Government and the Coal Companies

US federal regulations stipulate that the Bureau of Land Management, a federal agency, must auction off coal tracts in a competitive bidding process, a Government Accountability Office (GAO) report found that this process wasn’t being followed.

For about 90 percent of the 107 leased tracts of land looked at by the GAO, only one company had bid on the land – typically the same company that submitted the application. Arch Coal and Peabody Energy as the principle recipients of BLM leases.

The inspector-general “identifies at least three weaknesses in the BLM program,” he wrote, “no independent verification of engineering and geological data, no revenue estimates for projected export sales and a failure to use comparable sales data when setting bid prices.”

Tom Sanzillo, the director of finance for the Institute of Energy Economics and Financial Analysis (IEEFA), a think tank, told IPS, “They’re giving away federal access at a price that is far below what they should be giving it away for,” said Sanzillo. “Therefore the federal government, and particularly the states of Wyoming and Montana, are being short changed.”

In addition to the loss of revenue, coal-mining operations raised some serious concerns among local and national environmental advocacy groups.

Kelly Mitchell, a climate and energy campaigner with Greenpeace, an environmental advocacy group, told IPS, “There are about five billion tonnes of federal coal somewhere in the leasing pipeline right now. If all that coal is leased, it would unlock more than 8.3 billion metric tonnes of carbon-dioxide, or the annual emissions of more than 1.7 billion cars.”

Wyoming produces 40 percent of all coal mined in the U.S. and the federal government owns 85 percent of the state’s coal. This makes Wyoming one of the most popular states for the energy industry to lease public land. The Powder River Basin is one of the most significant contributors to carbon emissions in the U.S. Thirteen percent of U.S. carbon emissions are sourced from the Powder River Basin.