Notice2021-17827
Notice of Intent To Conduct a Review of the Federal Coal Leasing Program and To Seek Public Comment
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 20, 2021
Issuing agencies
Interior DepartmentLand Management Bureau
Abstract
The Bureau of Land Management (BLM), Headquarters Office seeks public comment on the Federal coal program in advance of the BLM's intended review of that program. The Department of the Interior (DOI) also intends to conduct government-to-government consultation with affected Indian tribes about the Federal coal leasing program and to consider the potential environmental, social, and cultural impacts of the coal program on indigenous communities and their lands during this review. This notice solicits public comments for consideration in establishing the scope and content of the BLM's review of the Federal coal leasing program.
Full Text
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<title>Federal Register, Volume 86 Issue 159 (Friday, August 20, 2021)</title>
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[Federal Register Volume 86, Number 159 (Friday, August 20, 2021)]
[Notices]
[Pages 46873-46877]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-17827]
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DEPARTMENT OF THE INTERIOR
Bureau of Land Management
[21X.LLHQ320000.L13200000.PP0000]
Notice of Intent To Conduct a Review of the Federal Coal Leasing
Program and To Seek Public Comment
AGENCY: Bureau of Land Management, Interior.
ACTION: Notice of intent.
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SUMMARY: The Bureau of Land Management (BLM), Headquarters Office seeks
public comment on the Federal coal program in advance of the BLM's
intended review of that program. The Department of the Interior (DOI)
also intends to conduct government-to-government consultation with
affected Indian tribes about the Federal coal leasing program and to
consider the potential environmental, social, and cultural impacts of
the coal program on indigenous communities and their lands during this
review.
This notice solicits public comments for consideration in
establishing the scope and content of the BLM's review of the Federal
coal leasing program.
DATES: The BLM invites interested agencies, States, American Indian
tribes, local governments, industry, organizations, and members of the
public to submit comments or suggestions to assist in identifying
significant issues that the BLM should consider in its review of the
Federal coal program.
The BLM will consider all written comments received or postmarked
during the public comment period which will close on September 20,
2021.
ADDRESSES: You may submit written comments by the following methods:
<bullet> Email: <a href="/cdn-cgi/l/email-protection#eeaca2a3b1a6bfb1dddcdeb1ad818f82be9c81899c8f83bc8b98878b99ae8c8283c0898198"><span class="__cf_email__" data-cfemail="f3b1bfbeacbba2acc0c1c3acb09c929fa3819c9481929ea196859a9684b3919f9edd949c85">[email protected]</span></a>. This is the
preferred method of commenting.
<bullet> Mail, personal, or messenger delivery: National Coal
Program Review, In care of: Thomas Huebner, BLM Wyoming State Office,
5353 Yellowstone Rd., Cheyenne, WY 82009.
FOR FURTHER INFORMATION CONTACT: Lindsey Curnutt, Chief, Division of
Solid Minerals, email: <a href="/cdn-cgi/l/email-protection#ec808f999e82999898ac8e8081c28b839a"><span class="__cf_email__" data-cfemail="a2cec1d7d0ccd7d6d6e2c0cecf8cc5cdd4">[email protected]</span></a>, telephone: 480-708-7339.
Persons who use a telecommunications device for the deaf (TDD) may call
the Federal Relay Service at 1-800-877-
[[Page 46874]]
8339 to contact Ms. Curnutt. This service is available 24 hours a day,
7 days a week, to leave a message or question. You will receive a reply
during normal business hours.
SUPPLEMENTARY INFORMATION: On January 15, 2016, Secretary of the
Interior S.M.R. Jewell issued Order No. 3338 (Jewell Order), directing
the BLM to conduct a broad, programmatic review of its Federal coal
program through preparation of a Programmatic Environmental Impact
Statement (PEIS) under the National Environmental Policy Act (NEPA). 42
U.S.C. 4321 et seq. The Jewell Order was issued in response to a range
of concerns regarding the Federal coal program, including, in
particular, concerns as to whether American taxpayers are receiving a
fair return from the development of these publicly owned resources;
concerns about fluctuating market conditions and attendant consequences
for coal-dependent communities; and concerns about whether the leasing
and production of large quantities of coal under the Federal coal
program is consistent with the Nation's goals to reduce greenhouse gas
emissions to mitigate climate change. The Jewell Order directed a pause
on the issuance of new Federal leases for thermal (steam) coal, subject
to certain enumerated exclusions, until completion of the PEIS.
