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Powder River Basin not a ‘coal producing region’?

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Now, I’m certainly no expert on western coal or on the process the government uses to lease all of that publicly owned coal in Wyoming’s Powder River Basin to the handful of companies that operate huge surface mines there.

But this announcement by the group WildEarth Guardians sure caught my eye:

The U.S. Bureau of Land Management today announced that the largest coal producing region in the United States is not a coal production region.

Huh?

I thought the Powder River Basin was the largest coal-producing region in the U.S., churning out nearly half of the nation’s production. How could the government classify it as not being a coal production region? Why would they do that?

Well, thanks to Coal Tattoo reader Andy Wildenberg for calling this Associated Press story on the issue to my attention in his comment on last week’s Friday Roundup. A longer version of the AP story explains:

The U.S. Bureau of Land Management has denied a petition by environmental groups to change its process for selling access to the nation’s most productive coal deposits.

Since 1990, the government has allowed the coal industry to nominate deposits it wishes to mine in the Powder River Basin in northeast Wyoming and southeast Montana. Such deposits typically are located next to existing strip mines in the basin.

At auction, the leases seldom attract more than one bidder apiece — the company that already has been mining next to the leases.

In 2009, the groups WildEarth Guardians and the Sierra Club asked the BLM to change the policy so the BLM alone would decide which coal reserves to sell.

Such a change would help create more competition for the leases while improving oversight of coal’s contribution to climate change, the groups said.

Coal from the Powder River Basin is burned in more than 200 coal-fired power plants in more than 35 states. Map by WildEarth Guardians.

You can read a copy of the WildEarth Guardians petition to the BLM here, and the agency’s decision on that petition is here. In a press release, WildEarth Guardians explained:

The 1990 decision in essence declared the region no longer produced coal. Director Abbey’s decision today reaffirms this declaration.

“Decertification” has allowed the Bureau of Land Management—the Interior Department agency that oversees federal coal leasing—to avoid following standard leasing procedures, allowing coal companies, rather than the federal government, to design lease boundaries that preclude competition.

As I understand this — and anyone with more detailed knowledge, please jump in with comments — the Interior Department did away with standard bidding procedures about 20 years ago, at a time when Powder River Basin coal production was down, and there were few bidders on new leases. But production has obviously skyrocketed in the area since then. And the Interior Department seems to be saying — at least in response to this WildEarth Guardians’ petition — that it wants to maintain the current lease process because doing so benefits the industry:

It is logical and prudent for the least tracts to be adjacent to one or more existing mines. These are production maintenance tracts and, as such, are located so that existing operations can pass onto these tracts without leaving tracts un-leased and undeveloped in between the existing Federal coal lease and the proposed production maintenance tract that would require significant additional disturbance and cost to the mine independently. Production maintenance leasing can only work in a decertified coal production region.

In other words, the process used now allows companies like Peabody and Arch to more easily propose and obtain leases to expand their existing operations in the PRB — and that’s just fine with the government. What’s not clear, from a business standpoint, is how this encourages competition in the form of new companies that might want to get in on the action.

Jeremy Nichols, Climate and Energy Program Director for WildEarth Guardians, said:

Once again, the U.S. Interior Department and its agencies are running interference for the fossil fuel industry. Instead of living up to their promises to restore trust and accountability in the wake of the Gulf oil spill, Interior and the Bureau of Land Management are protecting coal companies at the expense of American taxpayers.

Interestingly, WildEarth Guardians also points out that this leasing process allows the Interior Department to avoid taking a hard look at the global warming impacts of all of that publicly owned coal that is mined in the Powder River Basin Nichols said:

The government is literally shortchanging the public at the expense of our climate. This is borderline corruption and sadly, it’s our environment and our communities that stand to suffer most.

Why doesn’t BLM look more closely at this issue? Here’s what the agency says:

Specific regulated levels have not yet been established for GHG emissions. In each NEPA analysis, the BLM discloses that given the state of the science, it is not yet possible to associate specific actions with the specific global impacts such as potential climate effects. Since tools necessary to quantify incremental climate changes associated with specific GHG emissions are presently unavailable, the analysis cannot reach conclusions as to the magnitude or significance of the emissions on climate.