impacts. Contribution to the fund would be tied to 

the unit of coal produced. Funds could be used for activities 

including, but not limited to, carbon offsets, carbon sequestration, 

climate adaptation, and community resilience. 

3. Leasing Process 

a. Develop strategic leasing plans and utilize modified inter-tract bidding on 

a $/ton or $/Btu basis. Strategic leasing plans would be developed 

based on regular reviews of projected domestic coal demand (e.g., 

over a 5-year window) and the role of Federal coal resources in 

meeting domestic energy needs. These plans would set lease sales 

on a regular schedule to accommodate a modified inter-tract 

bidding system. The BLM would determine a maximum tonnage of 

coal or maximum number of Btus to be leased consistent with 

projected demands. Under a modified inter-tract leasing process, all 

interested companies would bid among themselves for the right to 

produce a specified quantity of coal in the location of their choice, 

assuming it is suitable for mining and consistent with the approved 

land use plan and strategic leasing plan. To the extent that auctions 

become more competitive through the use of modified inter-tract 

bidding, resulting in increased bonus bids, the need for a higher 

royalty rate could be revisited on a periodic basis. 

b. Develop regional mitigation strategies. Regional mitigation strategies 

would be developed by the BLM to identify and facilitate 

compensatory mitigation opportunities at the regional scale, 

allowing for pre-planning for, and advanced investment in, mitigation 

opportunities. 

4. Community Assistance 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-29

Scoping Report 

a. Explore use of compensatory mitigation funds to invest in affected 

communities experiencing reduced coal production. The BLM would 

seek to use compensatory mitigation funds to invest in economic 

diversification and workforce development efforts. 

b. Direct a portion of Federal coal revenues to community assistance. The 

BLM would seek to secure Congressional authorization to direct a 

portion of increased Federal coal revenues toward investments in 

impacted communities that support economic diversification, job 

training, mine reclamation, and other community priorities. 

Possible Option Combination Package #2 

1. Fair Return 

Increase the royalty rate to reflect the fair return for coal produced on 

Federal land. The BLM would identify the most appropriate metric 

and corresponding royalty rate for Federal coal reflecting on 

analysis already conducted by other groups. Because a carbonbased royalty adder, as described under 2, could be instituted in 

combination with or independent of a potential royalty rate increase 

based on fair return principles, the BLM will analyze the effects of 

such changes both individually and cumulatively. 

2. Climate Change/Resource Protection 

Apply a royalty adder to royalty rates to account for carbon-based 

environmental and societal costs of coal production and use ($/ton of 

coal). A royalty adder would tie climate costs directly to 

production/consumption. As a price mechanism, a royalty adder 

would provide price certainty to mining operators and downstream 

purchasers. A royalty adder would apply only to new and renewed 

leases and, therefore, would be necessarily phased in over time. The 

BLM would conduct analysis to identify the most appropriate 

royalty adder taking into account downstream regulations and 

substitution effects, and reflecting on analysis already completed by 

other groups. The BLM would also assess the net impact on 

revenues from such changes, including any potential reduction in 

bonus bids and production. 

3. Leasing Process 

Develop strategic leasing plans and utilize modified inter-tract bidding on 

a $/ton or $/Btu basis. Strategic leasing plans would be developed 

based on regular reviews of projected Federal coal demand (e.g., 

over a 5-year window) and could serve a variety of purposes that 

meet a number of policy objectives, including addressing resource 

management concerns at a landscape level and helping to streamline 

future leasing actions. These plans would set lease sales on a regular 
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6-30 Federal Coal Program Programmatic EIS January 2017 

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schedule to accommodate a modified inter-tract bidding system. 

The BLM would determine a maximum tonnage of coal or maximum 

number of Btus to be leased consistent with projected demands. 

Under a modified inter-tract leasing process, all interested 

companies would bid among themselves for the right to produce a 

specified quantity of coal in the location of their choice, assuming it 

is suitable for mining and consistent with the approved land use plan 

and strategic leasing plan. To the extent that auctions become more 

competitive through the use of modified inter-tract bidding, 

resulting in increased bonus bids, the need for a higher royalty rate 

could be revisited on a periodic basis. 

4. Community Assistance 

a. Direct a portion of Federal coal revenues to community assistance. The 

BLM would seek to secure Congressional authorization to direct a 

portion of increased Federal coal revenues toward investments in 

impacted communities that support economic diversification, job 

training, mine reclamation, and other community priorities. 

b. The states’ portion of increased revenues would be available to invest in 

impacted communities experiencing reduced coal production. The 

additional revenues generated by a royalty rate adder would be split 

with states consistent with current law and could be used by states 

to support economic diversification efforts in communities and 

related activities. 

Possible Option Combination Package #3 

1. Fair Return 

Increase the royalty rate to reflect the fair return for coal produced on 

Federal land. The BLM would identify the most appropriate metric 

and corresponding royalty rate for Federal coal, reflecting on 

analysis already conducted by other groups. The BLM would also 

assess the net impact on revenues from such changes, including any 

potential reduction in bonus bids and production. 

2. Climate Change/Resource Protection 

a. Periodically evaluate and ensure that coal production and associated lifecycle emissions are consistent with the need to reduce net domestic 

greenhouse gas emissions 80 percent below 2005 levels by 2050. This 

tracks to a straight-line reduction from the US 2025 Intended 

Nationally Determined Contribution (INDC),212 and it is also 

consistent with the long-term pathway set forth in the US Mid-

 

212 Actions described by the UNFCCC in December 2015 to achieve the long-term goals of the Paris Agreement: 

to hold the increase in global average temperature to well below 2°C, to pursue efforts to limit the increase to 

1.5°C, and to achieve net zero emissions in the second half of this century. 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-31

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Century Strategy for Deep Decarbonization.213 The BLM would limit 

the amount of Federal coal leased at a given time based on a carbon 

budget. The Federal coal leasing levels would be premised on a 

carbon budget that is commensurate with Federal coal’s appropriate 

contribution to meeting economy-wide greenhouse gas emission 

reduction targets. In other words, the total amount of coal offered 

and made accessible under Federal leases would contain lifecycle 

CO2 emission levels that are less than or equal to the anticipated 

emissions from Federal coal under an INDC strategy.214 The BLM 

would also need to evaluate the effectiveness of applying INDCbased limits to Federal coal leasing if and when no similar limitations 

are applied to substitute non-Federal energy sources to address 

concerns over emissions shifting to non-Federal coal sources. This 

potential shifting to non-Federal coal sources could reduce the 

environmental benefit of such limits (i.e., due to emissions leakage). 

b. Develop strategic leasing plans. Strategic leasing plans would 

incorporate the carbon budget and set lease sales on a regular 

schedule to accommodate a modified bidding system (see 3a below). 

These strategic plans could help meet a variety of policy objectives, 

including addressing resource management concerns at a landscape 

level and helping to streamline future leasing actions. 

3. Leasing Process 

Use modified inter-tract bidding on a $/ton or $/Btu basis. The BLM 

would determine a maximum tonnage of coal or carbon or 

maximum number of Btus to be leased consistent with the defined 

carbon budget. Under a modified inter-tract leasing process, all 

interested companies would bid among themselves for the right to 

produce a specified quantity of coal in the location of their choice, 

assuming it is suitable for mining and consistent with the approved 

land use plan and strategic leasing plan. To the extent that auctions 

become more competitive through the use of modified inter-tract 

bidding, resulting in increased bonus bids, the need for a higher 

royalty rate could be revisited on a periodic basis. 