On March 29, 2017, former Secretary Zinke issued Secretary's Order
No. 3348 (Zinke Order) entitled, ``Concerning the Federal Coal
Moratorium.'' The Zinke Order rescinded the Jewell Order, lifted the
coal leasing pause, and halted preparation of the PEIS. On April 16,
2021, Secretary Haaland issued Secretary's Order 3398, which rescinded
the Zinke Order (Haaland Order). While the Haaland Order did not
reinstitute the Jewell Order, it directed the Department to ``review
and revise as necessary all policies and instructions that
implemented'' the revoked Secretary's Orders. This Federal Register
Notice is intended to further the goals of the Haaland Order by
beginning a new review of the Federal coal leasing program. The BLM has
not approved a new coal lease sale since the Biden Administration took
office.
Background
A. Overview of Federal Coal Program
Under the Mineral Leasing Act of 1920 (MLA), as amended, 30 U.S.C.
181 et seq., and the Mineral Leasing Act for Acquired Lands of 1947
(MLAAL), as amended, 30 U.S.C. 351 et seq., the BLM is responsible for
the leasing of Federal coal and regulation of the development of that
coal on the approximately 700 million acres of mineral estate that is
owned by the Federal Government. This responsibility includes Federal
mineral rights on Federal lands and Federal mineral rights located
under surface lands with non-Federal ownership. Other Departmental
bureaus, particularly the Office of Surface Mining Reclamation and
Enforcement (OSMRE) and the Office of Natural Resources Revenue (ONRR),
also take actions related to coal mining on Federal lands. The OSMRE,
and States that have obtained regulatory primacy under the Surface
Mining Control and Reclamation Act of 1977 (SMCRA), permit coal mining
and reclamation activities, and monitor reclamation and reclamation
bonding actions. The ONRR collects and audits all payments required
under a Federal lease, including bonus bids, royalties, and rental
payments, and distributes those funds, pursuant to statute, between the
U.S. Treasury and the States where the coal resources are located, 30
U.S.C. 191(a).
1. Federal Coal Leasing and Production
In recent years and on average, approximately 42 percent of the
Nation's annual coal production came from Federal lands. Federal coal
produced from the Powder River Basin in Montana and Wyoming accounts
for over 85 percent of all Federal coal production.
As of Fiscal Year 2020, the BLM administered 287 coal leases,
covering 437,039 acres in 11 States, with an estimated 7 billion tons
of recoverable Federal coal. Over the last decade (2011-2020), the BLM
sold 17 coal leases and managed leases that produced approximately 3.7
billion tons of coal and resulted in $9.2 billion in revenue
collections by the United States.
The U.S. Energy Information Administration (EIA) estimates total
U.S. coal production in 2020 was about 534 million short tons (MMst),
24 percent lower than in 2019.\1\ EIA estimates that U.S. total annual
coal imports reached a record high of about 36 million short tons in
2007. In 2020, the United States imported about 5 MMst of coal, which
was equal to about 1 percent of U.S. coal consumption in 2020.\2\
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\1\ U.S. EIA, Coal Data (August 4, 2021) (<a href="https://www.eia.gov/coal/data/browser/">https://www.eia.gov/coal/data/browser/</a>).
\2\ U.S. EIA, Coal Data (July 20, 2021) (<a href="https://www.eia.gov/energyexplained/coal/imports-and-exports.php">https://www.eia.gov/energyexplained/coal/imports-and-exports.php</a>).
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2. Federal Coal Program
The current BLM coal leasing program includes land use planning,
the processing of applications (e.g., applications for exploration
licenses and lease sales), estimation of the value of proposed leases,
lease sales, and post-leasing actions (e.g., production verification,
lease and production inspection and enforcement, royalty reductions,
and bond review).
