On November 27, the Bureau of Land Management (BLM), a subagency of the Department of the Interior (DOI), announced a decision to prohibit new coal leases on federal lands across much of the Powder River Basin. The BLM oversees approximately 570 million acres of federal land containing the federal coal mineral estate and manages the federal coal leasing program.

Historically, both federal and nonfederal lands in the Powder River Basin, spanning Montana and Wyoming, have produced significant amounts of coal. However, the rise of widespread fracking in recent years has led to significantly lower natural gas prices and a rapid decline in U.S. coal demand. Largely in response, total domestic coal production has fallen by more than 50% since its peak in 2008.

The BLM uses landscape-level plans, known as resource management plans, to guide management decisions and actions on public lands, including mineral leasing. The newly updated Miles City (Montana) and Buffalo (Wyoming) plans cover more than 12 million acres of subsurface federal coal estate in the Powder River Basin. These plans allow existing permitted mines to continue operating on federal land but prohibit their expansion and block new leases.

Federal lands—and the resources they contain—belong to the American public. Over the past decade (FY2014–FY2023), more than 3 billion tons of coal were produced on federal lands, representing a 32% decline compared to the previous decade. Coal production on federal lands in the Powder River Basin alone accounts for over 85% of all federal coal production.

The BLM anticipates that restricting new leasing will not significantly impact existing coal production in the near term. According to a BLM analysis, “operating mines in the planning area have existing leases with sufficient coal reserves to maintain existing mine production levels” until at least 2035 for Spring Creek Mine (Montana), 2060 for Rosebud Mine (Montana), and 2041 for Wyoming mines. The BLM also cites concerns about increased greenhouse gas emissions as a factor in its decision to end new leasing in the region.

The halt on new coal leasing in the Powder River Basin is a fiscally prudent decision that reduces the risk of long-term financial liabilities and delivers welcome news for taxpayers. For decades, TCS has pushed for reforms to the federal coal leasing system to ensure taxpayers receive a fair market value for the extraction of these public resources while protecting them from costly reclamation liabilities caused by abandoned mine sites.

For far too long, taxpayers have been shortchanged by outdated leasing practices, opaque fair-market-value determinations, and outdated royalty rates. Inadequate bonding requirements also left taxpayers on the hook for costly cleanup bills when coal companies declared bankruptcy without securing necessary funds for reclamation.

Efforts to reform the federal coal leasing program have spanned more than a decade. From comprehensive federal reviews and leasing pauses to continuous mine expansions and export proposals, the future of coal in the U.S. has been a hotly contested political fight. But the bottom line for taxpayers: the federal government must address systemic issues within the coal leasing program, reduce long term financial risks, and transition toward a more reliable and less costly energy future.

Additional Resources

• TCS Statement on Updated Leasing Policies in the Powder River Basin: May 2024 – Statement on the BLM’s announcement to pursue the no-leasing alternative in the Miles City and Buffalo Resource Management Plans.

• TCS Comments to Bureau of Land Management on Federal Coal Program Review: June 2023 – Comments on the BLM’s Programmatic Coal Review.

• Federal Judge Reinstates Coal Leasing Pause: August 2022 – Analysis of the United States Montana District Court’s reinstatement of a pause on the leasing of federal lands for coal production.

• TCS Comments on Federal Coal Program Review: October 2021 – Comments on the BLM’s “Notice of Intent To Conduct a Review of the Federal Coal Leasing Program and To Seek Public Comment.”
• TCS Testimony to House Natural Resources Energy and Mineral Resources Subcommittee: September 2019 – Prepared Testimony of Ryan Alexander, president, Taxpayers for Common Sense submitted to the U.S. House Natural Resources Committee Energy and Mineral Subcommittee for the “Legislative Hearing on Fossil Fuel Development: Protecting Taxpayers and Eliminating Industry Giveaways.”