The Trump administration indefinitely halted plans for a major coal lease auction this week on about 3,508 acres of Wyoming’s federal land after a similar sale in Montana failed to meet expectations.
The U.S. Bureau of Land Management (BLM) planned to auction off access of up to 365 million tons of coal across Campbell and Converse counties. The BLM wrote in a planning document it expects the “recoverable/ minable” amount of coal to be around 365 million tons.
That sale would have been the first major Wyoming coal lease sale in a decade. Lands involved in that sale were located in the Powder River Basin, about 15 miles south of Wright.
Navajo Transitional Energy was the only bidder that made an offer in Monday’s sale of 1,262 acres in Montana’s Powder River Basin. That land contained an estimated 167.5 million tons of coal.
The company offered $186,000, which did not meet BLM standards.
Bumps in The Road
Travis Deti, executive director of the Wyoming Mining Association, told Cowboy State Daily that the setback is a minor one for Wyoming, given the future of coal energy in the state.
Regulatory shifts by the Trump administration have substantially altered the landscape around Wyoming’s coal use recently, he said. Deti cited a recent Department of Energy study which showed energy demand in the United States will increase by 50% by 2040, which he said indicates the future is bright.
“We haven’t had a coal lease sale for a long, long time,” he said via phone conversation. “The last one was 12 years ago and we’re not operating in the same environment that we were 15, 20 years ago. The market has significantly changed.”
Deti suspected the ongoing federal government shutdown could also be playing a factor in the Trump administration’s decision. He acknowledged that the coal industry is going through a “learning curve” as it continues to feel out the Trump administration’s attitude on coal.
“There’s a lot of unknowns out there but from our side of things, from the association side of things, there’s probably going to be a little bit of a learning curve before we get to where we need to be with coal lease sales,” he said. “The environment is certainly good for it right now.”
Despite its impact on Wyoming’s plans, Deti said the failed Montana sale will not have an impact on the Cowboy State.
“I don’t think it’s something to be viewed as bad,” he said. “I just think things are moving really fast with the new administration and there are going to be some bumps on the road and there’s going to be a learning curve.”
Deti said he is planning to take a “wait and see” approach toward the future of coal leasing in the state. He estimated it could take anywhere from three to six weeks for the project to find the “sweet spot” in the price of coal while industry leaders work to recover institutional knowledge lost since the last lease.
“Again, we haven’t done this in a long time,” he said of coal leases. “The last lease we did I think it came out to a $1.10 a ton. And this (Montana) one, I think it was less than a penny. That’s a pretty big variation.”
“The market right now is strong, and the demand is strong,” he said. “I think we’re positioned pretty well, but the immediate hurdle we have to overcome is we have to start leasing more coal.”
Lingering Concerns
Donna Birkholz, executive director of the Powder River Basin Resource Council, told Cowboy State Daily the administration’s decision proves her belief that there was not a market for coal leasing in Wyoming, after all.
"We did not believe there was a market for the Antelope III lease,” she wrote via email. “The fact that the sale was suspended, in addition to this afternoon's announcement that the BLM has rejected the one low bid they received for their lease offer in Montana, leads us to believe we are correct."
Birkholz added that though the Trump administration may proceed with its plans, she is doubtful the lease will prove fruitful.
"I would not be surprised if the lease process is resumed, but the market is going to have a final say on whether it would be successful,” she wrote.
Future sales bear close watch, Birkholz said. The coming bids for Wyoming’s coal will directly impact important community programs, she wrote.
"Wyoming folks should pay close attention to the bids that are coming in,” she wrote. "These leases help fund services like our education system, and we need to consider whether we are being adequately reimbursed."
Jackson Walker can be reached at walker@cowboystatedaily.com.