The Federal Government receives revenue from coal leasing in three
ways: (1) A bonus that is paid at the time the BLM issues a lease; (2)
Rental fees; and (3) Production royalties. The royalty rates are set by
regulation at a fixed 8 percent for underground mines and not less than
12.5 percent for surface mines. For coal leases outside of Alaska,
Treasury pays approximately 50 percent of receipts to the State where
the leased lands are located, 30 U.S.C. 191(a). For leases and mineral
deposits in Alaska, Treasury pays 90 percent of the receipts to the
State, 30 U.S.C. 191(a).\3\ Federal coal development provides coal
producing states like Wyoming, Montana, Utah, and Colorado with
significant income and other economic benefits.
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\3\ Payments to the States are ``reduced by 2 percent for any
administrative or other costs incurred by the United States,'' and
``the amount of such reduction shall be deposited to miscellaneous
receipts of the Treasury.'' 30 U.S.C. 191(b).
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The BLM's planning process for Resource Management Plans, supported
by environmental analysis under NEPA, identifies areas that are
potentially available to be considered for coal leasing. The planning
process considers, among other things, the impacts of a ``reasonably
foreseeable development scenario,'' but it does not directly authorize
any coal leasing or determine which coal will be leased.
The Federal Coal Leasing Amendments Act of 1976 (FCLAA), which
amended Section 2 of the Mineral Leasing Act of 1920, requires that,
with limited exceptions, Federal lands available for coal leasing be
sold by competitive bid, with the BLM receiving fair market value for
the lease. While multiple bids are not required, all successful bids
must equal or exceed the estimated pre-sale fair market value for the
lease, as calculated by the BLM. Competitive leasing is not required
for: (1) Preference right lease applications for owners of pre-FCLAA
prospecting permits; and (2) Modifications of existing leases, where
Congress has authorized the Secretary to allow up to 960 acres
(increased from 160 acres by the Energy Policy Act of 2005) of
[[Page 46875]]
contiguous lands for noncompetitive leasing by modifying an existing
lease.
The BLM issued coal leasing regulations in 1979 that provided for
two separate competitive coal leasing processes: (1) Regional leasing,
where the BLM selects tracts within a region for competitive sale; and
(2) Leasing by application, where an industry applicant nominates a
particular tract of coal for competitive sale.
Regional coal leasing requires the BLM to select potential coal
leasing tracts based on land use planning, expected coal demand, and
potential environmental and economic impacts.\4\ This process includes
use of a Federal/State advisory board known as a Regional Coal Team \5\
to provide input on leasing decisions. The regional leasing system has
not been used since 1990, and currently all BLM coal leasing relies on
applications.\6\ Leasing by application begins with an application to
lease a tract of coal identified by the applicant.\7\ The BLM reviews
the application for completeness to ensure that it conforms to existing
land use plans and to ensure that it contains sufficient geologic data
to determine the fair market value of the coal. The agency then
prepares an analysis under NEPA (either an Environmental Assessment or
an EIS) and seeks public comment on the proposed lease sale. Through
this process, the BLM evaluates alternative tract configurations to
maximize competitiveness and value, and to avoid bypassing Federal
coal. The BLM also consults with other appropriate Federal and State
agencies and Tribal governments, and the BLM determines whether the
surface manager consents to leasing in situations where the surface is
not administered by the BLM.
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\4\ 43 CFR part 3420.
\5\ The BLM regulations require a Regional Coal Team to be
established for each coal production region, comprised of
representatives from the BLM and the Governors of each State in the
region. The Regional Coal Teams are to guide the coal planning
process for each coal production region, serve as the forum for BLM
and State consultation, and make recommendations on coal leasing
levels. 43 CFR 3400.4.
\6\ While the Powder River Basin (PRB) coal production region
was decertified in 1992, the PRB regional coal team is still in
place and meets periodically to review regional activity and make
recommendations on coal leasing in the region.
\7\ See 43 CFR subpart 3425.
