coal lease sales

Amid low prices and weak demand, Peabody Energy has withdrawn an application to lease additional coal on federal land in the Powder River Basin.

Companies nominate coal tracts for leasing and then are invited to bid on them at auction. Peabody expressed interest the Antelope Ridge tracts back in 2011. They contain an estimated one billion tons of coal.

The company withdrew its application last month. The move follows a recent drop-off in federal coal sales in Wyoming—there hasn’t been one since 2012. Arch Coal also pulled one of its applications earlier this year.

Aaron Schrank/WPR

The state agency responsible for building and maintaining Wyoming’s K-12 schools will face huge revenue shortfalls in the years ahead. That’s according to a report by University of Wyoming economists.

The vast majority of school construction funding comes from coal lease bonus payments—and those revenues are expected to dry up completely in 2017.

Stephanie Joyce

With backing from the co-founder of Microsoft, two environmental groups filed suit Tuesday over the federal government’s coal leasing program.

A new report by the Government Accountability Office says the Bureau of Land Management’s coal lease valuation program is ‘out of date.’ The report says BLM offices around the country are not consistent in the way they calculate fair market value, don't always document the rationale behind accepting low bids and do not use independent reviewers to ensure calculations are correct.

It also says the BLM does not properly consider the export potential of coal when calculating fair market value of coal leases.

The Bureau of Land Management received a single bid at today’s coal lease sale, and it has rejected the offer.  Kiewit Mining Properties bid 21cents/ton on the Buckskin Mine Hay Creek II tract. The tract has about 167 million tons of mineable coal and is adjacent to the Buckskin mine, which Kiewit operates.

However, the bid is the lowest the BLM has received since 2001.

BLM spokeswoman, Beverly Gorny, says ultimately the bid did not meet the BLM’s secret calculations of what’s considered fair market value.

The Bureau of Land Management’s coal lease sale today coal lease sale received one bid. The Buckskin Mine Hay Creek II tract is adjacent to the operating Buckskin Mine in Campbell County. The bid came from Buckskin Mine’s operator, Kiewit Mining Properties, and amounted to 21 cents/ton for the estimated 167 million tons of mineable coal in the tract. If accepted, the tract could extend the mine’s life by about eight years.

Today’s coal lease sale of nearly 150 million tons of mineable coal in the Powder River Basin received zero bids.

It’s the first time the Wyoming office of the Bureau of Land Management has received no bids for a sale. Cordero Mining, a subsidiary of Cloud Peak Energy, asked BLM to open the tract in 2006. It's adjacent to an operating Cloud Peak mine.

But Cloud Peak CEO Colin Marshall says things have changed since then. In a press release, he cited current coal market conditions and regulatory uncertainty as factors in the company's decision not to bid.

Two coal lease tracts in the Powder River Basin will go up for sale in the next several weeks at the request of two operators in the area.

Cordero Mining and Kiewit Mining Properties requested the sales using the “lease by application” system. Under that system companies with existing mines can request specific tracts, often adjacent to their operations. The system has been criticized for limiting competition.

University of Colorado Law School professor, Mark Squillace, says often, such coal lease sales only attract one bidder.