CURWOOD: It’s been six months since the Obama administration put a moratorium on new coal leases on public lands. During the planned, three-year pause the Department of the Interior is reviewing its management of taxpayer-owned coal, including its impact on global warming. And earlier this month, Interior moved to close a major loophole that has left royalties paid to the government artificially low for decades. We called up Michael Greenstone, a former chief economist for the Obama White House to explain. Professor Greenstone now teaches at the University of Chicago. Welcome to Living on Earth.

GREENSTONE: Thank you.

CURWOOD: So, let’s go with the basics at first. How does public land get leased for coal extraction? What’s the process?

GREENSTONE: So there’s a three part process. The first is that the federal government puts up tracts of land that are eligible to be released, and then companies can bid an amount to have access to that land. That’s called the bonus bid, and then after that they pay a rental fee of $3 per year per acre, and then finally they pay a production royalty fee, which is supposed to be 12.5 percent of the value, whatever comes out of the land.

CURWOOD: What’s wrong with the present system in your view?

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