Trump order rolling back energy policies will rip off American taxpayers for years to come

Corporate giveaway won’t bring coal back

Coal Mine in Wyoming | BLM

Today President Trump signed an executive order to demolish climate and energy policies set by the previous administration — eliminating some altogether and instructing regulators to rewrite key rules related to energy development. While the focus of the executive order is dismantling the Clean Power Plan, two provisions will particularly impact Western states and taxpayers across the country — lifting the temporary moratorium on federal coal leasing and rewriting rules designed to limit methane waste during natural gas production.

Oil, natural gas, and coal provide an important source of revenue to American taxpayers. For example, 40 percent of all coal mined in the United States is mined on federal land. Similarly, production on federal land accounts for 5 percent of the nation’s oil supply, along with 11 percent of our natural gas supply. In years past, an antiquated system of policies ensured oil, gas and coal companies received sweetheart deals for resource extraction, while taxpayers were consistently shortchanged. The Obama administration established several new rules to ensure taxpayers receive a fair share from energy development on public lands. Unfortunately, two of those rules stand to be erased under Trump’s new order.

In 2015, the Obama administration placed a temporary moratorium on federal coal leasing, providing time to reassess and modernize the program. Lifting the coal moratorium, as directed by today’s executive order, will allow coal companies to buy leases on public lands and mine federally-owned coal for prices far below market rates. Under this system, taxpayers lose an estimated $1 billion each year, as companies sell coal to their own subsidiaries at a less than market price, avoiding royalty payments in the process.

Coal leases purchased before the moratorium went into place were significantly undervalued. Coal companies often pay less than $1 per ton on leases. And from 1990 to 2012, 91 percent of all coal leases had only one qualified bidder.

Lifting the moratorium will do nothing to help coal compete against cheap natural gas, and won’t help Trump keep his promise of restoring coal jobs. The proliferation of cheap natural gas has made coal less financially viable — causing coal companies to go bankrupt and major coal power plants to shut down. Today’s action is a solution in search of a problem, as companies are not looking to secure new coal reserves amid this industry slowdown. Peabody Energy, who recently exited bankruptcy, said it won’t be looking for another federal coal lease for at least a decade.

President Trump’s new executive order will also direct the Bureau of Land Management (BLM) to rewrite rules designed to limit methane waste by requiring oil and gas producers to detect and plug methane leaks.

As oil and gas companies drill on public lands, large amounts of methane are wasted through leaks and flares — a total of 462 billion cubic feet were wasted between 2009 and 2015. Because companies don’t pay royalties on leaked natural gas, taxpayers have lost out on up to $64 million each year.

The BLM estimated the methane waste rule will cost companies $110–279 million in compliance costs annually, but that the benefits to taxpayers will exceed the costs by $46–204 million each year. This makes sense, as capturing natural gas means more gas to sell and jobs would be created to develop and install leak prevention technology. Public opinion research from Colorado College found that 81 percent of Western voters favor keeping the methane waste rule.

Make no mistake, President Trump’s executive order will benefit oil, gas, and coal CEOs while ripping off taxpayers. It seems that when Secretary Zinke recently declared that the Interior Department is in the “energy business,” he meant the Trump administration negotiates deals for energy executives, not all Americans.