Powder River Basin

“A win for all of Indian country”: US Denies Nation’s Largest Coal Export Terminal

Lummi oppose gateway pacific

This is a guest post by Nick Abraham of Oil Check Northwest, cross-posted with permission. 

In the far off Northwest corner of the country, a five-year treaty rights saga has finally come to a head. A $665 million project, called the Gateway Pacific Terminal, has divided Whatcom County and the state of Washington over its potential export; Powder River Basin coal. The developers of the project, Pacific International Terminals, SSA Marine and two coal companies Peabody Energy and Cloud Peak Energy have pushed development over the stead-fast opposition of a coalition of local tribes lead by the near by Lummi Nation. The Lummi have asked the US Government, represented by the Army Corps of Engineers, to protect their long standing treaty fishing rights and burial grounds, claiming both would be gravely effected by the project.

After months of deliberation, Col. John Buck, commander of the Army Corps' Seattle District, made a ruling on the treaty rights of the Lummi and their petition against the terminal. After reviewing thousands of pages of documents, the Corps denied the project's permit, finding that the terminal’s effect on Lummi fishing rights would exceed the threshold of damage that is allowed under the treaty.

Subsidized to the End: Not Even Corporate Welfare Can Save Big Coal

This year, two energy companies that have each received billions of dollars in subsidies and financial support from the federal government are going into bankruptcy. You might think, in this post-Solyndra political environment, that conservative commentators and politicians would be lining up at the Fox News studios to call for some heads to roll.

But, no. Even though these companies have benefited from enough federal subsidies to make the Solyndra loan look like pocket change, there's no outrage. Because they are coal companies (not solar), the story isn’t about how the federal government spent decades propping them up, it’s about how the president’s Clean Power Plan is taking them down.
 
For decades, however, coal companies have taken advantage of vast subsidies for extracting coal from public lands. The deals for mining this taxpayer-owned coal from American public lands were so good that some of the world’s biggest coal companies have relied on the cheap leases to survive as demand plummeted and the industry melted down.

A new report released last week by Greenpeace reveals just how big a part of Big Coal’s business federally subsidized coal has become. 

Arch Coal Nearly Doubled Its CEO Pay As It Lurched To Bankruptcy, Drawing SEC Attention

This is a guest post by Joe Smyth from Greenpeace, originally published at Medium.

Arch Coal, the second largest coal mining company in the US, filed for bankruptcy on Monday, raising questions about the company’s reclamation obligations for its massive strip mines, its plans to export coal from the Powder River Basin to Asia, the future of its existing and pending federal coal leases, and more. While Arch Coal sold mines, cut wages, and stopped paying dividends as its fortunes fell, one area it didn’t skimp was executive compensation.

In fact, while Arch Coal shareholders (or at least those who failed to divest from the company) have lost out, Arch CEO John Eaves somehow got a big raise as his company was failing — which seems to have earned the attention of the Securities and Exchange Commission (SEC).

BLM Hasn't Performed An Environmental Review of Coal Leasing Program Since 1979

It has been 35 years since the Bureau of Land Management (BLM) last performed an environmental review of its coal leasing program.

Two environmental groups are suing the BLM to force a review of the program.

Given advances in scientific knowledge of the risks posed by mining and burning coal to human health and Earth’s climate made since 1979, the groups argue that the review will “compel the Bureau of Land Management to deliver on its legal obligation to promote environmentally responsible management of public lands on behalf of the citizens of the United States.”

Friends of the Earth and the Western Organization of Resource Councils filed the lawsuit last week in the U.S. District Court for the District of Columbia, naming Secretary of the Interior Sally Jewell and BLM Director Neil Kornze as lead defendants, along with the Department of the Interior and the BLM.

GAO Hiding Crucial Documents From The Public While Calling for More Transparency in BLM Coal Leases

On Tuesday, the Government Accountability Office released a much-anticipated report about the Bureau of Land Management's coal leasing program, revealing it has stiffed taxpayers over $200 million.

The GAO blames a lack of competition in the bidding process, reliance on outdated and incomplete methods to determine “fair market value” of the coal reserves, a disregard of coal exports and their impact on fair valuation, and a blatant lack of transparency in the leasing program.  

Senator Edward Markey, who had requested the GAO investigation in 2012 while he still served in the House, responded immediately to the report's findings. The GAO didn't address specifics on how much public revenue might have been lost by mismanaged leases and auctions.

Senator Markey explained that based on an examination of the report and other coal leasing documents that were not made public, his staff figured that the the BLM could have earned at least $200 million more for the American public if managed properly. 

Unfortunately, the coal leasing documents investigated by Markey's staff aren't available to the public, which the GAO claims is because of the inclusion of private business information. According to Ned Griffith of the GAO, the information in the report was labeled “sensitive but unclassified” by the Interior Department.

In other words, even though one of the major findings of the GAO report was a troubling lack of transparency, the office itself is shielding from public view these detailed documents about coal leases on public lands. 

Government Accountability Office: Taxpayers Getting Stiffed by Flawed Federal Coal Lease System

The Department of the Interior is selling publicly-owned coal for much less than it is worth, essentially allowing the coal industry to fleece U.S. taxpayers of at least $200 million. 

That is one of the main takeaways from a much-anticipated report released today by the Government Accountability Office (GAO), which confirms that the coal leasing program is fundamentally flawed and deserves an overhaul. 

The GAO report, “BLM Could Enhance Appraisal Process, More Explicitly Consider Coal Exports, and Provide More Public Information,” finds that the coal leases employed by the Bureau of Land Management within the Department of the Interior lack competition, use outdated methods to determine “fair market value,” ignore the growing trend of coal exports, and deliberately keep information from the public. 

