While reviewing the federal coal leasing program, the Department of the Interior should keep a few things in mind, 12 things to be specific, according to a paper issued Tuesday by the New York University School of Law’s Institute for Policy Integrity. “The Programmatic [Environmental Impact Statement], conducted pursuant to the National Environmental Policy Act (NEPA), must be prepared carefully, transparently, and by using the best economic and modeling tools available,” the paper says.
The Interior Department announced in mid-January it would issue no new coal leases on federal lands while completing a programmatic EIS of the U.S. coal leasing program. The review is intended to determine if the program is properly structured to provide a fair return to taxpayers, reflects its impacts on the environment, and will continue to help meet the nation’s energy needs. The agency last conducted a PEIS for the federal coal program in 1983-1984. That review process also included a pause on coal leasing, as did the previous four. Currently, approximately 41 percent of the nation’s annual coal production comes from federal land.
The new paper includes the following list of 12 items for consideration in the review:
- Define “fair market value” to mean “net social value,” in order to account for the environmental and social costs of coal production and increase the net return to taxpayers;
- Prepare a strategic plan for managing the coal program and commit to regular programmatic environmental reviews;
- Prioritize renewable energy production on federal lands, including on abandoned and reclaimed coal mine lands;
- Propose a broad range of alternatives for consideration in the Programmatic EIS;
- Calculate the upstream and downstream greenhouse gas emissions of select alternatives in this Programmatic EIS and in future project-level reviews;
- Use the Social Cost of Carbon and Social Cost of Methane to quantify the climate impacts of proposed and alternate leasing scenarios;
- Evaluate whether the current coal program earns “fair market value” for taxpayers, by conducting a cost-benefit analysis of the current program;
- Identify optimal fiscal terms for new and modified coal leases by analyzing Social Cost of Carbon and Social Cost of Methane royalty “adders,” among other potential reforms;
- Analyze viable alternatives that would reconcile the United States’ climate goals with management of coal production on public lands;
- For each alternative scenario, model its climate impact and effect on coal prices, royalty payments, and energy markets, using sophisticated models that account for substitution effects;
- Take steps to curb royalty rate reductions, which impair a fair return to taxpayers; and
- Evaluate bidding and eligibility reforms that can help secure fair market value and reduce risks to taxpayers.
