The Bureau of Land Management is having a hard time getting rid of our publicly owned coal. For the second time in two months, a federal coal lease auction resulted in no sales.
On Wednesday, the BLM announced that it was officially rejecting the lone bid on the Hay Creek II coal lease tract in Wyoming. The lone bidder, Kiewit Mining Properties, had offered a measly $0.21-per-ton of the estimated 167 million tons of mineable coal in the Hay Creek II tract. The BLM declared that the bid “did not meet fair market value” and rejected it.
Hey, at least we can’t accuse the BLM of literally giving away coal on public lands.
This failure to secure a suitable bid comes on the heels of last month’s stunning news that there were absolutely no bids for the auction of the Maysdorf II tract, also in the Powder River Basin in Wyoming.
If these two failed auctions represent a larger trend, it is that the market for coal has gotten so bad that even the BLM’s bargain bin prices are too high for industry to pay. And, yes, the BLM’s prices are cheap, as they’ve leased over 2 billion tons of coal in the Powder River Basin alone since 2011 at an average of around $1-per-ton.
That price point was criticized in a recent report by the Interior Department’s own Inspector General, which accused the BLM of failing to factor international markets and coal exports into their “fair market values,” and which calculated that for every cent that publicly-owned coal deposits are undervalued, American taxpayers get stiffed by $3 million.