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Preparations for the actual lease sale begin with the BLM
formulating, after obtaining public comment, a pre-sale estimate of the
fair market value of the coal. This estimate is confidential and is
used to evaluate the bids for the lease ``bonus'' received during the
sale. Sealed bids are accepted prior to the date of the sale and are
publicly announced during the sale. The winning bid is the highest bid
that meets or exceeds the coal tract's presale estimated fair market
value from an applicant that meets all eligibility requirements and has
paid the appropriate fees and payments.
There are two separate bonding requirements for Federal coal
leases. The BLM requires a bond adequate to ensure compliance with the
terms and conditions of the lease that must cover a portion of
potential liabilities associated with the bonus bid, rental fees, and
royalties. In addition, under SMCRA, the OSMRE or the State with
regulatory primacy requires sufficient bonding to cover anticipated
reclamation costs.
A Federal coal lease has an initial term of 20 years, but it may be
terminated after 10 years if the coal resources are not diligently
developed, 30 U.S.C. 207. Existing leases that have met their diligence
requirements may be renewed for additional 10-year terms following the
initial 20-year term.
3. Previous Comprehensive Reviews
The Department has previously conducted two separate, comprehensive
reviews of the Federal coal program. In the late 1960s, there were
serious concerns about speculation in the coal leasing program. A BLM
study discovered a sharp increase in the total Federal acreage under
lease and a consistent decline in coal production. In response, the
Department undertook the development of a planning system to determine
the size, timing, and location of future coal leases, and the
preparation of a PEIS for the entire Federal coal leasing program.
Beginning in February 1973, the Department instituted a complete
moratorium on the issuance of new coal prospecting permits, and a
moratorium with limited exceptions on the issuance of new Federal coal
leases: New leases were issued only to maintain existing mines or to
supply reserves for production, where ``near future'' meant that
development and production were to commence within 3 and 5 years,
respectively. The moratorium was scaled back over time, but was not
completely lifted until 1981, after the PEIS had been completed, a new
leasing system had been adopted through regulation, and litigation was
resolved.
In 1982, concerns about the Federal coal program arose again, this
time related to allegations that the Government did not receive fair
market value from a large lease sale in the Powder River Basin under
the new procedures adopted as part of the programmatic review in the
1970s. Among other reports on the issue, the Government Accountability
Office (GAO) issued a report in May 1983 concluding that the Department
had received roughly $100 million less than it should have for the
sale. In response, in July 1983, Congress directed the Secretary to
appoint members to a commission, known as the Linowes Commission, to
investigate fair market value policies for Federal coal leasing.
Congress also, in the 1984 Appropriations Act, directed the Office of
Technology Assessment (OTA) to study whether the Department's coal
leasing program was compatible with the nationally mandated
environmental protection goals.
As part of the 1984 Appropriations Bill, Congress imposed a
moratorium on the sale or lease of coal on public lands, subject to
certain exceptions, starting in 1983 and ending 90 days after
publication of the Linowes Commission's report. The Linowes Commission
published the Report of the Commission on Fair Market Value Policy for
Federal Coal Leasing in February 1984. The OTA report, Environmental
Protection in the Federal Coal Leasing Program, was released in May
1984. The principal message of these reports was that the Department
should: (1) Temper its pace of coal leasing; (2) improve and better
document its procedures for receiving fair market value; and (3) take
care to balance competing resource uses in making lease decisions.
Secretary of the Interior William P. Clark extended the suspension
of coal leasing (with exceptions for emergency leasing and processing
preference right lease applications, among others) while the Department
completed its comprehensive review of the program. This review included
proposed modifications to be made by the Department in response to the
Linowes Commission and OTA reports. Secretary Clark announced on August
30, 1984, that the Department would prepare an EIS supplement to the
1979 Programmatic EIS for the Federal coal management program. The
Department issued the Record of Decision for the Programmatic EIS
supplement in January 1986, in the form of a Secretarial Issue
Document. That document recommended continuation of the leasing program
with modifications. In conjunction with those modifications, Secretary
of the Interior Donald Hodel lifted the coal leasing moratorium in
1987.
