Economic analysis of maximum economic recovery of federal coal. [Criticism of proposed leasing regulation]
The proposed Federal coal management regulations (Federal Register Monday, March 19, 1979, par III pp. 16800-16845) require maximum economic recovery (MER) of Federal coal on all new Federal coal leases. An economic interpretation of the proposed MER rule is that on Federal leases all coal seams whose collective average private costs are equal to or less than price are required to be mined. The intent of the rule is to force more coal to be mined on a given lease, thereby delaying (a) the lateral extension of the land disturbance impacts from surface mining and (b) the beginning of mining in new regions. The main issue investigated in this report is whether this MER rule or some other MER rule is economically efficient. Analysis is undertaken for the currently proposed rule (MER option 3) and two other alternatives: Mine all seams that have marginal private costs less than or equal to price (MER option 1); and mine all seams that have marginal social costs less than or equal to price (MER option 2). The analysis provides estimates of extra administrative and mining costs to society and a qualitative description of the environmental benefits that could result from the alternative MER rules. The significant results of the empirical analysis are as follows: Extra administrative costs to the Federal Government and mining companies under MER options 2 and 3 (compared to MER option 1) are estimated to be $150,000 a year and $1.5 million per year, respectively; and under MER option 3 assuming Federal leasing commences during 1980, removal of privately uneconomic seams could be required on about 25% of the Federal coal to be stripped in the year 1985. This could increase mining costs by $113 million per year by 1985 in comparison with MER option 1.
- Research Organization:
- Geological Survey, Washington, DC (USA)
- OSTI ID:
- 6514797
- Report Number(s):
- USGS-OFR-79-1142
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
011000* -- Coal
Lignite
& Peat-- Reserves
Geology
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CARBONACEOUS MATERIALS
COAL
COAL DEPOSITS
ECONOMIC ANALYSIS
ECONOMICS
ENERGY SOURCES
FOSSIL FUELS
FUELS
GEOLOGIC DEPOSITS
LEASING
MANAGEMENT
MATERIALS
MINERAL RESOURCES
NORTH AMERICA
PUBLIC LANDS
RECOVERY
REGULATIONS
RESOURCES
USA