4. Community Assistance 

Direct a portion of Federal coal revenues to investments in communities 

experiencing economic impacts from reduced coal production. The BLM 

would seek to secure Congressional authorization to direct a 

 

213 The White House. 2016. US Mid-Century Strategy for Deep Decarbonization. November 2016. Available at 

https://www.whitehouse.gov/sites/default/files/docs/mid_century_strategy_report-final.pdf 

214 One way to implement this approach would be for the BLM to use an economy-wide model to estimate least 

cost compliance strategies for meeting INDCs. The BLM could use the model output to derive anticipated Federal 

coal consumption levels over a 20-year period, and then use that level, in conjunction with reserves already under 

lease, as a limit on the amount of reserves that are leased. 
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6-32 Federal Coal Program Programmatic EIS January 2017 

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portion of increased Federal coal revenues toward investments in 

communities that support economic diversification, job training, 

mine reclamation, and other community priorities. 

No Action Alternative 

Under the no action alternative, the Federal coal program would continue to be 

administered in the manner in which it is administered currently. Leasing would 

be conducted through LBA. The current means of determining FMV, royalty 

rate reductions, minimum bonus bids, and rental rates would remain unchanged. 

The no action alternative would not address concerns raised by numerous 

parties about the Federal coal program, including concerns raised by the GAO, 

the OIG, members of Congress, interested stakeholders, and the public. 

No Leasing Alternative 

Under a no leasing alternative, the BLM would issue no new leases for Federal 

coal except for lease modifications within the defined acreage limitations (960 

acres or less215). Existing coal already under lease would not be impacted. 

Administration of existing leases would remain unchanged, including existing 

royalty rates and rental rates. The BLM may also consider combining the no 

new leasing alternative with other reform options aimed at modernizing the 

administration of existing leases as part of separate reform packages or 

alternatives. 

6.2.3 Options Not Carried Forward for Further Analysis 

The following section includes a summary of additional reform options 

suggested through the scoping process that the BLM is proposing not to carry 

forward for analysis in the PEIS. A rationale has been provided as appropriate. 

Many of these options are already undertaken by the BLM, are under the 

authority of another agency, or would not meet the policy objectives outlined in 

BLM’s Need for Federal Action in Section 6.1.1. 

Fair Return 

Comments were submitted suggesting that the FMV calculation for Federal coal 

should be redefined to account for environmental and social costs of coal 

production and use. While the BLM agrees that consideration should be given 

to such costs, the agency does not believe the FMV is the appropriate place for 

this to be applied. FMV is defined at 43 CFR, Subparts 3400.0-5(n) as the 

“amount in cash, or on terms reasonably equivalent to cash, for which in all 

probability the coal deposit would be sold or leased by a knowledgeable owner 

willing but not obligated to sell or lease to a knowledgeable purchaser who 

desires but is not obligated to buy or lease.” The Coal Evaluation Handbook (H3073-1) describes FMV as a determination made by reference to a competitive 

market rather than to personal or inherent value of the property. Therefore, 

the BLM believes accounting for the social and environmental costs of coal to be 

 

215As defined in the Energy Policy Act of 2005 Section 432 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-33

Scoping Report 

produced in the future would be too remote or speculative to include in the 

FMV calculation. Alternatively, the BLM is proposing to consider the 

environmental and social costs of coal production and use as part of an 

increased royalty rate or adder (see Reduce/Account for Greenhouse Gas 

Emissions #1 and Improve Resource Protection and Management #3). 

Other comments made with respect to the FMV calculation asked the BLM to 

consider non-Federal coal, exports, and extraction costs in their calculation 

methods. The BLM’s calculation of FMV already takes these factors into 

consideration. Chapter 3 of H-3073-1 discusses both export coal market data 

and lease-specific comparable sales data requirements, including information 

about private coal property market transactions. 

A number of commenters suggested that the BLM should subject the FMV

calculation to public hearing(s) ahead of the competitive leasing process. The 

BLM’s FMV process currently includes the opportunity for public input as part 

of the information gathering process that goes into the FMV calculation (see 

Section 5.8.2). Because the Mineral Leasing Act requires competitive leasing, 

the BLM believes that opening up the FMV estimate to the public would 

undermine the bidding process, especially on those tracts where only one bid is 

received. 

Some commenters requested that the BLM maintain the existing royalty rates 

and consider reducing the existing royalty rates as a means to increase 

production and, therefore, improve return. The BLM will consider no change in 

the existing royalty rates as part of the no action alternative. An option to 

reduce the royalty rate is not proposed to be carried forward for further 

analysis in the PEIS, however, as royalty rates are already at their statutory 

defined floor (43 CFR, Subparts 3473.3-2). The BLM has determined that this 

option would not meet the object of improving fair return to the American 

taxpayer.

As described in Section 5.4.6, Main Drivers, the demand for coal is driven by a 

variety of complex market and regulatory factors. A simple reduction in the 

current royalty rate on coal would not necessarily lead to increased demand 

levels that offset the revenue loss. Therefore, this may have the impact of 

decreasing return to the Federal taxpayer. Moreover, while more analysis is 

needed, most preliminary qualitative and quantitative assessments suggest 

increasing, not decreasing, royalty rates is the appropriate direction to evaluate 

to enhance FMV and revenues. This is supported by the market projections for 

coal (see Section 5.5).

A number of commenters suggested alternative ways that the value of coal 

production, on which royalties are assessed, should be calculated. Options 

included basing the value of coal production on the final sale price to a power 

plant or other end user or applicable market price; basing the value of coal 

production on the average price of nearby regional coal, the price of nationwide 
6. Programmatic Environmental Impact Statement 

6-34 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

coal, or the price of a substitute in the electricity dispatch order; basing the 

value of coal production on sales prices of coal with similar characteristics from 

both Federal and non-Federal lands; and directly valuing coal production using 

an appraisal approach rather than basing the value on individual sales 

transactions. 

Other comments suggested capping transportation deductions, establishing cost 

of allowable transportation deductions based on the most efficient means of 

transport, or establishing the cost of allowable transportation deductions based 

on observable indices of coal transportation costs per rail mile, rather than selfreported cost numbers. Comments were also raised regarding the elimination 

of coal washing deductions, the practice of selling to affiliates at artificially low 

prices, and take or pay contracts. The BLM has no authority over the valuation 

of coal production for purposes of royalty payments; this is the ONRR’s 

responsibility (see Section 5.2). The ONRR has recently completed rulemaking 

on Consolidated Federal Oil and Gas and Federal and Indian Coal Valuation 

Reform (30 CFR, Parts 1202 and 1206), which will become effective January 1, 

2017. 

In terms of bonus bids, commenters suggested that the BLM should base bonus 

bids on the amount of recoverable coal rather than the amount of coal reserves. 

This is already the case, as the BLM bases the pre-sale FMV on recoverable coal 

estimates. This will be considered as part of the no action alternative. In order 

to provide additional clarity, the BLM will consider revising guidance to ensure 

consistency among states on how to apply recoverable coal estimates. 

Commenters also suggested that the BLM should abandon bonus bids for 

maintenance tracts, and instead employ an adjusted revenue-neutral royalty 

schedule for those tracts. The BLM experimented with this approach in the past 

and found that it did not meet the goals of obtaining fair return for the coal 

resource. If the coal were never produced, there would be no benefit associated 

with issuing a maintenance tract, whereas a bonus bid ensures a return to the 

public. Therefore, this suggestion would be ineffective, as it does not meet the 

purpose and need of the PEIS. 

