OREANDA-NEWS. US coal production on federal and Indian lands comprises more than 40pc of total US coal output, and production on those lands corresponds with the wider market decline, according to the US Energy Information Administration (EIA).

Total US coal production in 2014 fell to 997mn short tons (904mn metric tonnes) from 1.072bn st in 2003, a 7pc decline. Coal output on federal and Indian lands dropped by 8pc in that period to 421mn st in 2014, comprising 42pc of total US production.

Coal sales from production on federal lands increased by 0.2pc from 2013 to 402mn st in 2014. Coal sold from Indian lands in 2014 was flat with the prior year at 19mn st.

Production of coal on federal and Indian lands is dominated by Wyoming, which accounted for 80pc of the total in 2014. Montana, Colorado, Utah and New Mexico were the next biggest coal producers on federal and Indian lands.

The leasing of federal and Indian coal to US coal producers has become a target of environmental groups seeking to limit coal output.

Lawmakers and environmental groups had accused coal companies of selling coal to affiliates at lower prices and paying royalties on those sales, and then turning around and reselling the coal at higher prices. The US Department of the Interior responded by revising its royalty valuation method. It has planned four public meetings in July and August to discuss the changes with the public. The proposal released on 19 December 2014 would assess royalties on the value of the final sale.

The National Mining Association has criticized the proposed rule, saying it would only "result in burdens and regulatory uncertainty outweighing the purported benefits."

Interior's Bureau of Land Management (BLM), which oversees the leasing of new reserves, and Interior's Office of Surface Mining (OSM), which governs expansion projects for existing reserves, are also under environmentalists' attack for the agencies' lack of consideration of indirect climate change effects from coal mining and expansion permits.

A US District Court judge has twice sided with environmental groups in ruling that OSM violated the National Environmental Protection Act (NEPA) when it failed to consider climate change in its review of federal coal lease applications. OSM says that considering climate change would be too speculative.

Environmental groups are expected to use those decisions to challenge BLM's new plan to lease more than 10bn st of coal in Wyoming and nearly 70bn st in Montana.