On March 17, 2015, Secretary S.M.R. Jewell called for ``an honest
and open conversation about modernizing the Federal coal program.'' As
described
[[Page 46876]]
above, the last time the Federal coal program underwent comprehensive
review was in the mid-1980s, and market conditions, infrastructure
development, scientific understanding, and national priorities have
changed considerably since that time. The Secretary's call also
responded to continued concerns from numerous stakeholders about the
Federal coal program, including concerns raised by the GAO,\8\ the
Department's Office of Inspector General (OIG),\9\ members of Congress,
interested stakeholders, and the public. The concerns raised by the GAO
and OIG were centered on whether taxpayers receive a fair return from
the sale of federal coal. Others raised concerns that the current
Federal leasing structure lacks transparency and competition and is
therefore not ensuring that the American taxpayer receives a fair
return from Federal coal resources, while also raising questions
regarding current market conditions for the coal industry and related
implications for Federal resources. Stakeholders also questioned
whether the leasing program results in over-supply of a commodity that
has significant environmental and health impacts, including impacts on
global climate change.
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\8\ GAO, Coal Leasing: BLM Could Enhance Appraisal Process, More
Explicitly Consider Coal Exports, and Provide More Public
Information, GAO 14-140 (Dec. 2013).
\9\ OIG, Coal Management Program, U.S. Department of the
Interior, Report No.: CR-EV-BLM-0001-2012 (June 2013).
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In response to the Secretary's call for a conversation to address
these concerns, the BLM held five listening sessions regarding the
Federal coal program in the summer of 2015. Sessions were held in
Washington, DC; Billings, Montana; Gillette, Wyoming; Denver, Colorado;
and Farmington, New Mexico. The Department heard from 289 individuals
during the sessions and received more than 92,000 written comments
before the comment period closed on September 17, 2015. The oral and
written comments reflected several recurring themes:
<bullet> Concern about global climate change and the impact of coal
production and use.
<bullet> Concern about the loss of jobs and local revenues if coal
production is reduced.
<bullet> Support for increased transparency and public
participation in leasing and royalty decisions and concern that the
structure of the leasing program does not provide for adequate
competition or a fair return to the taxpayer for the use of Federal
resources.
<bullet> Support for increasing coal royalty rates because: (1)
Taxpayers are not receiving a fair return, in part because the royalty
rate should match that for offshore oil and gas leases; and (2) the
royalty rate should account for the environmental costs of coal
production.
<bullet> Support for maintaining or lowering coal royalty rates
because: (1) The coal industry already pays more than its fair share
and existing Federal rates are too high given current market
conditions; (2) raising rates will lower production and revenues; and
(3) raising rates will cost jobs and harm communities.
<bullet> Support for streamlining the current leasing process, so
that the Federal coal program is administered in a way that better
promotes economic stability and jobs, especially in coal communities
which are already suffering from depressed economic conditions.
After conducting these listening sessions, Secretary Jewell
determined that three areas of the program received the most attention
from the public: Concerns that American taxpayers were not receiving a
fair return on public coal resources, that the program conflicted with
national climate policy and goals, and that the structure of the
program needed review considering current market conditions. To address
the issues raised during these sessions, on January 15, 2016, Secretary
Jewell issued Secretary's Order 3338, directing the BLM to conduct a
broad, programmatic review of the Federal coal program through the
preparation of a discretionary Programmatic EIS under NEPA, 42 U.S.C.
4321 et seq. A Notice of Intent for the Programmatic EIS was published
in March 2016, and a scoping report was published on January 11, 2017.
On March 29, 2017, former Secretary Zinke issued Secretary's Order
No. 3348 (Zinke Order) entitled, ``Concerning the Federal Coal
Moratorium.'' The Zinke Order rescinded the Jewell Order, lifted the
coal leasing pause, and halted the preparation of the Programmatic EIS.
On January 20, 2021, President Biden issued Executive Order 13990,
``Executive Order on Protecting Public Health and the Environment and
Restoring Science to Tackle the Climate Crisis.'' On April 16, 2021,
Secretary Deb Haaland issued Secretary's Order 3398, which rescinded
the Zinke Order. The Department's programmatic review of the Federal
coal program furthers the goals of the Haaland Order.
