Senator Markey calls on Secretary Jewell to suspend federal coal leases, as Peabody brags about exporting our coal

by Joe Smyth

February 5, 2014

An aerial view of North Antelope-Rochelle mine, part of the Black Thunder Mine in the Southern Powder River Basin. Black Thunder opened in 1977 and for many years was the largest single coal operation in the world. It is also the first coal mine in the world to transport one billion tons of coal. Having in 2004 been relegated to second-largest, after Peabody's North Antelope-Rochelle operation, also in the Powder River Basin, Black Thunder once again became the nation's leading coal-producer following Arch Coal's acquisition of the neighbouring North Rochelle mine from Triton Coal Co. In October 2009, Arch purchased Jacobs Ranch mine from Rio Tinto and merged it with its Black Thunder mine to become the world's largest coal mining complex. The combined operation supplies over 10% of the total US coal production. In 2004, Black Thunder became the first coal mine in the US to ship a cumulative 1,000Mst (907Mt) over its 27-year life to date. Since its opening, the mine has produced and delivered around 2.2 billion tons of coal.

© Greenpeace / Tim Aubry

Senator Ed Markeycalledfor a suspension of new federal coal lease sales this week, following the release of a Government Accountability Office (GAO)reportthat highlighted problems with the Department of Interiors coal leasing program. Markey detailed his concerns in aletterto Interior Secretary Sally Jewell witheight questionsabout the coal leasing program, including one focused on the BLMs failure to account for coal exports:

BLMs guidance states that appraisal reports determining Fair Market Value should consider specific markets for the coal being leased, including export potential. But the GAO found that some offices, such as Wyoming, typically contained only generic boilerplate statements about the possibility of coal exports in the future and the uncertainty surrounding them. Further, many other states did not consider coal exports at all when valuing federal coal, according to the GAO. What steps are you taking to protect taxpayers by ensuring that the BLM follows its guidance to conduct meaningful consideration of the possibility of coal exports in determining the Fair Market Value of public coal resources, given that coal leases are issued for a period of at least 20 years?

Answers from Secretary Jewellto Markeys questions are important, because so far it seems that determining how to handle the coal industrys export plans for taxpayer owned coal has been left to the whims of state BLM officials, without any meaningful oversight from the Department of Interior. And their efforts to explain the export of our coal show just how clueless the BLM is about the industrys plans.

Heres one attempt by a BLM spokesperson, to theAssociated Press: We recognize that its going to be burned;we just dont know where its going to be burned. If thats not very comforting, how about this answer from the BLMs chief of solid minerals branch in Wyoming, whotoldBloomberg BNA: Our position in BLM Wyoming is that the coal isnt being used for export.

That uncritical assumption helps explain how the BLM office in Wyoming could decide to let Peabody Energy expand its North Antelope Rochelle mine (thelargestin the United States) andjustifyit by asserting that the coal will help meet the national coal demand, claiming that the public interest would be served because doing so provides a reliable, continuous supply of stable and affordable energy for consumers throughout the country.

With these favorable assessments from their friends at BLM Wyoming, Peabody successfully expanded its North Antelope Rochelle mine in 2012 with two huge coal lease sales. One of those lease sales, the North Porcupine Tract, gave Peabody access to an additional 721 million tons of our coal, unlocking more than agigatonof carbon pollution, and cheating taxpayers out of an estimated $1.2 billion, according to ananalysisby the Institute for Energy Economics and Financial Analysis.

And having bought that coal to supposedly meet the national coal demand, Peabody CEO Gregory Boyce is nowbragging to the Wall Street Journalabout exporting it abroad:

Mines in Wyomings Powder River Basin offer a healthy future for the U.S. coal industry, Mr. Boyce says. We have the largest mine in the world there, and it has one of the lowest cost structures for a mine of its size, he says. The coal there travels to all corners of the world."

In other words, as Senator Markeyput it: Taxpayers are likely losing out so that coal companies can reap a windfall and export that coal overseas where it is burned, worsening climate change. This is a bad deal all around.

crossposted from Grist

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