Commenters suggested that the BLM incorporate into coal leases the authority 

to adjust rental and royalty fees over time. The BLM currently has the authority 

to modify the terms and conditions of a lease, including rental fees and royalty 

rates at lease readjustment (43 CFR, Part 3451). This occurs at the end of the 

20-year primary term and then every 10 years for the life of the lease (43 CFR, 

Part 3451). It should also be noted that royalty rates are assessed on the value 

of coal production, which is determined by the ONRR at the time of the first 

arm’s-length sale (30 CFR, Part 1206). 

Commenters also suggested the BLM should cancel existing leases that are not 

producing. While the BLM is not authorized to cancel an existing lease 

specifically for “not producing,” it can cancel an existing lease for not meeting 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-35

Scoping Report 

the terms and conditions of the lease, which include diligent development (43 

CFR, Subparts 3452.2-1). Therefore enforcing diligent development of existing 

leases will be considered as part of the no action alternative. 

Commenters requested that the BLM modify the time frame over which bonus 

bid payments are made (i.e., over a longer or shorter period of time). This 

option would not impact the overall value of the bonus bid. The BLM has 

decided not to carry this option forward for further analysis, because it does 

not meet any of the objectives stated as part of the purpose and need of the 

PEIS. 

Commenters also suggested that the BLM consider delaying collection of bonus 

bids until mining begins on the leases and allow a royalty credit for the capital 

costs to establish a mining operation to increase competition for bids. The BLM 

has decided not to carry this option forward for further analysis, because it 

does not meet any of the policy objectives stated as part of the purpose and 

need of the PEIS. 

Commenters suggested that the BLM should ban companies from selling coal to 

subsidiaries to depress rates (i.e., captive transactions). This issue is outside of 

the BLM’s authority, but is addressed by the ONRR in the methods by which it 

values coal production. The ONRR has procedures in place to ensure proper 

valuation of coal production sold to affiliates or subsidiaries under non-arm’slength transactions. Effective January 1, 2017, the ONRR amended their 

regulations governing valuation, for royalty purposes, of oil and gas produced 

from Federal onshore and offshore leases and coal produced from Federal and 

Indian leases (81 FR 43337). 

Commenters asked the BLM to consider how the leasing of smaller tracts might 

better ensure the maximum economic recovery of coal (e.g., reduce market 

uncertainties and ensure a higher fair market valuation associated with 

shortened duration of mining operations). Other commenters suggested that 

the BLM only lease 10 years or less of coal reserves under a single lease. The 

BLM already considers the size of the tract and potential amount of reserves as 

part of the leasing process and has the ability to reconfigure tracts prior to lease 

sale. Tract reconfiguration is done to increase competition when another 

existing mine is nearby and to carve out areas not suitable for leasing (e.g., 

raptor nests and cultural sites). The BLM also may reconfigure a LBA tract to 

ensure that Federal coal reserves are not bypassed and the amount of reserves 

is reasonable based on the annual production at that mine. This will be 

considered as part of the no action alternative. 

Commenters suggested two ways to potentially reduce costs with respect to 

the coal leasing process. These included waiving the BLM cost recovery imposed 

during the Federal coal leasing process and not charging lease applicants for the 

third-party NEPA associated with NEPA actions. These suggestions run counter 

to the objective of orderly administration of coal on Federal lands. Without 
6. Programmatic Environmental Impact Statement 

6-36 Federal Coal Program Programmatic EIS January 2017 

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cost recovery, the BLM would have to allocate appropriated budget dollars 

from other priorities for processing coal lease applications. The BLM would also 

have to identify staff to undertake NEPA analyses for leasing actions or allocate 

budget dollars to hire third-party NEPA consultants to undertake this work. 

Given resource limitations, this would have a negative impact on the efficiency 

of the process, which is already the subject of criticism for the length of time it 

takes to complete. 

Reduce/Account for Greenhouse Gas Emissions 

Regarding Social Cost of Carbon, commenters recommend the inclusion of a 

net “social benefit” standard for coal that includes both the social cost of carbon 

and the positive economic benefits of coal jobs and revenue, schools, 

infrastructure, and reliable, low-cost electricity. While the BLM agrees that 

there are benefits associated with the production and use of Federal coal, many 

of these “benefits” are captured in the market value of coal. Additional 

nonmarket benefits can be assessed qualitatively. While not necessarily in the 

form requested by commenters, the PEIS will include consideration of both the 

market and nonmarket values associated with coal (see Section 5.7).

Some commenters suggested the BLM should not allow leasing of Federal coal if 

it is intended to be used for export. It should be noted that exports have 

historically and currently make up a very small part of Federal coal market (see 

Section 5.4.6). Opportunities for exports are limited by the availability of 

export terminals, transportation costs, and global coal prices. Because the BLM 

has very limited, if any, control over where Federal coal is ultimately consumed 

(i.e., coal may change hands multiple times before its final end use), this option 

will not be carried forward for further analysis. The BLM does however identify 

coal export market information during the preparation of the economic 

evaluation report supporting BLM’s FMV estimate (Chapter 3 of H-3073-1), and 

will consider it in the context of evaluating strategic leasing plans that could be 

developed based on regular reviews of projected domestic coal demand (e.g., 

over a 5-year window) and the role of Federal coal resources in meeting 

domestic energy needs. 

A number of commenters emphasized the need to require carbon capture and 

sequestration for coal energy generators, and to invest in carbon capture and 

storage technologies and clean coal technologies. The BLM does not have the 

authority to require any action of coal consumers or dollars to invest in new 

technologies. While not carried forward as an option in the PEIS, it is worth 

noting there are a number of Federal programs in place that target these topics. 

For example, the Department of Energy’s Office of Fossil Energy manages a 

Clean Coal Research and Development program that is focused on developing 

and demonstrating advanced power generation and carbon capture, utilization 

and storage technologies for existing facilities and new fossil-fueled power plants 

by increasing overall system efficiencies and reducing capital costs. Their Carbon 

Capture, Utilization and Storage program advances safe, cost effective, capture 
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January 2017 Federal Coal Program Programmatic EIS 6-37

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and permanent geologic storage and/or use of CO2 and their Advanced Energy 

Systems program focuses on improving the efficiency of coal-based power 

systems, enabling affordable CO2 capture, increasing plant availability, and 

maintaining the highest environmental standards.216

Some commenters stated support for investing in renewable energy programs 

over coal mining operations, due to the decreased environmental impact and 

efforts to mitigate climate change. The promotion of renewable energy 

programs over coal leasing is outside of the scope of the PEIS. The BLM will 

however consider as part of the PEIS analysis the impacts of coal program 

reform alternatives on the larger power sector including other energy sources 

such as wind and solar energy generation (see Section 6.4).

Improve Resource Protection and Management 

Some commenters suggested that the BLM should modify regulations to require 

the application of unsuitability criteria only at the time an applicant submits an 

application for leasing (versus at the Resource Management Plan stage). The 

BLM believes that there are benefits to applying the unsuitability criteria at both 

stages in the process, and the regulations allow for consideration at both levels 

(43 CFR 3461.3-1). The application of unsuitability criteria at the Resource 

Management Plan level allows for landscape-scale land use allocation decisions 

to be made and areas to be identified as unsuitable for coal leasing. Once an 

application has been submitted for an area allocated as suitable for coal leasing, 

the BLM has the obligation to take a second look at the area under 

consideration to determine if any of the unsuitability criteria are triggered based 

on site-specific information. 

