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Obama Administration Halts New Coal Leases on Federal Lands

The Obama administration announced Friday that it will halt issuing new coal leases on federal lands — a blow to the coal industry.

The move stymies new coal production on federal lands as the administration weighs a programmatic overhaul. President Obama suggested that the administration might go in this direction during the State of the Union address this week.

"I'm going to push to change the way we manage our oil and coal resources so that they better reflect the costs they impose on taxpayers and our planet," Obama said.

The administration says it is examining whether fees charged to mining companies provide a fair return to American taxpayers and reflect coal's impact on the environment.

Related: Coal Loses Its Grip in West Virginia

"Given serious concerns raised about the federal coal program, we're taking the prudent step to hit pause on approving significant new leases so that decisions about those leases can benefit from the recommendations that come out of the review," Interior Secretary Sally Jewell said in a statement. "During this time, companies can continue production activities on the large reserves of recoverable coal they have under lease, and we'll make accommodations in the event of emergency circumstances to ensure this pause will have no material impact on the nation's ability to meet its power generation needs. We are undertaking this effort with full consideration of the importance of maintaining reliable and affordable energy for American families and businesses, as well other federal programs and policies."

Companies will continue to be able to mine coal reserves already under lease.

Roughly 40 percent of the coal produced in the United States comes from federal lands. The vast majority comes from Wyoming, Montana, Colorado, Utah and New Mexico.

Related: As Industry Crumbles, Some Try to Change the Conversation in Coal Country

The mining industry criticized the administration's motives.

"The idea that future coal leasing requires a pause to evaluate environmental impacts defies credulity," Hal Quinn, president of the National Mining Association said in a statement. "Every federal coal lease sale and subsequent mining project must pass multiple levels and sequences of both federal and state evaluation. It is stunning that the administration believes a process that already pushes the development of coal projects beyond a decade needs more red tape and delays."

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Environmentalists lauded the move as a step in the right direction.

"With this decision President Obama sent a clear signal to coal companies, and their investors, that the days of dumping their pollution onto the American public are ending," said Erich Pica, president of Friends of the Earth.