White House: No new coal leases on fed lands
January 22, 2016
Does Wyoming coal need an Ammon Bundy? Could be.
After the Obama Administration's latest sortie in a series of anti-coal initiatives, the Cowboy State's coal industry is at least badly in need of a friend.
Wyoming is the top coal producing state in the nation, and mining companies were poised to dig prized deposits on federal lands when they were told no, you can't.
A moratorium announced last Friday halts any new leases.
“If every coal outfit in Campbell County shut down and reclaimed all the disturbed land they have right now ultimately, we would have more grazing land. But it would be bad for the county. Agriculture can’t make up for that.”Gerry Geis, rancher
Recommended Stories For You
Jim Magagna, executive vice president of the Wyoming Stock Growers Association, says what is bad for the state's economy is bad for producers, and that the feds have once again overstepped.
"This is yet another example," Magagna says, "of the federal government's executive branch overstepping. Could the state do a better job? I don't know. But the federal government needs to do a better job and to be more thoughtful in its approach."
Magagna is a lifelong rancher, past president of the National Public Lands Council and a former director of the Wyoming Office of State Lands and Investments. He has represented agriculture on numerous councils and advisory boards.
"The word 'moratorium' implies maybe not forever," Magagna says, "but we are very concerned about it. The ban runs in opposition to the industry in our region that is such an important part of our economy in this state, and what is bad for our economy in Wyoming is bad for everybody in Wyoming."
No where will the moratorium have a bigger impact than in the Powder River Basin, a coal and ranching hub east of the Big Horn Mountains.
Mining companies pay huge fees for the right to operate on federal lands, and Cloud Peak Energy and other companies had plans to work two mines in the region. The Powder River Basin has a trillion tons of coal in the ground.
Rancher Gerry Geis of the Geis Ranch pastures sheep and cattle southwest of Gillette, a Powder River city in Campbell County that calls itself "The Energy Capital of the Nation."
Geis sees both sides of when it comes to how a ban on mining could affect grazing.
"If every coal outfit in Campbell County shut down and reclaimed all the disturbed land they have right now," Geis says, "ultimately, we would have more grazing land. But it would be bad for the county."
Geis said so many good-paying jobs would be lost to the area, it would have a negative impact on ranching. "Agriculture can't make up for that."
He said the moratorium's true effect won't be felt for some time. "I have friends in in the industry, and what they tell me is that because of all the other initiatives before, they weren't going to renew the leases anyway because it's not profitable and they already have the inventory that they need."
In the short run, he says, nobody is expecting much. "It's a blow to the industry and it will be a blow to us in the future if it continues because it hurts the economy, and if the economy as a whole is not vibrant, that affects farming and ranching."
Coal is an outlaw when it comes to climate change, but Wyoming has remained its champion.
In fiscal year 2014, Lands and Investments leased 391,490 acres of coal asset, with about 29.3 million tons of surface mined coal produced and 2.4 million tons of subsurface mined coal.
Lands and Investments is a state agency that manages state land granted back in 1890 by the federal government. Those 4.2 million acres are held in trust to produce income to support public schools and other state institutions named in the original grants.
Wyoming is looking for new markets for coal and new strategies, such as underground coal gassification, in which coal is burned underground instead of in a power plant, and more cleanly, but the practice may contaminate groundwater.
Geis attended one of the public "listening sessions" that the feds held last summer as they reviewed leases. Working people and governors alike from across the west made it known then that Wyoming and other western states could ill-afford to lose any coal leases.
"I am not surprised by the decision," Geis said. "I figured it was coming."
Coal producers are now calling for a review by the Department of the Interior.
Interior Secretary Sally Jewell has said that the recent decision is a means for the government to have more time to study the benefits of coal and its impact on the environment.
Western Caucus Chairman Cynthia Lummis (R-Wyo.) charges that the ban is a political posturing by the president during a campaign year, and that it's being done at the expense of jobs for working people.
The coal industry represents 14 percent of Wyoming's economy and one in five jobs in the state.
Roughly 40 percent of the coal produced in the U.S. comes from federal lands. Wyoming produces more than three times as much as the next leading coal producing state, West Virginia, and many of the state's budget surpluses come from energy.
Falling natural gas and oil prices have already gutted the coal industry. Almost half the debt issued by U.S. coal companies is in default.
Over the past five years, coal has lost 94 percent of its value, from $68.6 billion to $4.02 billion.
Portfolio managers expect the once mighty industry to continue to wither.
Mining companies like Cloud Peak Energy have already stockpiled billions of tons of coal on existing leases. Domestic demand is on the decline.
Neighboring Montana is also affected by the ban.