Commenters suggested that the BLM should provide clarification around 

“contemporaneous” reclamation and develop rules that require diligent 

reclamation. Commenters also submitted comments suggesting that the BLM 

evaluate alternatives for funding reclamation and post-closure activities. While 

the BLM understands the importance of timely, successful reclamation, the BLM 

does not have authority over the reclamation process associated with Federal 

coal production. This authority is held by OSMRE (see Section 5.2). As 

appropriate, the BLM will work with OSMRE to improve reclamation planning 

and implementation opportunities for Federal coal. 

A larger number of commenters expressed concern about the practice of selfbonding for reclamation requirements and requested amendment to the 

regulations at 30 CFR 800.23 and any other regulations, as appropriate, to 

prohibit self-bonding whenever publicly owned coal is permitted to be mined. 

This is particularly troublesome with the recent rash of bankruptcies among 

many large coal companies. While the BLM is aware of the issues associated 

 

216 Department of Energy, Office of Fossil Energy Clean Coal Research Program. 2016. Clean Coal Research. 

Available at https://energy.gov/fe/science-innovation/clean-coal-research 
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with self-bonding for reclamation, the BLM does not have the authority over 

bonding for reclamation. This authority is held by OSMRE (see Section 5.2) 

and primacy states. OSMRE recently announced its intention to initiate 

rulemaking on the practice of self-bonding.217 As appropriate, the BLM will work 

with OSMRE to improve self-bonding regulations. 

Increase Lease Process Efficiency 

Commenters suggested consolidating the Federal coal leasing and permitting 

process into the hands of fewer agencies. SMCRA prohibits this (30 USC 1211). 

There are inherent differences in the duties of OSMRE and the BLM. To 

combine the agencies would require amending the SMCRA. Further, 

Department of the Interior experience has shown that it is best to keep leasing 

and environmental enforcement separate. For example, the Minerals 

Management Service, which previously managed the nation's natural gas, oil, and 

other mineral resources on the outer continental shelf split into the BOEM, the

Bureau of Safety and Environmental Enforcement (BSEE), and the Office of 

Natural Resources Revenue. In lieu of consolidation, the BLM is proposing to 

consider options to work with other agencies to evaluate means for eliminating 

the overlapping requirements and redundant processes (see Increase Lease 

Process Efficiency #5). 

Commenters suggested the BLM establish specific timelines and procedures for 

the various steps in the leasing process. The BLM’s existing coal regulations (43 

CFR Part 3400) delineate the process for issuing leases (see Section 5.8 on 

Leasing Process). While the BLM agrees that improvements in efficiency may be 

needed (and will be considered as part of the PEIS), past experience with many 

other programs has proven that mandatory timelines often are not effective in 

improving efficiency, therefore this option is not considered further. 

Other 

A large number of commenters discussed the pause on significant new coal 

leasing decisions instituted through Secretarial Order 3338. Some commenters 

expressed support for the coal leasing pause, stating that it should be extended 

or made permanent and reasoned that a sufficient amount of coal has already 

been leased. Other commenters stated opposition to the coal leasing pause, 

stating that it should be removed because it negatively impacts the economy and 

violates laws. The leasing pause does not apply to existing leases and coal 

production activities and is intended to be in place temporarily while the PEIS is 

underway. 

Some commenters stated concern over both the environmental impacts of 

leasing and the economic impacts of delays for specific coal lease applications 

(e.g., Alton Mine, Bull Mountain Mine, and Greens Hollow Coal tract). 

Consideration of specific leasing actions is outside of the scope of the PEIS. The 

 

217 OSMRE Decision on Petition to Initiate Rulemaking, 81 Fed. Reg. 61612 (September 7, 2016). 
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BLM will however consider the full portfolio of existing BLM leasing activities as 

part of the analysis in the PEIS. 

6.3 COMMUNITY TRANSITION CONSIDERATIONS

A central theme in many of the comments raised by stakeholders is concern 

about the implications of current and future coal market conditions. As 

discussed in Section 5.4.5 and reported by the EIA, in 2015, the United States' 

total coal production was roughly 900 million short tons, 10 percent lower than 

in 2014. The 2016 production levels are expected to decrease further, reaching 

levels not seen since the 1970s. Worldwide, demand for coal appears to be 

softening as well, with EIA projections for coal exports (the majority of which is 

metallurgical coal) being relatively flat through 2030, accounting for only 

approximately 8 percent of total US coal production (see Section 5.5.3). As a 

result of the softening of both the domestic and export markets, a number of 

mines in the United States have idled production, several major coal companies 

have entered Chapter 11 bankruptcy, many coal miners have been laid off, and 

coal-dependent communities have suffered. The EIA and other projections of 

future coal production show anticipated continuing declines. 

Commenters have urged the BLM to take these significant market changes into 

account when considering reform options for the Federal coal program. In 

order to make fully informed decisions, stakeholders have requested that the 

BLM determine what the impacts of reform options will be on factors such as 

coal production, energy supply, energy prices, state revenues, and jobs (direct 

and indirect). As discussed in more detail in Section 6.4, the BLM intends to 

evaluate all program alternatives against a set of defined issues for analysis that 

include all of these critical metrics. 

Through the scoping process, stakeholders also provided suggestions to help 

communities currently in transition or communities that may find themselves in 

need of transitioning in the near future. While many of these suggestions do not 

fall under the authority of the BLM’s coal program, the BLM believes they are an 

important part of the larger conversation about coal’s future in the United 

States. The BLM is committed to working with the White House, Congress, and 

other Federal, state, and local agencies throughout the PEIS process to further 

these ideas and to address Federal coal reform in the most comprehensive 

manner possible. The stakeholders’ suggestions are summarized below, and it is 

worth noting that the BLM could seek to secure Congressional authorization to 

direct a portion of increased Federal coal revenues toward such community 

assistance programs. 

 Undertake meaningful collaboration with coal-producing states 

concerning socioeconomic impacts related to Federal coal mining 

 Develop a program to hire mine workers for restoration and 

rehabilitation associated with mining operations 
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 Explore changes to revenue-sharing statutes to improve community 

access to funding for local school and other community priorities 

 Provide communities a comprehensive review of tools to help 

diversify their economies 

 Work to secure Congressional authorization to direct increased 

royalty and rental payments toward worker and community support 

 Establish an Economic Transition Fund that would be sustained by 

an increase in reimbursement fees charged by the Department of 

the Interior when processing coal-related applications 

 Prioritize support and assistance to help communities transition 

(e.g., Secretarial Order) 

 Accelerate the transition to renewable energy production on 

Federal lands, identify new opportunities to use abandoned or 

reclaimed mine lands as renewable energy production sites, and 

work with partner agencies to assist in retraining coal workers for 

the renewable energy industry 

 Provide assistance to help coal miners transition to other jobs 

 Undertake severance tax reform and ensure that taxes that are 

intended to provide funds to invest in economic diversification in 

the coalfields are actually being invested back into coal producing 

counties at a higher rate and in a timely manner 

 Look for ways to ensure coal revenue is reinvested in communities 

to help them break from the boom and bust cycles of fossil fuel 

extraction 

The Power Plus (POWER+) Plan,218 proposed in President Obama’s FY2016 and 

FY2017 budgets, and the Obama Administration’s corollary POWER Initiative 

provide an example of recent efforts by the Federal government to help coal 

communities in transition. 

