The United States has more coal than any other nation on earth, with the federal government owning about one-third of all U.S. coal reserves. Due to such a significant amount of public ownership, particularly in western states, standard ways of economic thinking often do not apply in the case of federal coal.In The Use and Management of Federal Coal, Robert H. Nelson tells the important but largely untold story of the U.S. coal program and its place in the country’s larger energy system. In the process, Nelson reviews the traditional economic methods that have gone into the calculation of fair market value and other important influences on the amount of coal leased by the federal government. He concludes that the current circumstances surrounding federal coal require new economic understandings that have thus far eluded policymakers and many policy analysts.A particular problem is the effective monopoly of federal coal ownership in the Powder River Basin of Wyoming—a fact that persists while policymakers and other analysts have applied standard methods of analysis suitable for more conventional market settings. Nelson concludes that for federal coal, demand-side actions to reduce coal consumption are much preferred to emerging supply-side efforts to “keep it in the ground.”This PERC study makes an important contribution by providing historical background and an up-to-date economic discussion of the federal coal program based on Nelson’s nearly 40 years of experience in federal coal policy. Nelson’s analysis will be of interest to anyone interested in the past or future of coal in the United States.Robert H. Nelson was a member of the Economics Staff of the Office of Policy Analysis in the Office of the Secretary of the Interior from 1975 to 1993. While at the Interior Department, he participated in the review and design of the federal coal program from 1978 to 1984. In 1983 and 1984, he was also the senior economist of the congressionally established Commission on Fair Market Policy for Federal Coal Leasing (the Linowes Commission). He is the author of The Making of Federal Coal Policy (Duke University Press, 1983) and Public Lands and Private Rights: The Failure of Scientific Management (Rowman & Little eld, 1995). Since 1993, he has been a professor in the School of Public Policy of the University of Maryland.