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Carbon Catastrophe: Obama Administration To Sell 316 Million Tons Of Coal

By Jessica Goad, Guest Contributor  

"Carbon Catastrophe: Obama Administration To Sell 316 Million Tons Of Coal"

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Black Thunder Mine in the Powder River Basin

Black Thunder Mine in the Powder River Basin

CREDIT: High Country News

Today the Obama administration’s Bureau of Land Management will hold the first of two major coal lease sales over the next month from public lands in Wyoming’s Powder River Basin. Combined, they will allow the extraction of almost 316 million tons of taxpayer-owned coal that, when burned, will result in significant carbon pollution. The second sale is scheduled for September 18.

Burning this coal will release 523,524,951 tons of carbon dioxide into the air, according to a Climate Progress analysis using BLM’s environmental analyses and the Environmental Protection Agency’s Greenhouse Gas Equivalencies Calculator. This is equivalent to the emissions from nearly 109 million passenger vehicles every year. For comparison, there are approximately 253 million vehicles in the U.S.

The first of three tenets in President Barack Obama’s Climate Action Plan announced in June is “cutting carbon pollution in America.” Paul Bledsoe, a former Interior Department official during the Clinton administration, highlighted the disconnect between the administration’s dual pushes for coal leasing and cutting carbon pollution in December 2011:

On some level, the twin goals of increased fossil fuel production and reducing U.S. greenhouse gas emissions are necessarily in conflict, at least without a national cap on emissions. This fundamental contradiction in current U.S. energy policy is playing out on the Keystone oil pipeline, in our public lands policy and throughout the energy economy.

As Grist’s David Roberts succinctly puts it, “digging up and burning that Powder River Basin coal will put enough carbon in the atmosphere to undo all of Obama’s other climate work.”

Approximately 42 percent of the nation’s coal comes from public lands. But while the use of coal in the U.S. appears to be declining because of natural gas and stronger public health regulations, coal companies are looking internationally to export American coal to quickly-growing economies. Although six coal export terminals in the Pacific Northwest have recently been proposed, only three are still on the table. Additionally, the twelve proposed coal export terminals in the Gulf region made news yesterday when the Port of Corpus Christi announced it was scrapping terminal plans.

But the continued leasing of coal doesn’t just raise questions about its impact on the climate and environment; it also highlights the fact that taxpayers may very well be getting a raw deal for the sale of this coal.

For example, a report by the Interior Department’s own Inspector General found that taxpayers have lost at least $62 million from undervalued coal, and that only a one cent per ton undervaluation can potentially cause a $3 million revenue loss. Additionally, a report last summer by the Institute for Energy Economics and Financial Analysis alleges that taxpayers have lost $30 billion over 30 years because of the Bureau of Land Management’s inability to get fair market value for coal. And a recent Reuters investigation revealed that coal companies may be dodging higher royalty payments by valuing coal at low domestic rates and then selling it higher overseas.

While the lease sales today and next month are technically considered “competitive,” it remains to be seen whether there will be more than one company bidding on each one, considering the fact that, as WyoFile’s Dustin Bleffizer writes, “competitive lease sales of federal coal tracts in the Powder River Basin often attract just one bidder,” and “usually it’s the party that nominated the tract for lease in the first place.”

Update

The Casper Star-Tribune reports that there were no bids on the coal put up for auction by the BLM today. The company that had proposed the area be leased, Cloud Peak Energy, put out the following statement:

…in light of current market conditions and the uncertainty caused by the current political and regulatory environment towards coal and coal-powered generation and ultimately decided it was prudent not to bid at this time … We will continue to evaluate any possible future lease sales by the BLM of these tons in the North tract as market conditions improve.

Cloud Peak Energy is the fourth-largest coal company in the U.S. and according to the New York Times is “negotiating deals for roughly 21 million tons of export capacity with the builders of two proposed Washington State terminals.”

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