The POWER+ Plan proposed a range of investments in economic diversification, 

employment and training services, and abandoned mine reclamation targeted to 

coal communities and workers. It also included Federal transfers to rescue the 

solvency of the largest multi-employer pension plan serving retired coal miners 

and their families, and to extend health care coverage to beneficiaries who were 

going to lose their coverage at the end of 2016.219 In addition, it included two 

 

218The White House. 2016. Investing in Coal Communities, Workers, and Technology: The POWER+ Plan. 

Available at https://www.whitehouse.gov/sites/default/files/omb/budget/fy2016/assets/fact_sheets/investing-in-coalcommunities-workers-and-technology-the-power-plan.pdf 

219 The Further Continuing and Security Assistance Appropriations Act of 2017 provided funds to ensure that the 

health care coverage to these beneficiaries was extended until April 30, 2017. Pub. L. No. 114-254 (Dec. 12, 2016). 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-41

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new proposed tax credits to catalyze the deployment of carbon capture, 

utilization, and sequestration (CCUS) technologies in the power sector. 

Starting in 2015, the Administration began in parallel—because the economic 

need was so urgent—the POWER (Partnerships for Opportunity and 

Workforce and Economic Revitalization) Initiative, which is effectively the 

economic and workforce development component of the POWER+ Plan. It 

was a coordinated effort involving ten Federal agencies—including the DOE—

with the goal of effectively aligning, leveraging, and delivering a range of Federal 

economic and workforce development resources to assist communities 

negatively impacted by changes in the coal industry and coal-fired segment of 

the power sector. 

Since October 2015, as part of the POWER Initiative, Federal agencies have 

awarded to date roughly $80 million to support economic and workforce 

development projects in coal- impacted communities in 15 states. These 

projects will catalyze economic diversification in industry clusters ranging from 

advanced manufacturing and agriculture to information technology and tourism 

and recreation.220,221 In addition, in the Consolidated Appropriations Act of 

2016, Congress appropriated OSMRE $90 million for a pilot program in three 

Appalachian states, inspired by a proposal in the POWER+ Plan, to use General 

Treasury funds for the reclamation of abandoned mine land sites in conjunction 

with economic and community development and reuse goals.222

6.4 ISSUES FOR ANALYSIS

According to the BLM NEPA Handbook (Section 6.4), an “issue” is a point of 

disagreement, debate, or dispute with a proposed action based on some 

anticipated environmental effect. Analysis of an issue is necessary to make a 

reasoned choice between alternatives. Based on the input received through the 

scoping process, the BLM has identified the following issues for analysis in the 

PEIS. Each program reform alternative will be evaluated against these issues, and 

a comparative analysis will be presented in the Draft PEIS. Consistent with 

guidance in the BLM’s NEPA Handbook (Section 9.2.9), the BLM will attempt to 

quantify the effects analysis in the PEIS as much as possible. 

 

220 The White House. 2016. Fact Sheet: Administration Announces Additional Economic and Workforce 

Development Resources for Coal Communities through POWER Initiative. October 26, 2016. Available at 

https://www.whitehouse.gov/the-press-office/2016/10/26/fact-sheet-administration-announces-additional-economicand-workforce 

221 The White House. 2015. FACT SHEET: Administration Announces New Workforce and Economic 

Revitalization Resources for Communities through POWER Initiative. October 15, 2015.Available at 

https://www.whitehouse.gov/the-press-office/2015/10/15/fact-sheet-administration-announces-new-workforce-andeconomic 

222 OSMRE. 2016. Guidance for Eligible Projects To Be Funded Under The Abandoned Mine Land Reclamation 

Economic Development Pilot Program For Fiscal Year 2016. Available at 

https://www.osmre.gov/programs/aml/pilotProgramGuidance.pdf 
6. Programmatic Environmental Impact Statement 

6-42 Federal Coal Program Programmatic EIS January 2017 

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 What would be the effect of the alternatives on Federal coal 

production? 

 What would be the effect of the alternatives on other energy 

sources? 

 What effect would the alternatives have on substitution between 

energy sources and between Federal and non-Federal coal?

 What would be the effect of the alternatives on energy prices 

(wholesale and retail)? 

 What would be the effect of the alternatives on net coal exports? 

 What would be the change in effect of the alternatives considering 

sensitivity analysis (e.g., natural gas prices)? 

 What would be the effects of the alternatives on socioeconomic 

factors, including but not limited to, national revenues, state 

revenues, and employment (direct and indirect)? 

 What would be the effect of the alternatives on fair return to the 

American taxpayer? 

 What would be the effect of the alternatives on greenhouse gas 

emissions (separated by streams: production, transportation, and 

combustion)? 

 What would be the effect of the alternatives in terms of achieving 

US climate goals? 

 What would be the effect of the alternatives on the environment? 

 What would be the effect of the alternatives on public health? 

6.5 ANALYTICAL APPROACH

Consistent with the requirements of NEPA, the BLM will prepare the PEIS using 

an interdisciplinary approach, and the disciplines of the preparers will be 

appropriate to the scope of the analysis and to the issues identified in the 

scoping process (40 CFR, Subpart1502.6). As can be seen in the issues identified 

for analysis (see Section 6.4), the PEIS will require economic and national and 

global energy market expertise among the more traditional disciplines. Further, 

many of the issues identified for analysis will require the use of sophisticated 

power sector modeling. The BLM is in the process of assessing the various 

models that are available and will determine which model or models best meet 

the analytical needs of the PEIS. 

The BLM will prepare a reasonably foreseeable development scenario to 

support the analysis in the PEIS. The reasonably foreseeable development 

scenario will forecast coal exploration, development, and production for the 

planning area for a defined time horizon. This baseline scenario will inform the 

analysis of the no action alternative and other program reform alternatives. 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-43

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In accordance with the requirements of NEPA, the PEIS will analyze the direct, 

indirect, and cumulative impacts of the proposed coal reform alternatives (40 

CFR, Subpart 1508.25[c]). As determined appropriate, this will include 

considerations such as transportation related impacts, health impacts, 

socioeconomic impacts, and ecological impacts. As discussed in CEQ’s guidance 

“Effective Use of Programmatic NEPA Reviews,” a broad (e.g., regional or 

landscape) description may suffice for characterizing the affected environment in 

programmatic NEPA reviews, so long as potentially impacted resources are 

meaningfully identified and evaluated. Further impacts in programmatic reviews 

are typically discussed in a broad geographic and temporal context with 

particular emphasis placed on cumulative effects.223

In developing the PEIS, the BLM will adhere to CEQ’s Final Guidance for Federal 

Departments and Agencies on Consideration of Greenhouse Gas Emissions and 

the Effects of Climate Change in NEPA Reviews (August 1, 2016). This includes 

an assessment of greenhouse gas emissions and the effects of climate change on 

a proposed action and its environmental impacts. The BLM will quantify the 

projected direct and indirect greenhouse gas emissions associated with the 

proposed coal reform alternatives to the extent practicable. The BLM will also 

evaluate the appropriate application of the social cost of carbon and the social 

cost of methane in the PEIS. 

