US Politics
Company bids less than a penny per ton in biggest US coal sale in over a decade
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A Navajo tribe-owned company bid $186,000 to lease 167 million tons of coal on federal lands in southeastern Montana on Monday in the biggest U.S. coal sale in more than a decade.
The offer from the Navajo Transitional Energy Co. (NTEC) equates to one-tenth of a penny per ton, underscoring coal’s diminished value even as President Donald Trump pushes to mine and burn more of the heavily polluting fuel.
Federal officials did not immediately say if they would accept the offer. It was the only bid received. Two NTEC representatives attended the sale at the Bureau of Land Management local office in Billings, Montana. They declined to comment after it was over.
At the last successful government lease sale in the region, a subsidiary of Peabody Energy paid $793 million, or $1.10 per ton, for 721 million tons of coal in Wyoming.
It’s uncertain how much demand there will be for the coal offered Monday next to NTEC’s Spring Creek mine near Decker, Montana. The five power plants using fuel from Spring Creek mine are scheduled to stop burning coal in the next decade, according to an analysis by The Associated Press.
The lease is in the Powder River Basin, the most productive coal fields in the nation. Officials under the Democratic administration of then-President Joe Biden banned sales from the region because of coal’s contribution to climate change but Republicans are attempting to reverse that decision.
NTEC argued in favor of a low market value for coal in the lease area, pointing to government studies that predict coal markets will decline significantly over the next two decades as fewer utilities buy the fuel.
The company bid $147 per acre for tracts of land totaling 1,262 acres (510 hectares). Another sale is planned Wednesday in central Wyoming, where the government is offering 440 million tons of coal next to NTEC’s Antelope Mine.
The sales are going forward despite the government shutdown because the Trump administration did not furlough workers responsible for reviewing fossil fuel projects.
Many coal plants have been retired over the past two decades as utilities favored power from natural gas and renewable sources such as wind and solar energy.
Selling new coal leases does not necessarily mean the tracts will be mined, said James Stock, a Harvard University economist and former member of the White House Council on Economic Advisers under President Barack Obama.
Despite Trump’s declaration of an energy “emergency” and his calls to expand mining and burning of coal, Stock said it’s unlikely any new coal plants will be built. That means much of the coal that’s being sold under Trump is unlikely to ever be mined, he said.
“I don’t expect these leases to have much real-world impact,” Stock said.
Spring Creek also ships coal overseas to customers in Asia. Increasing those shipments could help it offset lessening domestic demand, but a shortage of port capacity has hobbled prior industry aspirations to boost coal exports.
