The US Interior Department is set to launch a review of the federal coal leasing programme in a bid to assess potential reforms and ensure it provides a fair return to taxpayers.
The review will also assess whether the coal programme meets the energy and environmental goals.
New coal leases are expected to be paused during the review, which will be performed in the form of a programmatic environmental impact statement (PEIS).
The pause will not be applicable to existing coal production activities and will have limited exceptions, including for metallurgical coal, small lease modifications and emergency leasing.
Following the pause, companies can continue to mine the large amount of coal reserves already under lease.
United States Secretary of the Interior Sally Jewell also announced reforms to improve transparency of the programme, including a database of carbon emissions from fossil fuels that have been developed on federal land, in addition to facilitating capture of methane emissions from coal mines.
The review will examine concerns raised by the US Government Accountability Office, the Interior Department's inspector general, members of Congress and the public about the coal programme.
It will consider issues such as how, when, and where to lease.
Also considered will be issues such as how to account for the environmental and public health impacts of federal coal production, and how to ensure US taxpayers are receiving a fair return for the use of their public resources will also be considered.
Jewell said: "Even as our nation transitions to cleaner energy sources, building on smart policies and progress already underway, we know that coal will continue to be an important domestic energy source in the years ahead.
"We haven't undertaken a comprehensive review of the programme in more than 30 years, and we have an obligation to current and future generations to ensure the federal coal programme delivers a fair return to American taxpayers and takes into account its impacts on climate change."
Pending coal leases that have already completed an environmental analysis, and secured a final record of decision, can complete the final procedural steps to secure a lease or lease modification.
In response to Jewell's announcement Greenpeace executive director Annie Leonard said: "President Obama has taken a major step to move us away from coal and accelerate the transition to clean, renewable energy, and we applaud his leadership."
"The federal coal programme has undermined President Obama's efforts to address climate change by giving away our coal at subsidised rates, propping up this outdated energy source without regard for the damage done to communities or our climate."
Image: New coal leases would be paused during the review process. Photo: courtesy of dan/ FreeDigitalPhotos.net.