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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.

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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.