APNewsBreak: Coal suspension affects 30-plus mining projects

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Posted: Jan 15, 2016 7:17 PM
APNewsBreak: Coal suspension affects 30-plus mining projects

BILLINGS, Mont. (AP) — At least 30 applications from companies seeking to mine hundreds of millions of tons of coal face suspension as the government reviews its sales of the fuel from public lands, U.S. officials disclosed Friday.

The coal leasing program is on hold for up to three years while the Interior Department reviews fees paid by mining companies and the environmental effect of burning coal, agency Secretary Sally Jewell said.

The Associated Press obtained a Bureau of Land Management list of affected sites ahead of its public release, and it includes mining proposals in nine states.

Some of the largest projects are in the Powder River Basin of Wyoming and Montana, the nation's top coal-producing region. Other projects are in Utah, Kentucky, Alabama, Arkansas, Colorado, Oklahoma and North Dakota.

The announcement marks another major blow to the struggling coal industry, which has been hit with increased competition from cheap natural gas, new anti-pollution regulations and faltering international coal markets that have dimmed hopes to boost exports. The nation's second largest coal company, Arch Coal of St. Louis, declared bankruptcy Monday.

Even before further leasing was suspended, work at many of the sites was unlikely to begin for years because of the time it takes companies to navigate the government coal program.

Mining already underway on public lands will be allowed to continue. As could 17 other lease applications, many of which had been approved or whose environmental studies were completed but still were being processed.

Mining representatives and elected officials from coal states decried the suspension.

"President Obama is wrong, and once again Montana's working families are bearing the brunt of his unilateral action," said Montana Gov. Steve Bullock, also a Democrat.

But the coal industry effectively has been under its own leasing moratorium in the Powder River Basin for the past few years. Several companies, including Alpha Natural Resources, which filed for bankruptcy protection last year, have asked the government to delay action on coal tracts previously nominated for leasing.

No federal coal reserves in Wyoming or Montana have been leased since 2012.

"This is just such a great time to take a pause in the federal coal program. There is so much uncertainty about the future of coal," said Shannon Anderson with Powder River Basin Resource Council, a conservation group made up of landowners.

The moratorium could stall a 441 million-ton expansion of Cloud Peak Energy's Antelope mine in central Wyoming, a 198-million-ton expansion of Cloud Peak's Spring Creek mine in Montana, and a 203-million-ton expansion of Lighthouse Resources' Decker mine in Montana.'

U.S. coal companies produced about 900 million tons of the fuel last year, the lowest volume in almost three decades, according to government estimates.

Cloud Peak Energy President Colin Marshall accused federal officials of pandering to environmentalists trying to shut down the industry.

"We believe this review process is not warranted and is aimed at delaying leases to ensure the coal is never mined, denying its economic benefits to the nation," Marshall said.

But Marshall added that the Gillette, Wyoming-based company does not expect an immediate effect to its operations and has a significant amount of coal reserves on non-federal lands, including on Montana's Crow Indian Reservation.

The U.S. sold billions of tons of coal over the past several decades, and Jewell said those reserves would be enough to sustain current production levels for about 20 years even with no new leases.

Roughly 40 percent of the coal produced in the country comes from federal lands, primarily in Wyoming, Montana, Colorado, Utah and New Mexico.

Wyoming has directed billions of dollars from the sale of federal coal leases to support state school construction in recent decades. But with the recent downturn in the industry, the state has been scrambling to identify new sources of revenue.

"If we aren't able to change those policies around, places like Gillette are going to look very much like the economies of Appalachia are looking right now," Republican state Rep. Tim Stubson said.

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Gruver reported from Cheyenne, Wyoming. Associated Press writer Ben Neary in Cheyenne contributed to this report.

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Follow Matthew Brown on Twitter at https://twitter.com/matthewbrownap .