EDITORIAL: Don’t Shut Down Coal Leases

(Casper Star Tribune, February 18) – Coal is important in Wyoming. Wyoming coal is important to the nation. It’s worth getting right how the federal government sells taxpayer coal to companies to mine.

So that’s why it’s important to learn from the recent federal review of the coal tract leasing process. The report sounded some serious alarms about how the federal government sells coal tracts to private companies to mine coal for sale.

In response, Massachusetts Sen. Ed Markey, a Democrat, called for the federal leasing program to be put on hold. That’s the wrong thing to do. But it’s worth reviewing the process and adjusting it to make sure taxpayers get their fair cut.

The Government Accountability Office’s investigation into the program identified numerous problems with how the government auctions off taxpayers’ coal. The investigation found that the Bureau of Land Management – which manages much of federal resources in the West, including Wyoming – unevenly valued coal across various state offices. It also didn’t properly calculate the export value of coal.

There was a bright spot in the GAO’s review: The investigation actually found that the state office in Wyoming – source of 85 percent of federal coal production – generally did well valuing and bidding out the coal tracts it oversees. The GAO did find the Wyoming office improperly valued two coal leases, sold in 2011 and 2012.

Yet Markey thinks the coal leasing program should halt pending changes. We think that’s unnecessary. Coal leases take long enough to process as it is. Additionally, coal miners and power producers count on certainty to establish contracts and reliable sources of coal for power plants. There’s no reason to disrupt the coal leasing process while it’s tweaked.

The GAO report did troll up some red herrings ready for the environmental communities and others to snap up. One such red herring: coal leases that only get one bidder. Most coal tracts in Wyoming are extensions onto existing mines. They’re seldom adjacent to other mines, so they seldom get other bidders. That’s not cozy deal-making. That’s just realistic.

And if we’re going to properly price the export value of coal, let’s look at prying open coal ports on the West Coast. We hope if Markey wants coal export values properly priced, he’ll support coal exports, as well. As the U.S. shifts away to other sources of energy, including natural gas, it’s important to shift sales of Wyoming and U.S. coal to overseas markets. Sales now are only in the dozens of tons. If coal ports open up, coal from the Powder River Basin in Wyoming and Montana can get sold in quantity to customers in Asia.

Wyoming coal is inexpensive to mine, mined safely and is relatively good for the environment. We should be proud to sell it elsewhere. Let’s make sure taxpayers are getting their fair share, and keep the coal trains rolling.

Full story here.