A federal judge reinstated a moratorium on coal leasing from federal lands that had been implemented during the Obama administration and was lifted under President Donald Trump. The ruling from U.S. District Judge Brian Morris requires government officials to conduct a new environmental review prior to resuming coal sales from federal lands. According to the judge, the government’s previous review of the program had not adequately considered the impacts of climate change from coal’s greenhouse gas emissions, among other effects. The National Mining Association is expected to appeal the ruling. The problem for Americans is that almost half the nation’s annual coal production—about 250 million tons last fiscal year—is mined from leases on federal land, mainly in Western states, including Wyoming, Montana and Colorado. Last year, 22 percent of U.S. electricity was generated from coal and 9 percent of coal demand was used by the industrial sector, much of it high-quality metallurgical coal.
Last year, the Biden administration began a review of the greenhouse emissions that result from coal mining on federal lands as it increased scrutiny of government fossil fuel sales. The review also was to consider if companies are paying fair value for coal extracted from public coal reserves in Wyoming, Montana, Colorado, Utah and other states. So far, no changes have been announced from that review. The coal program brought in about $400 million for federal and state treasuries through royalties and other payments last year and it supports thousands of U.S. jobs while providing secure American electricity.
The U.S. coal industry has been in decline since the Obama administration with banks pledging to end financing, companies divesting mines and power plants, and world leaders coming close to a deal to eventually end its use at COP26 last November that was foiled by China and India—the world’s two largest users of coal. That dwindling investment, however, has constrained supply and coal demand is now higher as Europe tries to wean itself off Russian imports by importing more seaborne coal and liquefied natural gas. Coal demand is so strong and natural gas prices so high at European power plants that some customers are buying high-quality coal typically used to make steel to generate electricity. Despite the increase in renewable capacity, coal remains the world’s main method of electricity generation, accounting for 36 percent of global electricity generation—up 9 percent from the previous year. The EU increased its coal generation even more—by 19 percent last year.
China tasked its coal industry to boost production capacity by 300 million tons this year, and the top state-owned producer said it would boost development investment by more than half. Coal India is also expected to develop new mines, under pressure to do more to keep pace with demand from power plants and heavy industry. China and India worked together at Cop26 in Glasgow last November to change language in a global climate statement to call for a “phase down” of coal use instead of a “phase out.” And while coal leasing has been stopped in the United States, companies in China, India and other parts of the world are making “mega profits.” Number 1 producer Coal India Ltd.’s profit nearly tripled to a record, while the Chinese companies that produce more than half the world’s coal saw first-half earnings more than double to a combined $80 billion.
The situation is so dire in Germany that a previously shuttered coal-fired power plant will be reconnected to the electricity grid, which demonstrates the failure of Germany’s energy transition to “green energy” and its policy of relying on Russian natural gas to back up its wind and solar technologies that cannot produce power 24/7. Germany is scrambling to secure energy sources before the winter months, resulting in the reconnection of the shuttered Mehrum coal power plant in Lower Saxony to its grid. The reinstatement was preceded by the German government implementing an emergency ordinance to allow mothballed oil and coal-powered plants to open back up until April of next year, as the country faces a shortfall in its energy due to the Russian invasion of Ukraine. It plans to bring back on line three lignite-fired power stations from the start of October.
While the German government has allowed for the return to coal power, its decision to shut its remaining nuclear power plants by the end of the year, continues—a move that followed years of anti-nuclear policies from former Chancellor Angela Merkel following the Fukushima accident in Japan caused by a tsunami. A group of Polish lawmakers, however, have presented Germany with a proposal to lease the country’s three remaining nuclear power plants that the German government has maintained its commitment to shut down.
Saxony Prime Minister Michael Kretschmerhas declared last week that the green agenda has failed. “The energy transition with gas as the base load has failed,” he said while calling for the remaining nuclear power stations to remain open during the current energy crisis. Germany has remained heavily reliant on Russian natural gas despite warnings from President Donald Trump. Currently, Germany is facing potential blackouts during the winter, which could lead to dangerous situations. Some cities have already begun putting rationing measures in place, including Hanover, which became the first major European city to begin rationing hot water, turning off water heating for public buildings and cutting off warm water in bathrooms and showers in swimming pools and sporting venues.
The coal situation in the United States is dire with dozens of coal plant retirements and now the judge’s decision is worsening the situation, particularly given that energy-driven inflation, energy affordability and energy security are top concerns for Americans. According to National Mining Association President Rich Nolan, “Denying access to affordable, secure energy during an energy affordability crisis is deeply troubling.” This is particularly the case when Germany is turning back to coal and China and India are both increasing their production and use of coal. The United States, under the Biden administration, is causing American energy policy to follow in Europe’s footsteps, which will result in a similar situation to Europe’s when intermittent wind and solar power are found not able to do the job. Americans are not accustomed to viewing electricity as a luxury item, but the government seems intent upon making it so.