Senator Markey, who has been calling for an overhaul to the coal lease system since 1982, and who demanded this GAO review, responded to the report's release

These noncompetitive practices are costing taxpayers in Massachusetts and across the nation, benefitting just a few coal companies who may be leasing public coal resources at bargain basement prices,” said Senator Markey. “Taxpayers are likely losing out so that coal companies can reap a windfall and export that coal overseas where it is burned, worsening climate change. This is a bad deal all around.”

A vast majority of federal coal leases take place in the Powder River Basin of Montana and Wyoming. Coal companies like Peabody Energy, Arch Coal, and Cloud Peak Energy are all deeply dependent on this artificially cheap coal from federal leases. 

One of the report's most stunning revelations is that roughly 90-percent of the leases issued by Interior were “single bidder” auctions, won by the company that applied for the lease, and who didn't bid against anyone else. 

Of the 107 leased tracts, sales for 96 (about 90 percent) involved a single bidder, which was generally the company that submitted the lease application,” according to the report. 

Another key finding is that the BLM uses outdated and incomplete methods to determine “fair market value” of the land and the coal. This is of particular importance when there is only a single bidder, as the auction process demands that the winning bid achieve “fair market value.” According to staffers in Senator Markey's office, “for every cent per ton that coal companies decrease their bids for the largest coal leases, it could mean the loss of nearly $7 million for the American people.”

Port Metro Vancouver Hires Disgraced Edelman PR Firm, American Lobby Group to Push Coal Exports

Port Metro Vancouver

When it comes to shipping coal, it looks like the Vancouver Port Authority is taking a page out of the U.S. coal lobby's books. In an effort to combat negative public opinion about coal and the proposed expansion of coal exports through Fraser Surrey Docks, the port authority has hired public relations firm Edelman Vancouver to revamp its image.

Edelman is the largest public relations firm in B.C. and the company has a history of both pushing coal exports and disregarding public opinion. Until recently, the firm represented the pro-coal organization Northwest Alliance for Jobs and Exports, one of the largest groups in Washington state pushing for an increase in coal exports.

Edelman was fired by the Northwest Alliance after Lauri Hennessey, Edelman vice-president and spokesperson for the alliance, was recorded at an industry conference disparaging the people of the Pacific Northwest and calling the opposition “wacky” and “weird.” At the same conference, Hennessey acknowledged climate change in her address, but argued that the coal mined in the Powder River Basin in Montana and Wyoming — the source of the coal that would be shipped through Fraser Surrey Docks — wouldn’t have any adverse effects on the climate.

Edelman has now designed an ad campaign called Port Stories on behalf of Port Metro Vancouver. The ads have got it all: hardworking Canadians, poignant family moments and sweeping statements about how the port has shaped Vancouver as a city. There’s only one thing missing: any mention of coal.

BLM's Coal Leasing Woes Continue: New GAO Report Coming This Month

More bad news is coming for the Interior Department’s coal leasing program. This month (or later, if the federal shutdown persists), the U.S. Government Accountability Office is expected to release findings from a year-long investigation into the Bureau of Land Management’s federal coal leasing program, which oversees the auction of coal tracts on publicly owned lands.

You’re forgiven if this sounds familiar. In July, another federal body – Interior’s own Inspector General – condemned the program, releasing a highly critical report that documented a number of flaws in the BLM’s Coal Management Program.

While we’ll have to wait for the GAO’s report to get into the details, it’s safe to assume that it will include serious criticism of the program that seems to be failing on every level. The Inspector General analysis examined specific lease auctions – in one case finding that the taxpaying public was stiffed about $52 million because the BLM was ill-equipped to figure out (or uninterested in figuring) “fair market value” for the coal in a particular tract – but this GAO report will look at the program as a whole, which was plagued by scandal in the early 1980s. Reforms were mandated as a result of a GAO report at the time, but two decades later, many of the changes demanded have still yet to be implemented.

Why Are Coal Industry PR Pros Laughing About Climate Change in Private Talks on Export Terminals?

Ed. Note October 17: In response to misleading allegations from Edelman and the Alliance for Northwest Jobs & Exports, DeSmog has posted a follow-up demonstrating clearly that Mr. Stark's presence was known and that he had introduced himself to both Ms. Hennessey and Mr. Ferguson prior to the conversation.

This is a guest post by Mike Stark from FossilAgenda.

Last month, I attended Platt’s 36th Annual Coal Marketing Days. As a journalist predominantly focused on climate change and the coal industry for the past year, I was pleasantly surprised at how much ground was covered. At the same time, I was not surprised by the subdued mood that permeated this event.

If coal is your business, your best days are behind you, whether you're a mining executive or a PR flack. And the convention attendees were incapable of hiding their forlorn resignation. The gallows humor was contagious, even to someone who can be characterized as generally happy to see one of the world's dirtiest fuels in decline. 

But one flickering glimmer of hope was provided by Lauri Hennessey, a Vice President at Edelman, the world's largest public relations firm notorious for its corporate greenwashing campaigns.

Lauri Hennessey represents the Alliance for Northwest Jobs & Exports, a front group for coal mining and rail corporations that would profit from the export of Powder River Basin coal. Listen to her hallway conversation with some Arch Coal executives reflecting on the prospects of coal export terminal proposals in the Northwest: 


  

An End to Powder River Basin Coal Leases? Second Auction in Two Months Fails to Seal a Mining Deal

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.

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