Fate of National Coal Leasing Program Gets Day in Court

Dec. 13, 2018, 11:30 AM

A central piece of President Donald Trump’s pro-coal platform will be tested Dec. 13 in a federal court in Montana.

Hanging in the balance: the fate of the national coal leasing program. The Obama administration put new leases on hold in early 2016 while it studied the program’s environmental and economic effects. The Trump administration restarted the program two months after taking office.

Now, a coalition of environmental groups will claim in oral arguments Dec. 13 that Trump’s restart was improper because it bypassed an environmental review they said was required under the National Environmental Policy Act.

According to the complaint filed by the coalition Citizens for Clean Energy and others in the U.S. District Court for the District of Montana, the reopening of the program qualified as a “major federal action significantly affecting the quality of the human environment.”

‘Common-Sense Reforms’

As a result, the complaint alleges, the Interior Department was required to prepare a detailed document known as a programmatic environmental impact statement before restarting the leasing program—a step the government concedes it didn’t take.

“If the Trump administration wants to lease all public lands for coal mining, it can—it just has to go through the right process,” Nathaniel Shoaff, a senior attorney at the Sierra Club, which is a party to the litigation, told Bloomberg Environment.

“Here they were in such a rush to try and undo common-sense reforms that were being evaluated that they just rushed headlong into something that the law doesn’t allow them to do,” Shoaff said.

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Environment is operated by entities controlled by Michael Bloomberg.

Mere Policy or Major Action?

In response, the Justice Department, representing Interior, will argue that restarting the leasing program was merely a “statement of policy,” not a major federal action under the National Environmental Policy Act.

The environmental groups can’t identify any major effects of reopening the program, which is “the hallmark of major federal action,” the Justice Department said in its brief. “All they can point to is harm from possible future leasing, which is remote in time and separated by considerable administrative process.”

The administration’s position was underscored in a March 2017 memo from Michael Nedd, then-acting director of the Bureau of Land Management, who wrote that the comprehensive impact statement wasn’t needed to recommend reforms to how the program affects financial returns to taxpayers, climate change, resource management and protection, or program administration.

The mining industry also considers the litigation “an open-and-shut case,” Ashley Burke, a spokeswoman for the National Mining Association, told Bloomberg Environment.

To make their case, both Burke and the Justice Department pointed to a June 2018 case before the D.C. Circuit, Western Org. of Res. Councils v. Zinke. In that case, the court found that a supplement to the original programmatic environmental impact statement for the coal leasing program, done in 1979, wasn’t required for the program’s reopening because no major federal action had been proposed.

But Michael Saul, an attorney with the Center for Biological Diversity, countered that the new case is “unmistakably distinct” from the U.S. Court of Appeals for the District of Columbia Circuit case because it was filed in November 2014, well before the Obama administration imposed its moratorium and the Trump administration ended the moratorium.

“This is not a case about whether you need to supplement the analysis of a program that’s been chugging along for 40 years, but rather the new decision to reopen coal leasing,” Saul told Bloomberg Environment. “That’s a discrete federal action and that’s reviewable.”

The Center for Biological Diversity is one of the plaintiffs in the litigation.

Limited Effect on Production

The federal government has been leasing coal on public lands since 1920.

Under the federal coal leasing program, the Bureau of Land Management sells leases to private companies that lets them mine for coal on federal land. The companies pay a royalty to the government based on how much coal they extract. Some 40 percent of the coal burned in the U.S. comes from federal lands, mostly in the west.

Roughly 40 percent of U.S. coal is mined on federal lands.

The reopening of the leasing program has had limited effect, because the demand for coal has sunk as energy producers switch to cheaper natural gas and renewables.

Moreover, the big coal companies already have many years’ worth of coal already under lease, they said. Existing leases were not affected by the Obama moratorium.

The case is Citizens for Clean Energy v. U.S. Dep’t of the Interior, D. Mont., No. 4:17-cv-00030, 12/13/18.

To contact the reporter on this story: Stephen Lee in Washington at stephenlee@bloombergenvironment.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com; Susan Bruninga at sbruninga@bloombergenvironment.com; Jean Fogarty at jfogarty@bloombergenvironment.com

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