The first sale of coal leases associated with the Trump administration’s push to revitalize the broader coal industry fell flat last week when the Bureau of Land Management received only one bid.
The offer was for less than one cent per ton of coal. The last accepted offer made in Montana’s Powder River Basin, one of the most productive coal deposits in the country, was for more than 100 times that amount.
Such a tepid response from private industry appeared to suggest that there is not the same market for coal that there was in generations past. In light of lower cost alternatives like natural gas and a push — although not universal — for renewable sources, energy companies have more options to consider.
This past Tuesday, the BLM turned down the offer.
“The BLM rejected the $186,481.59 bid submitted by Navajo Transitional Energy Company during the Spring Creek coal lease sale in Montana held on Oct. 6 because it didn’t meet the requirements of the Mineral Leasing Act,” wrote Alyse Sharpe, senior public affairs specialist, U.S. Department of the Interior, in an email.
“The bidder does have the opportunity to request the BLM to re-offer the lease for competitive sale and provide additional information on fair market value of the coal resources.”
It’s unclear what provisions of the Mineral Leasing Act were not met. The Navajo Transitional Energy Company did not immediately respond to a request for comment and the Deseret News has not been able to obtain a copy of the refusal letter.
The Spring Creek coal mine is seen in an aerial photograph, taken May 28, 2013, near Decker, Mont. | Larry Mayer, The Billings Gazette via the Associated Press
In advance of the sale, the company and some of its competitors attempted to set expectations with Wyoming’s BLM office regarding the broader coal market, WyoFile reported earlier last month.
They said that the coal was not worth what it once was, and that offers — if they came — would be for less than they had been, which was evident last week when the first large lease sale garnered such little attention from the energy industry.
The timing was awkward, as it was less than two weeks after the Trump administration announced opening up 13 million acres of land for coal mining, a number of financial incentives for energy companies, as well as a more than $600 million investment to support coal’s infrastructure.
“Interior Unleashes American Coal Power in Bold Move to Advance Trump Administration Priorities,” read the title of the announcement.
It summarized the initiative’s benefits as “expanded leasing, faster permitting, and royalty relief drive energy dominance (sic), job creation and U.S. strength.”
“Interior’s actions reflect the Trump administration’s all-of-the-above energy strategy, ensuring abundant, affordable energy while reducing reliance on foreign sources of coal and minerals,” the press release said.
As of this week, however, following the tepid lease sale, the BLM postponed all coal leases and there are not any currently scheduled coal lease sales across the country.
