The changes may have little immediate impact on the market for coal, which is facing stiff competition from cheaper natural gas and renewable energy, analysts say.
Even before the Obama administration imposed the coal-leasing moratorium in January 2016, producers had little interest in adding new federal reserves to their portfolios amid slumping domestic demand. The U.S. government has sold just one coal leases since October 2012, though earlier this month it approved a transaction originally sought in 2005. Existing federal leases contain at least 20 years’ worth of coal, according to Interior Department estimates.
Coal’s Decline
Even without the EPA’s Clean Power Plan in force because of the Supreme Court stay, using coal to generate electricity has been in decline as a result of previous pollution regulations and competition from low-cost natural gas, solar and wind.
The removal of the Clean Power Plan could halt coal’s decline as a source of electricity during the next two decades, according to projections from the Energy Information Administration. More coal use would mean less natural gas use, EIA said.
Trump’s action sets in motion at least a year of bureaucratic work at the EPA to formally dismantle the Clean Power Plan. And whatever happens will inevitably be challenged in court by those same environmental groups.
By contrast, the Interior Department can undo the coal leasing moratorium with the stroke of a pen, the same way it was imposed a year ago, under an administrative order issued by former Interior Secretary Sally Jewell.
Trump’s targets would also reduce the role of climate change in government decision-making. For instance, the social cost of carbon metric served as the linchpin for many Obama administration environmental rules. Critics say the number -- now nearly $40 for every metric ton of carbon dioxide emitted into the atmosphere -- gives artificial precision to uncertain conditions nearly 300 years in the future.
According to shared details of the executive order, the Trump administration will disband the working group that created the social cost of carbon and return to an earlier 2003 approach for calculating the costs and benefits of proposed regulations.
This article was provided by Bloomberg News.