Summary: GAO completed a study of coal leasing to identify problems and opportunities associated with federal coal leasing and with Department of the Interior (DOI) leasing policy for federal lands. DOI has decided to base its leasing policy on the number and value of bids received instead of on advance planning, timing, or estimates of the quantity of coal to be produced. There are now 190 lease applications pending, which are essentially prospecting permits allowing development of any coal discovered in commercial quantities. DOI's current leasing program is superior to its previous system, but mapping, drilling, and land management planning weaknesses can jeopardize the success of the entire operation. DOI has published proposed development and operations regulations, but GAO believes these fall short of present needs. DOI proposes the designation of logical mining units, federal and non-federal lands for coal development, but this neglects certain conservation objectives. Existing indefinite-term coal leases can be adjusted only at 20-year intervals, which prevents flexibility in the rapidly changing situations typical of national energy matters.
