Obama administration orders pause on issuing new coal leases in another step to control climate change

By Valerie Volcovici

WASHINGTON, Jan 15 (Reuters) - The Obama administration, in the first major review of the country's coal program in three decades, on Friday ordered a pause on issuing coal-mining leases on federal land as part of new executive actions to fight climate change.

The halt could last three years, U.S. Interior Secretary Sally Jewell told reporters, while officials determine how to protect taxpayers' stake in coal sales from public lands and how burning coal could worsen climate change.

"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," Jewell said on a conference call.

Federal land accounts for over 40 percent of U.S. coal production. Most leases are on public land in Western states, primarily Wyoming, along with Colorado, New Mexico and Utah.

The review, the administration's latest move to combat climate change using executive authority rather than wait for congressional action, comes at a tough time for the industry.

Since 2012, more than 50 coal companies have filed for bankruptcy in the face of competition from cheap natural gas and clean-air regulations that have raised costs for burning the fossil fuel.

National Mining Association President Hal Quinn said development of coal projects on federal land already took more than 10 years and Friday's announcement just adds more red tape.

"The coal supply being cut off by today's action has been the source of the lowest-cost and most reliable electricity keeping America's lights on and people working," he said.

Republican lawmakers were quick to criticize the reform effort, accusing the administration of "ravaging" coal country.

"Congress will continue to fight back against the president's ruthless pursuit of destroying people's low-cost energy sources in order to cement his own climate legacy," said U.S. House Speaker Paul Ryan.

President Barack Obama, in his annual State of the Union address on Tuesday, hinted at the moves, saying he would "change the way we manage our oil and coal resources so that they better reflect the costs they impose on taxpayers and our planet."

Environmental groups had pressed the White House for years to freeze fossil fuel leases, arguing that allowing coal development on public land undermines the president's climate agenda.

Environmental activists have said that while the coal reform program is a good first step, the administration should extend the review to oil and natural gas for it to meet its goal to slash greenhouse gas emissions.

"Any good-faith effort to meet international climate targets necessitates that the vast majority of all remaining coal, oil and natural gas on federal lands must stay in the ground," said Elijah Zarlin, director of climate campaigns at activist group CREDO.

Jewell said the review will examine concerns flagged by the Government Accountability Office and the Interior Department's Inspector General, as well as members of Congress and the public.

She added that the Interior Department will also adopt measures to boost transparency of federal coal leasing.

Measures include a public database to show the carbon emitted from fossil fuels developed on public lands, posting online pending requests to lease coal or reduce government royalties, as well as capturing methane emissions from mines.

Jewell said the pause will not apply to existing coal production and that the government will allow mining of metallurgical coal used in making steel, as well as emergency leases if more reserves are needed for power generation.

"We have plenty of coal," Jewell said, adding that reserves already under lease are enough to sustain current levels of production from federal land for 20 years. (Reporting by Valerie Volcovici, Patrick Rucker and Timothy Gardner; Editing by David Alexander and James Dalgleish)

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