Here’s How Much Obama Cost Americans By Banning New Coal Leases


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Michael Bastasch DCNF Managing Editor
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President Barack Obama’s decision to put a moratorium on new coal mine leases could end up costing Americans billions of dollars as more federal lands are locked up.

Instead, if Obama could have generated nearly $88 billion of economic activity from opening more federally-controlled lands to coal mining, according to a recent study by the free market Institute for Energy Research.

IER found that opening up lands locked-up by federal laws and regulations would be a huge boon to U.S. coal producers and states, like Wyoming and Montana, which sit atop the Powder River Basin coal deposit. The Institute’s experts estimate these two states are home to 86 billion short tons of recoverable coal reserves.

economic activity from mineral leases

Source: Institute for Energy Research

Opening up more lands to coal mining would also create more than 260,000 jobs in the long-run and result in huge revenue gains for state and local governments. The federal government would also get a nice revenue boost from opening up lands to coal mining.

“Perhaps the most important gains from the proposal are in state and federal tax revenues. Increased output and economic growth lead to a larger pie upon which to assess taxes,” wrote Dr. Joseph Mason, a professor at Louisiana State University, in his study on the economic benefits of allowing more oil, gas and coal extraction on federal lands.

“The result is a gain of $10 billion annually in state and local tax revenues in the short run, followed by nearly $61 billion annually in the longrun,” Mason wrote of allowing more oil, gas and coal extraction — these figures don’t just refer to opening up more coal areas. “Federal revenues will grow similarly, with short-term tax revenues increasing nearly $24 billion annually in the short-run and over $126 billion annually in the long-run.”

The Interior Department announced Friday it would no longer be allowing new leases for coal extraction on federal lands while the agency conducts a top-down review of its mineral leasing program. The move comes after years of pressure from environmentalists to get bureaucrats to charge companies more to mine for coal.

Interior argues the government needs to make sure “taxpayers receive a fair return for the sale of these public resources.” The language implies that bureaucrats intend to increase the royalty rates coal companies pay the government to mine on federal lands — something environmentalists have been pushing for years.

“It’s a fossil fuel giveaway that’s costing taxpayers $1.1 billion a year and it’s driving the central environmental challenge of our time,” Sharon Buccino, director of the land and wildlife program at the Natural Resources Defense Council, told The Washington Post. “That’s the wrong direction for our country and we need to make a course correction.”

Currently, 40 percent of coal is produced on federal lands, and clamping down on coal royalties could further hit the coal industry, which is already weathering federal regulations forcing coal-fired power plants to close their doors.

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