In the News

A non-partisan think tank is forewarning the electorate to disregard the political rhetoric and to ask hard questions. New York University School of Law’s Institute for Policy Integrity says that when candidates discuss the economics of regulations, voters need to wear their thinking caps. The variables used to arrive at calculations are glossed over while the “bottom lines” are publicized.

As Richard Revesz, the former NYU law school dean, and Jack Lienke have shown, much of the coal industry infrastructure has long outlived its intended natural life cycle. As these plants retire, the reality is that they are already being replaced with natural gas. That was the context for Clinton’s unfortunate remarks. In point of fact, she has put forward a plan to help transitioning workers.

The federal leasing program for onshore oil and gas is plagued by environmental and economic questions. The time is ripe for a review of this program.

The Obama administration recently reversed its plan to allow drilling off of the mid-Atlantic coast, which it proposed in 2010, suspended after the Deepwater Horizon spill, then floated again in 2015. Critics have attacked the Atlantic decision, arguing that the government is turning its back on much-needed revenue and resources.

But this line of thinking rests on a flawed economic rationale that ignores our ability to revisit decisions in the future. This “now-or-never” fallacy has driven U.S. offshore leasing policy for years. Convincing the Department of the Interior to finally adopt an economically rational approach that values delaying risky decisions required a lengthy advocacy campaign and a federal lawsuit. Offshore leasing decisions can be incredibly complex, and should be informed by balanced economic analysis.

In managing federal lands, Interior has the statutory obligation to earn “fair market value” for the American public when developing natural resources, and to balance energy production with environmental preservation. By using modern economic tools, Interior can illuminate coal’s hidden costs and make straightforward reforms to the federal coal program, benefiting the American public.

“The federal government really does have market share,” says Jayni Hein, policy director for New York University’s Institute for Policy Integrity and co-author of a recent report, “Illuminating the Hidden Costs of Coal.” While a similar move for oil and gas leases might simply shift more of the production to private land, she says, the coal industry doesn’t have that flexibility.

“This is a major shift that helps modernize the federal coal program,” said Jayni Hein, policy director at the Institute for Policy Integrity. “This planning process will disclose the environmetal and social impacts of coal leasing, which are extensive.”

The U.S. Department of the Interior announced last week that it is canceling future lease sales in federal Arctic waters off Alaska’s northern coast, a decision that places future Arctic offshore drilling on ice.

As the Obama administration makes strides to reduce downstream greenhouse gas emissions from coal-fired power plants, the Department of the Interior should also take steps to account for the upstream costs of coal mining on federal lands.

Coal companies should be charged as much as five times what it costs them for surface mining on federal lands, according to a new report. “In some cases, it’s gaming the system, in other cases, it’s using the rules to the best of their advantage,” says Jayni Hein, the study’s lead author and policy director at the NYU School of Law’s Institute for Policy Integrity, which released the report this week. “There’s no reason these companies should be able to lease coal for the same price they were able to decades ago.”