CHEYENNE — Nearly 758 million tons of Wyoming coal will go up for sale in the coming months, Interior Secretary Ken Salazar said Tuesday.
Flanked by Gov. Matt Mead at Cheyenne South High School, Salazar said coal will continue to be a mainstay of U.S. energy consumption and an important contributor toward U.S. energy indepedence. Wyoming’s low-sulfur coal is a key part of that mix, he said.
“Coal is a critical component of America’s comprehensive energy portfolio as well as Wyoming’s economy,” Salazar said.
Mead joined Salazar for what Mead called a “great announcement.”
“Energy absolutely is critical to this state and absolutely critical to our country,” Mead said. “Particularly in these times when we’re coming out of what is called the Great Recession, we need energy, we need the jobs that come from energy, we need electricity.”
The Interior Department’s Bureau of Land Management, which manages the federal coal leases, will hold four competitive lease sales of coal land in the Powder River Basin in coming months. The areas are next to existing coal mines and will likely be purchased by the companies that own those mines to expand their operations.
The lease sales are the first of more than a dozen the BLM expects to hold for the Power River Basin over the next three years, according to a statement released by the Interior Department.
The 758 million tons of coal opened by the lease sales will provide the Wyoming coal industry with more than 1½ years of additional production at current production levels.
The sale of the leases announced Tuesday could produce up to $21.3 billion when factoring in bonus bids and royalty payments, Salazar said. Just more than half of the total would go to the federal government, with the state getting the rest.
The coal industry in Wyoming has frequently complained about the lack of a reliable time frame for permitting more coal mining. But Marion Loomis, executive director of the Wyoming Mining Association, said Salazar’s trip to Wyoming to make the announcement could indicate a step in the right direction.
“Hopefully this is a recognition that the administration agrees that we need to keep a viable coal industry in this country,” he said.
Environmental and landowner groups have frequently opposed additional coal leases both in the permitting process and in the courts, concerned both about the effects of expanded mining and the pollution caused by the mining, transportation and burning of coal.
Shortly after Salazar’s announcement, three environmental groups — WildEarth Guardians, Sierra Club and Defenders of Wildlife — issued a joint statement firing back at the opening of additional coal lands.
“Secretary Salazar’s announcement that coal production will be expanded in the Powder River Basin is a giant leap backward,” Adam Kron, attorney for Defenders of Wildlife, said in the statement. “How can our country move toward a clean energy future if we’re doubling down on the dirtiest and most problematic energy source out there?”
WildEarth Guardians is already suing over one of the coal leases set to be opened for sale in May, and is considering legal action against the additional leases.
The low-sulfur coal from the Powder River Basin provides 40 percent of the coal used in coal-fired power plants in the U.S. Last year the 13 mines in the basin produced 428 million tons of coal, acccording to the Labor Department’s Mine Safety and Health Administration.
Salazar said the BLM will take a key final step toward opening up leases for another four tracts “in coming months.” Those tracts — South and North Porcupine, North and West Highlight — are next to mines in the south Power River Basin near Wright.
Those leases will cover 13,966 acres estimated to contain 1.6 billion tons of mineable coal.
While power companies are increasingly switching to natural gas-fired plants, the U.S. relies on coal-fired plants for nearly half of the electricity supply.
The Energy Department’s Energy Information Administration expects U.S. coal demand to drop slowly but remain strong into the future as natural gas and renewable sources of energy slowly replace coal in the nation’s electrical generation mix.
Yet the coal industry is seeking new markets and innovative uses for Powder River Basin coal.
Several of the firms involved in the basin are shipping coal across the Pacific Ocean to emerging, energy-hungry economies in Asia including China and India.
More export facilities in Washington state have been proposed but face significant opposition from neighbors and environmental groups.
Wyoming, with support from the federal government, has pushed for new ways to use the state’s coal. With energy companies, the University of Wyoming is researching a host of coal-related innovations, including gasification and underground storage of carbon produced when coal is burned.
Mead has also spoken in support of a coal-to-liquids plant under construction near Medicine Bow by DKRW Advanced Fuels of Houston. When completed, the plant will produce gasoline and other fuels from coal.