In the first two weeks, the aspiring Biden government began setting a serious climate agenda. Biden is remarkable Campaign path promises and Transition phase political plans have evolved into a comprehensive development to adjust from first steps that implies almost the entire federal government. The White House’s newest multipart supreme command With regards to climate change and environmental justice, important steps are being taken to end federal fossil fuel subsidies, boost mass markets for electric vehicles and other fossil-free products, incorporate climatic considerations into each federal agency’s decision-making, and account for racial and geographic inequalities in the apportionment the benefits of climate protection.
Best known, however, is that the contract will stop the new leasing of oil and gas – the process by which private companies pay for pumping public oil and gas – in federal states. It is a triumph for more than a decade of climate activism and a fundamental shift for a extractive industry that has been shaped by generous federal politics for over a century. The moratorium will a quick legal challengeand because oil and gas companies have stored The ban on new lettings will take years before the CO2 footprint of the federal states noticeably deteriorates. Given that fossil fuel extraction in federal states produces approximately a quarter This is a critical step for US greenhouse gas emissions.
However, the moratorium blatantly ignores coal in federal states. Federally controlled coal is auctioned by the Interior Ministry to private mining companies, as is oil and gas. Federal coal accounts for an even larger share (42 percent in 2017) of total U.S. coal production than federal oil (24 percent) or natural gas (13 percent) in their industries. And unlike federal oil and gas, federal coal’s share of US coal production is exceeds its share of US coal reserves: in other words, in the United States, coal comes from states disproportionately.
The exclusion of coal leasing is also noticeable because of the oversized role coal has long played in American climate, environmental and labor debates. In 2016, coal mining occupied the deadlock of American climate policy. In January of this year, the Obama administration’s interior secretary Sally Jewell provoked the outrage in Congress by adopting a far more restrictive stance moratorium on new federal coal leases. During the presidential campaign, coal served as a symbolic abbreviation for the country’s broken consensus on the needs of climate change, support for rural industrialism, and the value of public land. Trump card dug coal. Clinton tried to explain Retraining of miners. One of the incoming Trump administrations very first moves was to lift Jewell’s moratorium; Secretary Ryan Zinke quickly followed this step Carving of federal coal areas outside the confines of the Grand Staircase-Escalante National Monument.
Four years later, however, coal mining is barely on the climate change agenda of the Biden government. Of course, coal and miners are a focus of the executive branch Transitional Justice Efforts for communities that depend on fossil fuel revenues. Likewise, the Biden government includes coal when directing federal agencies to dispose of some of the coal $ 15 billion in direct subsidies that the government pays to the fossil fuel industry every year. However, when the issue shifts to production, coal is nowhere to be found.
This omission could well reflect the steep collapse of the American coal market. In the past ten years, the share of coal in electricity generation has increased like from 46 percent to below 20 percent, which is mainly due to the rock-bottom prices for natural gas. American coal production in 2020 alone crashed down by almost a quarter.
In light of all this, the Biden government appears to have decided that another moratorium on new federal coal leasing would not offer enough climate benefits to risk additional political backlash. Instead, the Executive Ordinance and Administration News focus on oil and gas, the segments of the federal fossil fuel economy where demand may still be growing. However, new rentals are only part of the federal government’s fossil fuel production.
If the Biden government ignores this bigger picture, there is a risk that billions of tons of publicly owned coal will be left for extraction and incineration. Once a coal company has signed a federal coal lease, it can hold that lease for at least 20 years. During this time, federal coal regulations give the coal company myriad ways to cut costs, seek waivers from contract terms, or add more coal to their cheap lease.
Although the Biden government cannot legally terminate existing federal coal leases en masse, new officials can prevent current coal tenants from expanding their mines at below market prices, applying for discounts due to economic difficulties, or lowering their renovation costs. Because the profitability of most of the surviving coal mines has become so precarious, filling the most egregious gaps that coal mining has closed in the past 40 years can itself curb and keep coal production going 14 billion tons of coal they are already leased in the ground.
The fastest way for the Biden administration to stop issuing changes to the rental agreement. Originally created to motivate coal companies not to drive over small pockets of easily recoverable coal next to their existing mines, the Bush administration turned lease amendments into a tool for dramatically extending the life and profitability of coal mines. Changes to the lease allow existing mines to be expanded to include new areas at a considerable discount – up to half the size of most federal coal leases. A long line of research has shown that lease changes value coal up to 80 percent less its value in the standard tendering process, in which federal coal is already systematically undervalued.
According to current law, however, these are changes to the rental agreement only issued if the Minister of the Interior determines that they are in the national interest. This discretion will provide Secretary-designate Deb Haaland the rare chance on her first day in office to close a sizeable climate gap by discovering that lease changes can never be in the national interest in times of climate crisis.
While lease changes allow coal companies to expand their federal mines at a discount, royalty reductions help them cut costs in the name of economic hardship. In addition to the initial rental price, federal coal tenants have must pay license fees on every ton of coal they produce. Although the license fee is fixed, coal companies facing difficult geological or financial challenges can apply Reduction in license feeswith the aim of restoring profitability by reducing the benefits to the public. In some regions the issuance of license fee reductions has become so routine that the rates actually paid have regularly fallen to less than half of the legal minimum.
Congress first authorized the secretary to lower license fees to subsidize coal production in places and situations where coal mining is a challenge. It is difficult to imagine that a mission would be less well suited to the demands of the present day. License fee reductions such as lease changes are at discretion and Secretary-Designate Haaland may refuse to issue.
Even beyond interest rate cuts, the coal fee system is flawed, including a valuation process that can allow coal companies to minimize their royalty obligations by buying their own coal. During the 2016 coal moratorium, the Ministry of the Interior considered changing this practice to change the point in the coal sales process when royalties are set; The new executive regulation also allows the possibility of a “Carbon adder“That would include the costs of climate change in a higher license fee. Further reaching could be the department Redesign of the long-lasting competitive leasing systemThis forces coal companies interested in maintenance leasing in existing mines to bid against each other. The open pit mine could be more determined to ensure that coal companies provide funding for future environmental cleanups. Each move could return more leased tonnage back to federal control while transforming the coal industry’s decline from a chaotic collapse into a managed transition.
The Biden administration has already set itself the most ambitious climate change agenda in American history – even if that agenda still falls short of the mobilization needed to prevent catastrophic global warming. In order to do justice to this, the administration has to get creative.
Biden’s initial order on climate protection shows how far the collapse of American coal has progressed: Shutting down the federal tap is no longer a top priority, as the new coal leasing has slowed down to a drop. Still, large amounts of federal coal remain leased, and coal companies have access to a multitude of loopholes that could keep their mines operating for decades. In order to take the new climate goals of the Biden government seriously, every option must be pursued to restrict the existing production of fossil fuels in federal states. Ignoring these existing leases and their decades-long expiration gives up enormous amounts of potentially avoidable carbon emissions.
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