The BLM will use the best available science to support its NEPA analyses in the 

PEIS (BLM NEPA Handbook Section 6.8.1.2) and will adhere to the five 

Principles and Practices of Science-Management Integration identified in the 

March 2015 publication Advancing Science in the BLM: An Implementation 

Strategy224: 

1. Use the best available scientific knowledge relevant to the problem or 

decision being addressed, relying on peer-reviewed literature when it 

exists. 

2. Recognize the dynamic and interrelated nature of socioecological 

systems within which the BLM operates. 

3. Acknowledge, describe, and document assumptions and uncertainties. 

4. Use quantitative data when it exists, in combination with internal and 

external professional scientific expertise. 

5. Use transparent and collaborative methods that consider diverse 

perspectives. 

 

223 Executive Office of the President, Council on Environmental Quality. 2014. Effective Use of Programmatic 

NEPA Reviews. December 2014. Available at https://ceq.doe.gov/current_developments/docs/ 

Effective_Use_of_Programmatic_NEPA_Reviews_Final_Dec2014_searchable.pdf 

224 BLM. 2015. Advancing Science in the BLM, an Implementatoin Strategy. Avaialbe at http://www.blm.gov/style/

medialib/blm/wo/blm_library/BLM_pubs.Par.38337.File.dat/BLMAdvSciImpStratFINAL0 32515.pdf
6. Programmatic Environmental Impact Statement 

6-44 Federal Coal Program Programmatic EIS January 2017 

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The BLM will conduct a thorough review of all data, reports, and studies 

submitted to the BLM over the course of the NEPA process and incorporate 

them as appropriate into the NEPA analysis. A list of the data and reports 

submitted through the scoping process can be found in the annotated 

bibliography in Appendix E (see Section 4.6.1 for more information). The 

BLM will work with Cooperating Agencies and other industry experts as 

necessary in conducting this work. 

Consistent with NEPA, the PEIS will concentrate on the issues that are truly 

significant to the action in question rather than amassing needless detail (40 

CFR, Subpart 1500.1). While the reform options under consideration are fairly 

expansive, the BLM will work to keep the PEIS as focused as possible with a goal 

of developing a document that is understandable to the larger public and 

completed in a timely manner. 

6.6 ENERGY AND ECONOMIC ANALYTICAL CONSIDERATIONS

The development of the PEIS will involve detailed analysis of options, option 

combination packages, and alternatives with a goal of addressing the issues for 

analysis described in Section 6.4. 

Of particular relevance will be analyzing effects on energy markets and the 

energy economy as well as fiscal effects. Most obviously, adjustments to the 

Federal coal program have the potential to impact Federal coal production as 

well as employment and the state and Federal revenues associated with 

production. Moreover, policy options also have the potential to impact 

greenhouse gas emissions directly through limitations on production or 

indirectly through mechanisms that factor in the environmental externalities of 

coal production. However, as illustrated by comments and accompanying 

studies and reports, there are a wide array of variables and constraints to 

consider when examining how coal reform would interact with other 

components of the national energy and economic systems. Some of these 

considerations are highlighted below. These considerations present key next 

steps for the BLM, Cooperating Agencies, and other interested stakeholders in 

examining reform opportunities for the Federal coal program. 

Modeling choice for energy sectors: The impacts from reforms to the PEIS would 

be absorbed over an extended period of time as it is adopted through new or 

renewed coal leases as current lease contract periods expire.225 As noted above, 

reform options would have the potential to affect not just Federal coal 

production, but national energy and economic systems as a whole. Estimating 

these potential system wide effects requires modeling the complex interactions 

of the power sector and various fuel sources. There are a number of power 

 

225 Existing leases are generally structured as 20-year contracts and would not be directly impacted by the reform 

until up for renewal. 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-45

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sector models available to assist the BLM in this task.226 The power sector 

represents the chief source of demand for Federal coal; its detailed 

representation and ability to respond to changes in fuel cost through dispatch 

and capacity changes are critical to accurately modeling any leasing reform. 

Capacity expansion models that optimize electricity dispatch and generation 

subject to fuel costs and regulatory constraints are ideal for analyzing these 

types of long-run power generation scenarios and the policies that drive 

them.227 Production cost models and network reliability models have higher 

temporal resolutions focused on near-term electricity production and dispatch 

decisions and generally apply to more narrow geographies. Given the 

nationwide power market implications of Federal coal leasing reform and the 

extended time horizon for which its impact would be assessed, capacity 

expansion models would offer an advantage over other power-sector models. 

These types of models can provide the temporal and spatial dimensions 

necessary to best capture the full impacts of leasing decisions. The discussion 

below highlights important considerations regarding modeling assumptions and 

inputs and outputs. 

Model Inputs 

1. Coal Supply Representation: With slightly over 40 percent of coal 

produced in the United States coming from Federal lands, a key data 

element for analysis and modeling will be distinguishing between coal 

supplied from Federal coal leases and other non-Federal mineral 

ownership. This distinction would allow the BLM, when specifying 

modeling inputs, to most accurately link any coal reform changes to the 

mines on the supply-side that will absorb those changes. Furthermore, 

being able to distinguish between the types of mine—surface or 

underground—will also be a relevant distinction for analytic efforts. 

Federal coal leasing currently involves different royalty rates for surface 

and underground mines, and it is likely that any alterations that address 

fair return or environmental impacts would likely impact these mine 

types differently. Finally, a data field that distinguishes whether a 

particular mine is an existing lease, a renewed mine lease, or a new 

lease would be central to appropriately reflecting Federal coal leasing 

changes when designing modeling parameters. Any Federal coal leasing 

changes would likely only apply to renewed and new leases and, 

therefore, having a detailed mine-by-mine coal supply representation 

that made this distinction would allow the BLM to best reflect the policy 

parameters in its analysis. In summary, having detailed mine-by-mine 

 

226 Howard, P. 2016. The Bureau of Land Management’s Modeling Choice for the Federal Coal Programmatic 

Review. New York University Institute for Policy Integrity. June 10, 2016. Available at http://policyintegrity.org/ 

publications/detail/BLM-model-choice 

227 Ibid. 
6. Programmatic Environmental Impact Statement 

6-46 Federal Coal Program Programmatic EIS January 2017 

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supply assumptions that include data on each mine’s Federal/nonFederal, surface/underground, and existing/new status will equip the 

BLM with the appropriate data necessary to best analyze any coal 

reform changes. 

2. Coal Transportation Representation: The primary consumer of Federal coal 

is the power sector. Many of these buyers are located far away from 

the western coal lands where the majority of coal from Federal leases is 

produced. Consequently, compared with other domestic coal sources, 

the cost of transportation is typically a more significant factor into the 

delivered price of western coal. Therefore, having an accurate 

representation of the linkages from coal supply regions to the power 

plant is critical to assessing the delivered price of coal to power markets 

and the corresponding dispatch decisions to meet electricity demand. 

Data regarding the mode of transportation (e.g., rail, barge, and truck) 

from mine to power plant and the cost per ton-mile transported will 

likely be an important model input. Any capacity limitations would also 

be critical to understand—and to capture as a constraint—in analysis to 

ensure that significant changes in coal supply origins are compatible with 

current and future infrastructure. Finally, coal transportation cost and 

supply linkages between plant and supply region may be informed by 

historical data (such as fuel receipts provided in EIA Form 923). 

However, the BLM would likely need to identify possible rail linkages, 

not just historical ones, between supply regions and plants to ensure 

that new transportation options to competing basins are an option, 

where appropriate, for power plants in optimization models to prevent 

any bias against substitution in its analysis. 

