Controversial Sale of Federal Coal Yields Low Prices with Only One Bidder

Amid growing public concern over the federal government’s coal program and its substantial contribution to climate change, the U.S. Department of the Interior’s Bureau of Land Management (BLM) auctioned off 8 million tons of coal in western Colorado Thursday as part of its “Spruce Stomp” lease sale.

The only bid at the coal sale was from Bowie Resources, LLC, the same company that proposed the parcel be auctioned through the BLM’s controversial lease by application process, which critics claim is noncompetitive and gives industry too much control over the leasing process.  The Spruce Stomp sale is not unique in this respect; since 1990, roughly 90 percent of all “competitive” federal lease sales have only had one bidder.

Bowie Resources bid 36 cents per ton for the coal — or $2.9 million in total for the lease. A recent analysis from Greenpeace found that the average price for publicly-owned coal was $1.03 per ton.  The company says this additional coal will help facilitate the expansion of its Bowie No. 2 Mine.  The mining and burning of the coal sold today will emit more than 21 million metric tons of carbon pollution into the air, or the equivalent carbon emissions of 4.5 million cars.

An analysis by the Center for American Progress released Tuesday also found that, in addition to concerns with the undervaluation of federal coal, BLM’s coal-leasing program in the Powder River Basin in Wyoming and Montana is costing more than $19 billion per year in losses and damages resulting from carbon pollution.

BLM does not typically consider the social cost of carbon when leasing federal coal. However, a recent court decision that blocked the expansion of a federal coal mine in Colorado for overlooking carbon costs has sparked new questions on whether BLM must account for these costs.

Controversial Sale of Federal Coal Yields Low Prices with Only One Bidder