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responsibilities, BLM oversees the leasing of federal lands for coal mining, covering around 2.3 million square kilometres of land. The federal leasing programme also includes establishing royalty rates for coal mining and environmental protections associated with mining. In an effort to remobilise investment in coal mining, the administration in March 2017 lifted a moratorium that had been in place since January 2016 on new coal leases on federal lands to evaluate their environmental impacts and reassess royalty rates.

Environmental regulations on coal-fired power generation are predominantly directed by the EPA, based on authority granted to it under the Clean Air Act and its amendments. National Ambient Air Quality Standards (NAAQS) are established for six so-called criteria pollutants, including NOx, SO2, ozone, lead, carbon monoxide and particulate matter (EPA, 2019a). The Clean Air Act defines two types of NAAQS: primary standards for public health protection and secondary standards for public welfare protection. The EPA defines air quality control regions and designates them as either “attainment” or “non-attainment”, depending on whether they are, respectively, in compliance with required levels or not (EPA, 2019b). States then implement the standards through state implementation plans under the EPA’s oversight and with guidance from a menu of control measures provided by the agency. The EPA is required to review (and update, if needed) NAAQS every five years. For other pollutants not covered by NAAQS, the EPA sets National Emissions Standards for Hazardous Air Pollutants based on maximum achievable control technology.

Under 1977 amendments to the Clean Air Act, Congress established the New Source Review (NSR), which requires facilities, including power generators, to obtain specific permits. NSRs include Prevention of Significant Deterioration (PSD) permits for new or upgraded facilities to meet NAAQS, non-attainment permits for modifications that do not meet NAAQS, and minor source permits for facilities that do not require PSD or non-attainment permits (EPA, 2019c). Following the 2007 Massachusetts v. EPA Supreme Court case, the EPA is also required to regulate GHG emissions.

The DOE Office of Fossil Energy leads federal government R&D efforts related to fossil fuel-based power generation. Areas of focus include power plant efficiency, CCUS and water management. The office’s research is conducted in close collaboration with national labs, also under the purview of the DOE.

US states also have regulatory authority over coal mining and power sector operations within their borders. As such, states with coal mining operations can have more stringent health and safety regulations governing coal mining, which can impact the outlook for coal supply.

US coal exports are not subject to any federal regulatory approvals, though coal export terminals must undergo environmental reviews for permitting. Depending on their location, the relevant state’s regulators lead the permitting reviews; the US Army Corps of Engineers also plays an important role at the federal level.

Policy and regulation

The coal sector is subject to a wide array of policy and regulation at both the point of production and at final csumption. The administration considers the economic costs of

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existing regulations on the energy sector as exceeding their benefits, and is rolling back a number of environmental regulations, including those that have raised costs for coal production and coal-fired generation.

Coal mining

Coal mining is subject to an excise tax that funds the Black Lung Disability Trust Fund. In 2018, underground coal mining was subject to a USD 1.10 per tonne excise tax while surface mining was subject to a USD 0.55 per tonne tax, limited to 4.4% of the sales price. Based on the original rules of the Trust Fund from 1977, in 2019, the taxes fell to USD 0.50 for underground mining and USD 0.25 for surface mining, limited to 2% of the sales price (Congressional Research Service, 2019).

In September 2017, the Interior Department repealed the so-called Valuation Rule, which changed the way that royalty payments for coal (and oil and gas) production on federal and tribal lands were calculated. Specifically, the 2017 Valuation Rule required companies to value coal production for royalty payments based on gross proceeds from the first unaffiliated customer (known as the first arm’s-length sale) in order to minimise perceived underpayment of royalties on the part of coal mining companies that use affiliated brokers to settle royalty payments on exports (Reuters, 2017). The intent of repealing the 2017 rule was to minimise confusion and uncertainty to the coal industry. The changes will affect PRB producers the most given longer distances that the coal is shipped (warranting the use of more brokers), causing the delivery price to be several times what the miner receives. To help develop a replacement rule, the Interior Department directed the Royalty Policy Committee to propose alternative options, a process that is still ongoing. In the meanwhile, the pre-2017 system of calculating royalties will remain intact. The committee in September 2018 recommended granting companies the option to choose between two methods for calculating royalties – either based on how much they are paid (the traditional approach) or based on the quality and quantity of what they produce (Seattle Times, 2018).

