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Federal coal moratorium brings even tougher times for US mine towns

The Obama administration announced a moratorium on coal-leasing on federal lands last week, adding further strain to an industry that is undergoing a possibly irreversible downturn.

Mead Gruver/AP
The Belle Ayr Mine near Gillette, looms over a northeastern Wyoming coal town where the owner has filed for Chapter 11 bankruptcy and worries about the local economy run high, Thursday. The coal industry has been hit hard by bankruptcies, new pollution rules, and the decline of a once-promising export market, and now, the federal government’s blocking of new coal sales has left people in places like Gillette, in a rare mood: pessimistic.

The US coal industry has been in decline for years, a high-profile victim of federal efforts to limit American greenhouse gas emissions, and a new moratorium on new leases for coal mined on federal lands is crystallizing for many coal towns around the country that the historically boom-and-bust industry may be entering a prolonged slump.

Interior Secretary Sally Jewell announced the moratorium on Friday, saying it was time to review the decades-old leasing program for a variety of reasons, from the environmental and health impacts of coal burning to whether Americans are getting fair return on the sales.

"It is abundantly clear that times are different in the energy sector now than they were 30 years ago," Secretary Jewell said in a conference call with reporters, The Washington Post reported. "We must undertake a review, and that’s what we need to do as responsible stewards of the nation's assets."

The US coal industry has been besieged on several fronts, facing economic pressure from cheaper, cleaner fuels like natural gas and regulatory pressure from a federal government seeking to limit greenhouse gas emissions. Some of America's largest coal companies have filed for bankruptcy in the past two years, and communities that have long relied on the industry are beginning to seriously prepare for a post-coal future.

President Obama's efforts to reduce US greenhouse gas emissions have taken a particular toll on the coal industry. His Clean Power Plan, a suite of regulations implemented last year, targets coal-burning power plants specifically with strict emissions reduction requirements.

The leasing program is the newest target for reform. The program has been criticized for years, allowing mining companies to access vast quantities of coal for pennies per ton, mostly in western states. The moratorium will last for three years while the Interior Department reviews the program.

The Powder River Basin in Wyoming and Montana, which has so far managed to endure the industry's ups and downs, may struggle during the moratorium. The region supplies about 40 percent of America's coal, and the sudden idling of the massive strip mines represents an alarming turn for communities that have relied on the industry not just for jobs, but for some of their core functions.

In the town of Gillette, Wyo., the industry has brought thousands of jobs as well as top-of-the-line schools and a $53 million recreation center. Even non-mining businesses around town are suffering.

"All these rules and regulations just make it harder to conduct business," Susan Doop, owner of a local alternative therapy business, told the Associated Press. "Everything [Mr. Obama] does to make it more costly to do business makes it harder. People are losing their jobs."

Robert Godby, director of the Center for Energy Economics and Public Policy at the University of Wyoming in Laramie, said the twin pressures of market conditions and new regulations has crippled the coal industry, perhaps permanently.

The leasing moratorium, he added, represents "more nails in the coffin. I don't want to say they’re already dead, but you get the idea."

While the moratorium is expected to mostly impact western states, coal towns in Appalachia have been adapting to the decline of coal for years now.

Duane Miller, deputy director of an economic development agency in southwestern Virginia, told The Christian Science Monitor in November that the region has started to look at how to fill the sizable hole left in its economy by the decline of coal.

"Traditionally, when we've had these downturns it's always come back," he said. "We've tried to re-educate a lot of people to say, 'Yes it may come back in one form or another, but we really need to start looking at other opportunities and other industries that we can bring into the area.' "

This report contains material from the Associated Press.

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