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The federal coal leasing program is ripping off taxpayers. Zinke just canceled plans to reform it.

The new interior secretary gets started on Trump’s dirty work.

“If it’s broke, don’t fix it. That’s how that goes, right?”
(Photo by Chip Somodevilla/Getty Images)

Earlier this week, I wrote a post about Donald Trump’s decision, as part of his executive order on energy and climate change, to lift the moratorium on the leasing of coal on federal land. I made a simple point: The moratorium itself is not that big a deal, since coal companies haven’t exactly been clamoring for new leases lately. The big deal is the broad, comprehensive review of the coal leasing program launched in 2015 by Sally Jewell, who was at the time interior secretary under President Obama.

The review, not the moratorium, will shape the future of federal coal policy, I said, so keep your eye on the review.

Well, as of Wednesday, we have an update: The review has been scrapped. So much for that!

Zinke’s justifications for canceling the review are ... dubious

In a press briefing, Interior Secretary Ryan Zinke clarified that he would abandon the review process — the Programmatic Environmental Impact Statement, or PEIS — deeming it “expensive and unnecessary.”

It is difficult to exaggerate how demonstrably incorrect that judgment is, based on the Department of Interior’s own past statements and reports. (If you want the full background on the program and its flaws, read Brad Plumer’s explainer.)

How is Zinke justifying it? I asked DOI for some clarity on the review, and this is what press secretary Heather Swift told me:

The PEIS is over. In 2013, both the [Office of Inspector General] and the [Government Accountability Office] audited BLM's coal leasing program. Between The OIG and GAO there were 21 recommendations made to improve transparency in the leasing program to ensure that the American taxpayer was receiving a fair return from the coal program. BLM has addressed all 21 recommendations and works closely with the Office of Valuation Services to ensure that bonus bids are calculated appropriately. In addition, the Federal Royalty Policy Committee has been reestablished.

This is worth briefly unpacking.

In 2013, both OIG and GAO did separate audits of the coal leasing program. Their focus was narrow, solely on BLM valuation and auctioning procedures. BLM says, though it has offered no proof, that it addressed all those recommendations. (Note that “addressed” is different from “implemented.”)

But both OIG and GAO, along with numerous critics inside and outside government, made clear that those procedural tweaks were the tip of the iceberg — that the program suffered from far deeper flaws, including a near-total absence of competitive bidding, transparency, or clear procedures for balancing the demands of various environmental laws.

Last year, concluding the first phase of the PEIS, DOI came out with a massive scoping report that detailed the history of the leasing program and its many problems. It noted the OIG/GAO recommendations and BLM’s procedural tweaks in response, and then said this:

Many stakeholders expressed concerns that BLM’s corrective actions, while helpful, were insufficient to rectify fundamental weaknesses in the program. To further explore these concerns, Secretary Jewell and the BLM hosted a series of listening sessions in March 2015 across the country to hear from the public their views on what, if any, reforms were seen as needed to the Federal coal program.

It was those listening sessions and the hundreds of thousands of comments received there — the overwhelming majority of which were critical of the program — that led Jewell to establish the PEIS (and the moratorium) in the first place.

“The OIG and GAO were valuable reports on how to make the leasing system do a better job within the existing leasing structure,” says Dan Bucks, a former Montana director of revenue who has testified to Congress on the flaws in the leasing program, “whereas the coal PEIS was aimed at remodeling and rebuilding the structure itself.”

The idea that the former is a substitute for the latter, which DOI seems to be claiming, is not credible.

The PEIS was a transparent process. The committee that’s replacing it will be a black box.

Similarly, the idea that a reestablished Federal Royalty Policy Committee is an adequate substitute for the PEIS does not hold up to even cursory scrutiny.

The committee will have a much narrower charter, focusing on royalty payments alone, not reform of the overall program. It will have 28 members, appointed by Zinke, which leaves open the possibility (or, given the administration’s record, near certainty) that it will be packed with representatives from fossil fuel industries who see their mission as reducing costs to private companies, not increasing revenue for taxpayers.

Most of all, the committee will be a black box, its deliberations hidden from the public, so there will be no way to know why it reaches the decisions it reaches. This is in contrast to the lengthy, open, and transparent PEIS process.

This is the worst-case scenario for the federal coal leasing program

In short, this looks like the worst-case scenario for the federal coal leasing program. It will go forward using procedures and pricing that have been clearly identified as inadequate, ripping off taxpayers, subsidizing the profits of coal executives, and working against national climate policy. Comprehensive reform is out the window, replaced by a politically appointed board that will set prices behind closed doors.

The hope that any corner of sane climate policy will escape Trump’s wrecking ball is looking rather forlorn.

Addendum: The lawsuits have already begun

A coalition of environmental groups, along with the Northern Cheyenne Tribe, announced on Wednesday they were suing DOI over the lifting of the moratorium.

“The Tribe is likely to bear the brunt of the decision to resume coal leasing,” the press release says. “Approximately 426 million tons of coal encompassed by the program are located near the Northern Cheyenne Reservation at the Decker and Spring Creek mines in Montana.”

The lawsuit has a simple premise: a) the law says that major decisions by federal agencies have to undergo National Environmental Policy Act review; b) the decision to lift the moratorium is major, it did not undergo a NEPA review, and therefore it is unlawful. (You can read the complaint here.)

There’s no telling how this suit will turn out. But one thing’s for sure: There are going to be dozens and dozens of such lawsuits filed in coming years. Trump’s executive order — vague, over-broad, and legally dubious — guarantees it.