By Michael Bastasch
August 6, 2017 - The Interior Department has filed a repeal of an Obama-era rule to raise mineral royalties on federal lands, the morning after President Donald Trump held a rally in the heart of coal country.
Officials noted the royalties rule had “several significant defects in the rule that would have undermined its purpose and intent” and made it ripe for repeal, according to Friday’s regulatory filing.
The move comes the morning after Trump held a rally in West Virginia, a major coal-producing state. Trump highlighted his efforts to reboot the coal industry at the rally, and the Gov. Jim Justice announced he was switching party affiliations from Democrat to Republican.
“We are putting our coal miners back to work. We have ended the war on beautiful, clean coal,” Trump said at Thursday night’s rally. “We have stopped the EPA intrusion. American coal exports are already up.”
The Obama administration royalty rule mostly affected coal production in western states, not Appalachia, but it’s another example of how Trump is working to repeal rules unpopular with coal country.
Interior claims rule would be too difficult to enforce, may affect royalty payments to states and “would impose a costly and unnecessary burden on Federal and Indian lessees,” officials wrote.
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The repeal is part of Trump’s 180-day review of regulations hindering energy production. The royalty rule was finalized at the tail end of the Obama administration and would have made it more expensive to mine coal and drill for oil and gas on federal lands.
The Obama administration’s royalty rule also came with a moratorium on new coal mining leases on federal lands. Trump already reversed the mining moratorium, and now is keeping royalty rates the same.
Interior officials found the rule “would unnecessarily burden the development of Federal oil and gas and Federal and Indian coal beyond the degree necessary to protect the public interest or otherwise comply with the law,” according to their filing.
Environmentalists heavily lobbied the Obama administration to crack down on fossil fuel production on federal lands, arguing the government is leasing land to coal companies below market rates.
Coal companies argued the effective royalty rate they pay is much higher than activists let on because of additional fees that go with assuming the lease.