BLM ‘Auctions’ 720-Million-Ton North Porcupine Coal Tract To Single Bidder For $1.10 A Ton

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"BLM ‘Auctions’ 720-Million-Ton North Porcupine Coal Tract To Single Bidder For $1.10 A Ton"

By Brad Johnson, campaign manager of Forecast the Facts

The Obama administration’s Bureau of Land Management auctioned a major tract of Wyoming coal to Peabody Energy at a bargain-basement price of $1.10 per ton yesterday.

The North Porcupine coal tract in the Powder River Basin went to the single bidder, Peabody subsidiary BPU Western Resources, for $793,270,310.80 for 721 million tons, BLM representative Beverly Gorny stated in a telephone interview.

This sale, made under the provisions of the Mineral Leasing Act of 1920, represents a massive fossil-fuel subsidy based on the assumption that the use of coal benefits the American public. However, it is likely this coal is intended for the Asian market, where sub-bituminous coal fetches a much higher price. The non-competitive leasing program is under federal investigation.

Moreover, the costs of the carbon pollution from mining and burning this coal were not taken into consideration. The 721 million short tons of sub-bituminous coal in the lease sale will generate approximately 1.1 billion metric tons of carbon dioxide when burned. With a modest estimated social cost of carbon at $65 per ton of CO2, the global-warming impacts to society of this lease sale exceed $70 billion — 90 times the price paid for the lease. More than 27,000 people signed a Credo Action petition opposing the fire sale of Wyoming’s sub-prime carbon reserves.

The lease sale still has to be approved by the BLM post-sale panel, which recently rejected a low-ball bid for an adjoining tract.

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6 Responses to BLM ‘Auctions’ 720-Million-Ton North Porcupine Coal Tract To Single Bidder For $1.10 A Ton

  1. Dan Calistrate says:

    Shouldn’t the emissions of CO2 be about twice as big as quoted? Am i missing something basic here?
    1 Kg of carbon emits 3.67 Kg of CO2 by burning.
    Even if the coal is very low grade (75% carbon by weight) the factor should still be 2.75x. This translates into 2 billion tons of CO2 roughly, not 1.1 billion as quoted.

  2. Paul Chernick says:

    Since PRB coal is selling for about $10/T, selling the resource at $1.1/T doesn’t sound like bargain basement price. Ignoring the emissions is bad policy, but may be required by the archaic laws governing mineral sales.

    Is there PRB on private land? If the BLM insisted on a price of even $5/T, would Peabody just develop other PRB resources? Or does BLM have a monopoly?

  3. Mulga Mumblebrain says:

    It is quite remarkable, don’t you agree, that when a capitalist society reaches a certain point, where the Right dominate all aspects of business, the MSM, politics and government, that kleptomania, larceny, pleonexia and general moral turpitude become endemic. To survive into the future we merely need to change almost every aspect of the system of state and private power, rehabilitate those amongst the ruling castes capable of moral regeneration and remove those not so inclined. It should be easy.

    • Patricia McCauley says:

      I agree. “It should be easy.” Too bad it won’t be. By the time we even begin to rehabilitate those we can and remove those we can’t, we’ll all be walking around like Michael Jackson and the Chinese with masks on. So sad.