3. Coal Demand Representation: Demand for Federal coals is almost entirely 

from US power plants. Power plants base their purchase decisions on a 

variety of factors, including the delivered price per mmBtu of a particular 

coal, compatibility with boiler design, and the environmental properties of 

the coal, the compatibility with current pollution control equipment (e.g., 

flue gas desulfurization or dry sorbent injection), and emission 

requirements. Moreover, coal plants may have captive competition where 

they only access coal markets through a single rail carrier, or they may 

have a more competitive position where they can access coal supply 

through a variety of the primary rail carriers. While a mine-by-mine 

representation of coal supply will allow the BLM to most accurately 

estimate the effect of coal reform adjustments on availability of different 

types of coal, a detailed plant-by-plant representation of the power sector 

will help best capture how any changes affect the demand for coal as well 

as other fuel sources. A bottom-up model that starts with a database of 

the power plant fleet and contains capacity, historical fuel consumption, 

boiler design, plant-specific pollution controls, and emissions constraints 

for each power plant will be a central data element to future PEIS analysis. 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-47

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Model Outputs/Impacts Dependent on Model Outputs 

1. Substitution: With appropriate model structure and supply and demand 

representation, the impact of any Federal coal program reforms will 

ultimately pivot on substitution. Specifically, this includes estimated shifts 

to/away from Federal coal and estimated shifts to/away from competing 

electricity generation (e.g., non-Federal coal, natural gas, renewable, 

etc.). To inform substitution effects, the BLM may use power-sector 

models that accurately reflect electricity generation capacity and 

capacity expansion, as well as cost and performance metrics of each 

form of electricity generation. 

In regard to coal switching between Federal and non-Federal it is 

important to fully capture the cost of such switching to ensure there is 

no bias for or against substitution. For instance, the majority of 

Federally produced coal is subbituminous, and the majority of nonFederal coal is bituminous. When a coal boiler built for subbituminous 

substitutes to bituminous, it may require soot blowing or heat transfer 

surface modifications to handle the low ash fusion temperatures and/or 

corrosive nature of its higher chlorine content. These costs, in addition 

to the fuel costs, are critical data elements to capture when assessing 

substitution. Likewise, when a boiler built for consuming bituminous 

coals substitutes to subbituminous, it may experience additional capital 

cost in the form of increased material handling, milling capacity, and dust 

control. Finally, a plant may have an investment in certain control 

technologies, such as dry sorbent injection, that only function with 

certain coal ranks and, thus, this data needs to be considered when 

assessing substitution costs. 

When switching to/from natural-gas fired generation, it is important to 

have production and pipeline data to ensure that the levels of substitution 

are not inconsistent with infrastructure capabilities. Likewise, it is 

important to appropriately reflect the cost and performance of renewable 

technologies to identify the degree to which this technology serves as a 

substitute. Due to the long time horizon under consideration when 

evaluating PEIS reform and the rapidly evolving changes regarding 

renewable energy costs, it is a data component that may benefit from 

sensitivity analysis. For example, its viability as a substitute may be 

informed by current cost and performance metrics in one sensitivity, but 

a different set of technology cost and performance assumptions reflecting 

recent trends and growth may be used for sensitivity. 

Some commenters have conducted initial analysis that informs the likely 

substitution effects from different policy scenarios and may help inform 

further exploration of substitution effects. For example, Vulcan 

Philanthropy looked at varying scenarios where different royalty rates 

were applied. With CPP, the royalty change resulted in a substitution as 

high as 0.75 tons of non-Federal coal for every ton of Federal coal decline 
6. Programmatic Environmental Impact Statement 

6-48 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

in 2030. At higher royalty rates, these substitution rates reached levels 

where only 0.5 tons of additional non-Federal coal were produced for 

every ton of Federal coal reduced in 2030 as the power sector 

increasingly looks for non-coal energy (e.g., natural gas) sources to 

replace larger decreases in Federal coal production.228 As the 

substitution rate to non-Federal coal became smaller, the substitution to 

natural gas became larger, reflecting the competitive reality of these two 

fuels as marginal dispatch sources. 

The environmental (including climate change) and economic impacts of 

reform alternatives depend, in large part, on the estimated substitution 

effects. For a variety of reform options, identifying substitution will be a 

critical early data element to enable the BLM to subsequently determine 

the power system impacts, corresponding cost and benefits, changes to 

state/Federal revenues, employment, and greenhouse gas emissions 

impacts. Some of those impacts are explored further below. 

2. Employment Impacts: The BLM will analyze employment impacts (as well 

as impacts on other economic metrics such as output, gross domestic 

product, and labor income) to sectors potentially affected by reform 

alternatives. The prior discussion highlights that these impacts extend 

beyond the coal sector to the energy industry as a whole, as well as 

other industries affected by the multiplier impacts of coal production, 

transportation, and generation. The estimated substitution results of 

alternative reforms will serve as primary input for such an analysis on 

employment impacts to various sectors. 

One key consideration for analyzing coal employment impacts relates to 

differences in labor intensity of Federal and non-Federal coal. The 

majority of Federal coal is surface mined and has the lowest labor 

intensity in the nation, whereas the non-Federal coals generally require 

much more labor per ton of coal removed. For instance, in Wyoming, 

where the majority of Federal coal is located, the aggregate coal mine 

productivity is 29 tons per labor hour. Illinois, Pennsylvania, and West 

Virginia, where many of the competing non-Federal coals are mined, 

have productivity rates in the range of 2 to 6 tons per labor hour due to 

the thinner and more difficult-to-reach seams (see Table 6-2, which 

shows coal labor employment and productivity for the seven largest 

states by employment).229 This means that for each ton of Federal coal 

 

228 Vulcan Philanthropy. 2016. Federal Coal Leasing Reform Options: Effects on CO2 Emissions and Energy 

Markets. Fairfax, Virginia: Vulcan Philanthropy/ICF International. January 2016. Available at

http://www.vulcan.com/MediaLibraries/Vulcan/Documents/Federal-Coal-Lease-Model-report-Jan2016.pdf

229 US EIA. 2016. Data from Annual Energy Outlook Coal Data Browser. Available at 

http://www.eia.gov/beta/coal/data/browser/#/topic/37?agg=0,2,1&geo= 

vvvvvvvvvvvvo&mntp=g&freq=A&start=2001&end=2014&ctype=map<ype=pin&rtype=s&maptype=0&rse=0&pin= 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-49

Scoping Report 

Table 6-2 

Labor Requirements to Mine Coal 

Employment Productivity 

(tons per labor hour)

West Virginia 18,330 2.69

Kentucky 11,834 2.8

Pennsylvania 7,938 3.52

Wyoming 6,624 28.62

Illinois 4,218 5.99

Indiana 3,810 4.21

Alabama 3,694 1.88

Source: US EIA 2016230

replaced by a ton of non-Federal coal, the amount of coal labor may 

increase by a factor of 10. The BLM will examine the substitution 

impacts from any coal reform to assess the impact on employment 

markets in non-Federal coal mining markets and in natural gas markets. 

The EIA data on productivity and employment will be one critical 

element to understanding coal mining job impacts from any reform 

efforts and subsequent substitution. 

