Quantcast
Environmental News for a Healthier Planet and Life

Help Support EcoWatch

Wyoming Coal Lease Sale Attracts Zero Bidders

Energy

Sierra Club

By Tom Valtin

Photo courtesy of Shutterstock

Yesterday, a Bureau of Land Management (BLM) lease sale in Cheyenne, WY, for 149 million tons of publicly-owned coal failed to attract a single bid. It was the first time that a federal coal tract offered for sale in Wyoming failed to attract any bidders—even the company that originally sought to mine the location determined that it couldn't do so profitably.

In June 2013, the Department of Interior's Inspector General released a report identifying numerous flaws in BLM's coal leasing program. Among them, the report confirmed that over the last 20 years 80 percent of Powder River Basin lease sales attracted only one bidder, and none attracted more than two.

Cloud Peak Energy, which applied for the Maysdorf II North Coal Tract lease in 2006 in order to expand its Cordero Rojo mine, said it had evaluated the coal tract in the Powder River Basin and decided not to submit a bid due to "current market conditions and the uncertain political and regulatory environment of coal and coal-fired electricity."

The Powder River Basin, which straddles the Wyoming-Montana border, is the largest coal mining region in the U.S. But with the domestic coal market in steep decline, the economics of extracting its coal are increasingly bleak. Cloud Peak Energy CEO Colin Marshall said that an economic analysis led the company to conclude that "a significant portion" of the coal up for bid was not economically recoverable. "We are unable to construct an economic bid for this tract at this time," he said. "We will continue to evaluate any possible future lease sales by the BLM of these tons in the North tract as market conditions improve."

But the assumption that market conditions for coal will improve is clearly questionable if not downright delusional. The failure of the lease sale to attract any bidders shows that the federal coal lease program is mired in outdated and inaccurate beliefs about coal's market value.

"It comes down to economics, plain and simple," said Aaron Isherwood, a managing attorney with the Sierra Club’s Environmental Law Program. "The market for coal is incredibly soft, so why would the government sell publicly-owned coal at a time when people are paying rock-bottom prices for it? Federally-owned coal is supposed to be sold at fair market value. Would you try to sell your house right after the housing market craters? The public is getting ripped off. The failure of this lease to attract a single bid is clear evidence that the federal coal-leasing system is badly in need of reform."

Nearly 5 billion tons of federal coal is currently being leased or sold in the Powder River Basin, even as the domestic market for the resource is tanking. As confirmed by the Department of Interior report, the way leases are managed by the BLM is short-changing American taxpayers to the tune of millions of dollars with each successive lease.

Coal market experts who spoke in Wyoming and Montana earlier this week called for a moratorium on new federal coal leases until the Department of Interior and BLM “get their act together," asserting that the federal leasing program has shortchanged taxpayers by $30 billion over the past three decades.

"The BLM can't give this stuff away," said Bruce Nilles, senior director of the Sierra Club's Beyond Coal campaign, in reaction to the failure of the Maysdorf II coal tract to attract any bidders. "This is the beginning of the end of coal—it's officially worthless. This is what happens when community after community replaces their aging coal plants with clean energy."

Visit EcoWatch’s COAL page for more related news on this topic.

——–

EcoWatch Daily Newsletter

Critics charge the legislation induces poor communities to sell off their water rights. Pexels

By Eoin Higgins

Over 300 groups on Monday urged Senate leadership to reject a bill currently under consideration that would incentivize communities to sell off their public water supplies to private companies for pennies on the dollar.

Read More Show Less
People enjoy outdoor dining along Pier Ave. in Hermosa Beach, California on July 8, 2020. Keith Birmingham / MediaNews Group / Pasadena Star-News via Getty Images

California is reversing its reopening plans amidst a surge in coronavirus cases and hospitalizations.

Read More Show Less
A protest against the name of the Washington Redskins in Minneapolis, Minnesota on Nov. 2, 2014. Fibonacci Blue / CC BY 2.0

The Washington Redskins will retire their controversial name and logo, the National Football League (NFL) team announced Monday.

Read More Show Less
The survival tools northern fish have used for millennia could be a disadvantage as environmental conditions warm and more fast-paced species move in. Istvan Banyai / Wikimedia Commons / CC by 3.0

By Alyssa Murdoch, Chrystal Mantyka-Pringle and Sapna Sharma

Summer has finally arrived in the northern reaches of Canada and Alaska, liberating hundreds of thousands of northern stream fish from their wintering habitats.

Read More Show Less
A mother walks her children through a fountain on a warm summer day on July 12, 2020 in Hoboken, New Jersey. Gary Hershorn / Getty Images

A heat wave that set in over the South and Southwest left much of the U.S. blanketed in record-breaking triple digit temperatures over the weekend. The widespread and intense heat wave will last for weeks, making the magnitude and duration of its heat impressive, according to The Washington Post.

Read More Show Less
If you get a call from a number you don't recognize, don't hit decline — it might be a contact tracer calling to let you know that someone you've been near has tested positive for the coronavirus. blackCAT / Getty Images

By Joni Sweet

If you get a call from a number you don't recognize, don't hit decline — it might be a contact tracer calling to let you know that someone you've been near has tested positive for the coronavirus.

Read More Show Less

Trending

Aerial view of burnt areas of the Amazon rainforest, near Porto Velho, Rondonia state, Brazil, on Aug. 24, 2019. CARLOS FABAL / AFP via Getty Images

NASA scientists say that warmer than average surface sea temperatures in the North Atlantic raise the concern for a more active hurricane season, as well as for wildfires in the Amazon thousands of miles away, according to Newsweek.

Read More Show Less