Biden Wants End to New Leases for Coal Extraction

The Biden administration recently announced that it would be terminating new coal leasing in the Powder River Basin of Montana and Wyoming. This geologic structural basin is the biggest coal-producing region in America. It is comprised of the North Antelope Rochelle mine and the Black Thunder coal mine.

Overall, the state of Wyoming is the largest producer of coal in the United States, making up 41% of the nation’s total supply for coal. Coming in second is the state of West Virginia, accounting for 14% of total coal supplied. In recent years, the region has also become a major producer of natural gas.

The recent announcement regarding coal leasing was made by the U.S. Bureau of Land Management in response to a suit filed by environmentalists. The administration’s decision follows a ruling made earlier in the year that repealed an Obama-era ban on new coal leasing.

The Wyoming field office under the agency conducted an environmental study before making its decision, noting in its report that new coal leasing would greatly affect human health and the overall climate of the region. In the conclusion, the field office noted that this was primarily because of coal being burned at the plants.

Environmental groups involved applauded the administration’s decision, estimating that roughly six billion tons of coal would remain underground and, in turn, help reduce pollution. In a statement, Mark Fix of the Northern Plains Resource Council stated that the plan to terminate coal leasing reflected the reality of coal markets today.

The White House administration expects that its decision will fuel protests from coal-producing states such as Wyoming as well as the industry as a whole. This could be because the new rule will limit access to new markets for states such as Wyoming, whose coal industry has, for a while now, been struggling as more cities on the West Coast ban power generation using coal.

It is important to note, however, that the new rule will not bar companies from developing federal leases that have already been issued.

In a recent statement, GOP Senator John Barrasso claimed that the Biden administration was waging war on coal families and communities in the state. This, the Wyoming senator noted, would cost the state hundreds of millions of dollars used to pay for roads, public schools and other necessary services while also reducing job opportunities.

Associations in Wyoming have 30 days to file formal protests against the recent decisions made concerning Powder River Basin.

As more jurisdictions move to stop issuing leases for coal extraction, major producers such as Warrior Met Coal Inc. (NYSE: HCC) could find themselves having fewer areas in which to conduct coal-extraction operations.

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