In announcing this review and soliciting comments, the Department
notes that the regional leasing program authorized in the 1979
regulations has not worked as envisioned and, instead, the BLM has
conducted leasing only in response to industry applications. Given
previous concerns about the lack of competition in the lease-by-
application system, as well as consideration of the Biden
Administration's environmental goals, the BLM is beginning a new review
of the Federal coal leasing program and seeks comments on whether the
current regulatory framework should be changed to provide better
mechanisms to decide which coal resources should be made available and
how the leasing process should work, including when and where to lease.
The BLM is also seeking comments on the following topics:
a. Fair Return
The BLM is seeking comments on whether the bonus bids, rents, and
royalties received under the Federal coal program are successfully
securing a fair return to the American public for Federal coal, and, if
not, what adjustments could be made to provide such compensation.
b. Climate Impacts
The BLM seeks comments on how best to measure and assess the
climate impacts of continued Federal coal production, transportation,
and combustion.
c. Other Impacts
The BLM seeks comments on other potential impacts on public health
and the environment, such as the effects of coal production on: The
quantity and quality of water resources, including aquifer drawdown and
impacts on streams and alluvial valley floors; air quality and the
associated effects on health and visibility; wildlife, including
endangered species; and other land uses such as grazing and recreation.
d. Socio-Economic Considerations
The BLM seeks comments on whether the current Federal coal leasing
program adequately accounts for externalities related to Federal coal
production, including environmental and social impacts.
e. Exports
The BLM seeks comments addressing whether and, if so, how leasing
decisions should consider actual and/or projected exports of domestic
coal collectively or from any given tract and potential mechanisms that
could be used to appropriately evaluate export potential.
f. Energy Needs
Finally, the BLM seeks comments on how Federal coal supports
fulfilling the energy needs of the United States.
[[Page 46877]]
The BLM also welcomes suggestions for other potential approaches to
the Federal coal program including approaches that may differ from
those articulated below. We encourage commenters to be as specific as
possible in identifying the types of changes to the program that the
BLM should consider, including changes to regulations, guidance, and
management practices.
BLM also solicits input on the following:
1. Potential new leasing models, or potential reforms to the
previous or existing leasing models of regional leasing and lease by
application;
2. Other approaches to increase competition in the leasing process;
3. Data or analyses that justify a specific change to the royalty
rate;
4. Potential approaches to improve the pre-sale estimate of fair
market value;
5. Whether, and how, to account in the leasing process for the
extent to which reclamation responsibilities have been met;
6. Potential approaches to design a ``budget'' for the amount of
Federal coal and/or acreage to be leased over a given period; and
7. How to account for export potential in the leasing process.
In submitting written comments, individuals should be aware that
their entire comment--including personal identifying information
(including address, phone number, and email address)--may be made
publicly available at any time. While the commenter can request in the
comment that the commenter's personal identifying information be
withheld from public review, this cannot be guaranteed. All comments
from organizations or businesses, and from individuals identifying
themselves as representatives or officials of organizations or
businesses, will be available for public inspection in their entirety.
The DOI will consult with Indian tribes on a government-to-
government basis in accordance with Executive Order 13175 and other
policies. Tribal concerns, including impacts on Indian trust assets and
potential impacts to cultural resources, will be given due
consideration. Federal, State, and local agencies, along with Tribes
and other stakeholders that may be interested in or affected by the
Federal coal program, are invited to participate in the review.
Following closure of the comment period, the BLM will prepare a
comment summary report, make the report available to the public, and
will detail the scope and form of its programmatic review. The BLM's
goal is to announce additional steps for the programmatic review by
November 2021.
(Authority: 43 U.S.C. 1701 et seq., 30 U.S.C. 181 et seq., 30 U.S.C.
351 et. seq.)
Nada Wolff Culver,
Deputy Director, Programs and Policy, Bureau of Land Management.
[FR Doc. 2021-17827 Filed 8-19-21; 8:45 am]
BILLING CODE 4310-84-P
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