BLM to Hold First of Several Lease Sales of Wyo. PRB Coal Tracts
Interior Secretary Ken Salazar on Tuesday said the Bureau of Land Management (BLM) would hold four competitive lease sales from May through August for Powder River Basin coal tracts in Wyoming. The tracts, covering 7,441.25 acres, hold an estimated 758 million tons of low-sulfur coal.
Total bonus bids and royalty payments over the life of these leases are estimated to generate $13.4 billion to $21.3 billion, 48% of which would go to the State of Wyoming, the BLM said in a statement. The federal share of bonus bids and royalty payments from these leases, 52%, would go to the U.S. Treasury.
The four sales, responding to Lease by Application (LBA) filings from companies to continue efficient operations and production from existing Powder River Basin coal mines, will be held in Cheyenne in a sealed bid process. These LBA sales are the first of more than a dozen that the BLM expects to hold for Powder River Basin coal tracts over the next three years.
In addition, in coming months the bureau expects to announce the availability of records of decision for the South Porcupine, North Porcupine, North Hilight, and West Hilight coal sale tracts in the Wyoming portion of the Powder River Basin. Combined, these tracts cover 13,965.75 acres containing an estimated 1.6 billion tons of mineable coal.
The Powder River Basin is the largest regional producer of coal in the United States. In the Wyoming portion of the basin, there are 13 active coal mines that produced about 428 million tons in 2010, while production from all coal mines in the state totaled 442.5 million tons last year, according to the U.S. Department of Labor’s Mine Safety and Health Administration. Total coal production in the United States in 2009 was about 1.1 billion tons.
The basin’s coal contains 15 times less sulfur than eastern coal, so it burns relatively cleaner. That has made it a top choice to use in coal-burning power plants, which generate about half of the nation’s electricity. Wyoming’s cleaner-burning, low-sulfur coal provides nearly 40% of the coal used in these plants.
According to the Department of the Interior, in fiscal year 2010, federal coal royalties in the basin generated $598 million, which was shared with the State of Wyoming. The state’s coal industry employs about 7,000 workers, each of which supports three related jobs in the private sector.
"Coal is a critical component of America’s comprehensive energy portfolio as well as Wyoming’s economy,” Secretary Salazar said on Tuesday, making his announcement with Wyoming Governor Matt Mead. “As the number one coal producer from public lands, Wyoming provided nearly 40 percent of the domestic coal used to generate electricity last year and it’s important that we continue to encourage safe production of this important resource.”
The anticipated sale dates of the four tracts announced on Tuesday are:
- May 11:West Antelope II North Coal Tract, a 2,837.63-acre area containing an estimated 350 million tons of mineable coal; offered in response to a LBA filed by Antelope Coal LLC.
- June 15: West Antelope II South Coal Tract, a 1,908.6-acre area containing an estimated 56 million tons; offered in response to an LBA filed by Antelope Coal LLC.
- July 13: Belle Ayr North Coal Tract, a 1,671.03-acre area containing an estimated 222 million tons; offered in response to an LBA filed by Alpha Coal West.
- August 17: Caballo West Coal Tract, a 1,023.99-acre area containing an estimated 130 million tons; offered in response to an LBA filed by Caballo Coal Co.
Sources: DOI, POWERnews