In order to lower regulatory costs for the coal mining industry, Congress in February 2017 passed a “resolution of disapproval” under the Congressional Review Act to repeal the Stream Protection Rule that took effect in January 2017 (The New York Times, 2017). Though rarely used, the Congressional Review Act allows Congress to revoke an executive rule within 60 days of it taking effect (Congressional Research Service, 2001). The rule restricted coal companies from placing debris from mountaintop coal mining into streams, which companies contended would make mountain removal mining (mostly used in Appalachian operations) uneconomical (Congressional Research Service, 2017). A proposal to replace the rule has not yet been issued.

From a health perspective, to reduce the incidence of black lung disease among coal miners, which had started to trend up after 2000, the administration in 2014 finalised a new coal dust rule that imposed lower dust exposure limits and increased sampling frequencies on coal mining operations (The New York Times, 2018). The rule was upheld by the courts in 2016 following an industry challenge over its cost burdens. As part of the administration’s broader review of regulations, the Department of Labor’s MSHA began a review of the coal dust rule in 2017, but has not proposed any changes.

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Environmental regulations for coal-fired power plants

Among the environmental rules that have had or are expected to have the greatest impact on coal-fired generation are ozone standards, the Mercury and Air Toxics Standard (MATS), the Cross-State Air Pollution Rule (CSAPR) and the Affordable Clean Energy (ACE) rule.

The most recent update to ozone NAAQS occurred in October 2015, which updated the 2008 standard of 0.075 parts per million (ppm) to 0.070 ppm (EPA, 2018a). The administration issued a proposed rule making for implementation in 2016, and finalised implementation requirements in 2018, which also cover requirements for coal-fired generators (Power Magazine, 2018). The standard and implementation rules are the subjects of legal challenges. The EPA plans to complete its next review of the ozone NAAQS by 2020.

The EPA in 2011 finalised the MATS, which imposed limits on mercury emissions from coal-fired power plants. Control technologies include selective catalytic reduction with flue-gas desulphurisation and activated carbon injection. The rule gave power plants four years to comply with MATS, with an optional additional year to install mitigation technologies (EPA, 2018b). The MATS rule was a major driver of coal plant closures in 2015-16. In December 2018, the EPA proposed a revised Supplemental Cost Finding for the MATS rule, which would not change implementation of the existing rule, but would limit future regulatory action on hazardous air pollutants under Section 112 of the Clean Air Act (Utility Dive, 2018).

In 2011, the EPA also finalised the CSAPR, designed to control interstate air pollution of NOx and SO2. Often, pollution from coal-fired power plants can travel to other states, pushing them out of attainment with NAAQS (so-called “downwind” states). Under the Clean Air Act, the “good neighbour” provision requires the EPA to address this type of interstate pollution. CSAPR, which took effect in 2015, requires states with “upwind” emissions, mostly in the eastern part of the country, to limit NOx and SO2 pollution from their power plants to avoid emissions crossing over into other states (EPA, 2018c). Under the cap-and-trade rule, each obligated state is assigned a pollution cap and issued emissions allowances accordingly, which entities under the rule can trade among themselves to achieve compliance (EPA, 2018c).

Though not specific to pollutants, in 2014, the EPA finalised cooling water intake requirements under Section 316(b) of the Clean Air Act, which applies to power plants that draw at least 2 million gallons of cooling water daily from neighbouring lakes, rivers, estuaries or oceans to cool their facilities (Power Magazine, 2014; EPA, 2019e). The rules, which are enforced as part of National Pollutant Discharge Elimination System permits, provide several technology options to coal plants to limit impacts on fish populations.

In order to address GHG emissions from power plants, as required by the Massachusetts v. EPA Supreme Court ruling, in August 2018, the administration introduced its proposal to replace the 2015 Clean Power Plan with the ACE rule. Under Section 111(d) of the Clean Air Act, the EPA is required to regulate emissions at existing power plants through the “best system of emissions reduction” (BSER). The Clean Power Plan, which was suspended by a Supreme Court ruling and therefore never took effect, proposed statewide targets for power plant emissions that collectively added up to a 32% reduction from 2005 levels by 2030. Meeting the targets allowed for so-called “beyond the fence

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