Senate Democrats are urging President Obama to jack up federal fees on coal nearly five-fold to account for the effects of climate change, while introducing legislation that would ban coal exports.
“It makes no sense to subsidize coal companies to mine coal from federal lands just to export it and increase quantities of it abroad, where it will be burned to worsen climate change,” said Sen. Ed Markey, D-Mass., a leading proponent for regulating carbon dioxide from the burning of fossil fuels on Wednesday.
Markey joined with fellow Democratic Sens. Sheldon Whitehouse of Rhode Island and Richard Blumenthal of Connecticut in a letter to President Obama Tuesday, urging him to reform the federal coal-leasing program “to protect America’s climate change goals.”
The senators began their push to ratchet up coal royalties to coincide with the president’s trip to Paris to negotiate a global deal to reduce greenhouse gas emissions from fossil fuels, which many scientists say is causing the Earth’s climate to warm.
The senators want the president to direct the Interior Department to raise the royalty rate that coal companies have to pay to mine on federal lands. They argue that the current rate of 12.5 percent of the market value of the coal does not reflect the heavy social cost when considering the effect is has on global warming.
The royalty rate “does nothing to take into account the costs for climate change and human health associated with burning federally owned coal,” the letter reads.
They want Obama to direct Interior to raise the rate to 50 percent, which they argue would fully account for the effects of burning coal on the health of the planet. This would have the effect of making U.S. coal less attractive in Asia, which represents a large source of demand. The senators say the new rate would bring in billions of dollars to federal coffers, according to the letter.
It also could drive up prices for electricity in states where coal makes up a large part of the power supply.
“We need to reform a federal coal program that is selling coal at bargain-basement prices to the detriment of the American taxpayer’s economic and public health and properly account for the full cost to human health and the environment of producing any publicly owned coal,” Markey said.
The senators also introduced legislation this week that would reform the coal-leasing program and ban coal exports. The bill also directs Interior to suspend all new coal leasing until the reforms are implemented.
