Cloud Peak seeks 198M ton coal lease in Montana

Published on NewsOK Modified: June 17, 2013 at 5:07 pm •  Published: June 17, 2013
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BILLINGS, Mont. (AP) — Federal and state officials will weigh in this week on a Wyoming company's application to lease 198 million tons of coal adjacent to a southeastern Montana mine, amid an emerging debate over whether the government is undervaluing the coal from such projects.

Cloud Peak Energy is seeking to expand its lease at the Spring Creek Mine near Decker by more than 1,600 acres.

Wednesday's initial decision on the application will come on the heels of a U.S. Department of Interior Inspector General's report that said the agency may be losing tens of millions of dollars by undervaluing coal from public lands.

As a result of the report, the Bureau of Land Management agreed to make changes to its leasing program, although agency officials disputed the scale of losses claimed by inspector general investigators.

Another report on the federal coal leasing program is pending from the U.S. Government Accountability Office, the investigative arm of Congress.

BLM regional coal coordinator Greg Fesko acknowledged the leasing program is under added scrutiny.

"We're right in the bull's-eye now," Fesko said.

Representatives of Cloud Peak declined comment.

Environmentalists who want a moratorium on new leases called for Wednesday's decision to be postponed until outstanding questions about the program are addressed. They highlighted the millions of tons of coal annually that Cloud Peak sells overseas — fuel that can be sold at higher prices than on the domestic market but also entails higher shipping costs.

The push to derail the lease is part of a concerted effort by coal's detractors to put the brakes on an industry considered one of the primary contributors to global warming, due to greenhouse gas emissions from coal-burning power plants.

Mining industry representatives counter that its critics ignore billions of dollars in government revenues and thousands of coal mining jobs in the Powder River Basin. That's an area of southeast Montana and northeast Wyoming that accounts for the bulk of U.S. coal production.

Seven other lease applications in the basin are pending before the Bureau of Land Management. The leases combined involve more than 4 billion tons of coal, with the earliest dating to 2005.