The US Department of the Interior's Jan. 15 announcement that it will not issue new leases while it reexamines its coal program may have made oil and gas producers wonder if the federal onshore program for those resources might be next.
"Pausing the public lands leasing program for coal, which supplies nearly 40% of US electricity, denies reality," American Petroleum Institute Pres. Jack N. Gerard said that day. "We need more supplies of all types of energy if we are to sustain our economy and provide affordable energy to US businesses and consumers."
Interior Sec. Sally Jewell said a coal program review was overdue, but added that the fuel will continue to be an important domestic energy source in the years ahead.
"We haven't undertaken a comprehensive review of the program in more than 30 years, and we have an obligation to current and future generations to ensure the federal coal program delivers a fair return to American taxpayers and takes into account its impacts on climate change," she said.
The review will examine concerns that the Government Accountability Office, DOI's Inspector General's Office, members of Congress, and the general public have expressed, DOI said. There will be limited suspension exceptions for metallurgical coal, small lease modifications, and emergencies where there is a demonstrated safety need or insufficient reserves.
In addition, pending leases that have completed a National Environmental Policy Act analysis already and received a final Record of Decision or Decision Order under existing regulations will be able to complete final steps for getting a lease or modification, DOI said.
Jewell also announced federal coal program reforms that include establishing a publicly available carbon emissions database from fossil fuels developed on public lands, requiring US Bureau of Land Management offices to publicly post online pending requests to lease coal or reduce royalties, and facilitating the capture of waste mine methane.
Are oil and gas next?
Could federal onshore oil and gas leasing be suspended next for a similar review? Not necessarily, said Kathleen Sgamma, vice-president for public and government relations at the Western Energy Alliance in Denver.
"At this point, we don't see DOI doing the same to oil and gas because it's concentrating on achieving the same basic result through a slew of regulations," she told OGJ via e-mail. "We expect venting and flaring proposed rules this week, as well as a proposed royalty rate increase at the same time or in the near future.
"These, combined with several other regulations already finalized or in the works, will continue to devalue the federal mineral estate and further drive producers off public lands," Sgamma said.