Initial analysis provided by commenters examining the impact of various 

coal reform options, such as royalty rate adders, highlighted that 

nationwide coal mining employment increased (by more than 5 percent) 

as a result of Federal royalty rate adders that made non-Federal coals 

more competitive.231 With appropriate data on substitution and 

employment, the BLM can further explore the potential to 

simultaneously increase coal revenues and employment. Figure 6-1

highlights the negative correlation historically observed between 

Powder River Basin production and coal mining jobs. The BLM analytical 

efforts could help ensure that the price for which Federal coals are 

leased reflects FMV in order to prevent any effective subsidization of 

western coal mining jobs at the expense of eastern coal mining jobs. 

3. Electricity Prices - Any changes that make fuel more expensive will likely 

be carried through to the end user of the fuel–the electric ratepayer. 

The BLM will assess how these changes to Federal coal leasing impact 

fuel cost and related capital cost, and how those costs are passed 

through to ratepayers. 

 

230 US EIA. 2016. Coal data browser. Available at www.eia.gov/beta/coal/data/browser 

231 Gillingham, K. and J. Stock. 2016. Federal Minerals Leasing Reform and Climate Policy. Hamilton Project Policy 

Proposal 2016-07. December 8, 2016. Available at https://www.brookings.edu/wpcontent/uploads/2016/12/es_20161208_federal_minerals_leasing_reform_and_climate_policy_pp.pdf 
6. Programmatic Environmental Impact Statement 

6-50 Federal Coal Program Programmatic EIS January 2017 

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Figure 6-1. Powder River Basin Production and Nationwide Coal Employment 

Source: Employment: MSHA 2016232

Production (1987-2011): US EIA. 2012233

Production (2012-2015): US EIA 2016234 

4. Revenue Impacts: The BLM will analyze data on government revenues as 

a result of any coal leasing changes. This includes assessing effects on the 

Federal revenue sources, particularly revenues associated with bonus 

bids, rental rents, and royalties. To the extent feasible, the BLM will 

assess effects on other Federal taxes (e.g., Reclamation Fee and Black 

Lung Excise Tax) and effects on relevant state and local revenues. The 

analysis released by the Council of Economic Advisors suggests that as 

coal royalties increase up to a certain point so too do government 

revenues.235 That is, the increase in revenue from higher royalties more 

than offsets any decline in production and bonus bids. For example, 

their analysis suggested that a royalty charge of $30/ton would result in 

an additional 2.7 to 3.1 billion dollars in government revenues each year 

after 2025 when the changes are fully phased in even though total 

annual production would decrease by 53 percent. Regional coal 

 

232 MSHA (United States Department of Labor Mine Safety Health Administration). 2016. Coal Mine and 

Employment Data. Accessed September 2016. Available at 

http://arlweb.msha.gov/OpenGovernmentData/OGIMSHA.asp 

233 US EIA. 2012. Annual Energy Review. Table 7.2: Coal Production, 1949-2011. Available at: 

https://www.eia.gov/totalenergy/data/annual/showtext.php?t=ptb0702. 

234 US EIA. 2016. 2016 Annual Coal Report. Table 1. Coal Production and Number of Mines by State and Mine 

Type. November 3, 2016. Available at: http://www.eia.gov/coal/annual/. 

235 Council of Economic Advisers, Executive Office of the President. 2016. The Economics of Coal Leasing on 

Federal Lands: Ensuring a Fair Return to Taxpayers. June 2016. Available at 

https://www.whitehouse.gov/sites/default/files/page/files/20160622_cea_coal_leasing.pdf 
6. Programmatic Environmental Impact Statement 

January 2017 Federal Coal Program Programmatic EIS 6-51

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production forecasts, including forecasts specific to Federal leases, are 

the key input for analyzing revenues. Therefore, outputs that detail 

production levels from different coal supply regions and Federal mines 

will be critical results from the energy sector model. 

5. Externalities: Economic theory indicates that markets are optimized 

when the full marginal cost of production (including externalities) is 

equal to the marginal benefits. In order to reflect this optimal level, 

fuels such as coal would have a cost that reflects not only the extractive 

component but also any environmental or social damages associated 

with them. When examining externalities, the BLM would need data and 

analysis regarding the social cost of methane and the social cost of 

carbon per ton of coal produced. These values, and instructions on 

how to incorporate them, are available from the Interagency Working 

Group on the Social Cost of Carbon. The BLM would also need to 

project the incremental changes in methane and CO2 emissions from 

upstream, midstream, and downstream portions of coal’s lifecycle. 

These estimates are needed for all coal not just coal from Federal 

leases, as well as from competing fossil fuel substitutes such as natural 

gas. Having this price and volume data would allow the BLM to assess 

the total impact of any coal reform changes. 

Commenters also pointed out other, non-climate-based externalities on 

which the BLM would need better data quantification. These include the 

ecosystem impacts from coal mining, lifecycle criteria pollutant impacts, 

rail transportation fatalities, etc. Emission estimates for SO2, NOx, and 

mercury will be useful data points for informing the benefits of any coal 

reform changes. These changes will largely manifest themselves in the 

power sector, so using a model that included outputs for these variables 

will be an important consideration in the BLM’s analytic endeavors. 

Finally, being able to understand the locational impact of these changes 

will empower the BLM and the public to best understand the 

distributional aspects of the cost and benefits to coal reform. Having 

this data will help the BLM consider environmental justice impacts as 

required under NEPA and to consider how best to address adverse 

community impacts from any coal job loss as well as other labor 

impacts. 

6. Sensitivity: Sensitivity analysis will be central to any assessment of Federal 

coal leasing reform due to the uncertainty of energy markets over the 

extended time horizon affected by any leasing changes. Therefore, 

specifying modeling runs that test the same policy scenario under 

different market and regulatory assumptions (i.e., sensitivity analysis) will 

be useful to determine a range of possible results that capture the 

uncertainty of policy impacts. These sensitivities may include, but are 

not limited to, testing policy changes: 
6. Programmatic Environmental Impact Statement 

6-52 Federal Coal Program Programmatic EIS January 2017 

Scoping Report 

a) With reference case natural gas prices, as well as high and low 

natural gas prices scenarios 

b) With high and low renewable technology cost and performance 

assumptions 

c) With and without additional coal export terminal capacity on the 

West Coast 

d) With and without improved cost performance of carbon capture 

and sequestration 

6.7 SCHEDULE

As discussed previously, on January 15, 2016, Secretary Jewell issued Secretarial 

Order 3338 directing “the BLM to prepare a discretionary PEIS that analyzes the 

potential leasing and management reforms to the current Federal coal 

program.” In the press release and other materials released with the Secretarial 

Order and Notice of Intent, the Secretary indicated that the PEIS would take 

approximately 3 years to complete. 

Following the CEQ regulations at 40 CFR, Subpart 1508.22, a Notice of Intent 

to prepare a PEIS was issued on March 30, 2016, which initiated the scoping 

process. The proposed schedule for the PEIS can be found in Table 6-3. The 

BLM will prepare a Draft PEIS using the information received during the scoping 

process and will provide, at minimum, a 45-day public comment period on the 

Draft PEIS (43 CFR, Subpart 1506.10). The BLM plans to release the Draft PEIS 

in January 2018. The BLM will incorporate public comments received on the 

Draft PEIS and prepare a Final EIS (40 CFR, Subpart 1502.9) by January 2019, 

with a Record of Decision to follow by March 2019 (40 CFR, Subpart 1506.10). 

Table 6-3

Proposed Schedule for the PEIS

Milestone Proposed Date

Scoping Report January 2017

Draft PEIS January 2018

Public Comment Period January – March 2018

Final PEIS January 2019

Record of Decision March 2019