Reforming the US Coal Leasing Program

by Emil Morhardt

Almost half of the coal mined in the US comes from lands, mostly in Wyoming and Montana in the Powder River Basin (PRB), owned by the federal government and which have nearly 10% of the world’s known reserves. Gillingham et al. review the social costs of this coal extraction, and weigh them against the revenues flowing to the government from the leases and the resulting relatively low energy prices paid by consumers. According to their calculations, the monetized climate change damages caused by combustion of this coal are about six times the coal price of $0.51 per million British thermal units, which is only about a third of the price of coal from other major producing basins. Continue reading