September 25, 2017 Read More →

Cloud Peak Energy, in Standing Behind Push for Access to More Federally-Owned Coal, Ignores Market Momentum

Gillette News Record:

When Cloud Peak Energy applied in 2015 to open up 3,508 acres of public land to expand the Antelope mine south of Wright, it couldn’t know the industry was on the cusp of a historic downturn spurred by low natural gas prices and increased federal regulation on carbon dioxide emissions and federal leases.

Two years later, the West Antelope 3 application that promises to give Cloud Peak and the Antelope mine access to another 441 million tons of coal is the only PRB federal lease effort still active.

No applications were filed in 2016, and others that had begun earlier were dropped by coal producers when the downturn saw production drop by more than 25 percent over a two-year span.

Because the federal permitting process takes anywhere from eight to 10 years, Cloud Peak decided to continue with its lease after President Donald Trump lifted an Obama-era moratorium earlier this year on issuing leases to mine coal on federal land.

Shannon Anderson, an attorney and organizer for the Powder River Basin Resource Council based in Sheridan, agreed this application could be a test of the “new normal” for PRB coal leases.

Anderson also said the BLM needs to make sure it gets a fair financial return from Cloud Peak if a permit is approved. Whether coal companies are paying a fair price to mine federal coal is one of the main issues that led to Obama administration to issue the lease moratorium.

A recent federal appeals court ruling could impact Cloud Peak’s application as well.

Last week, the 10th Circuit Court of Appeals ruled that the BLM needs to consider not only the impact mining has on the federal land it happens on, but the impacts of burning that coal to produce electricity. An argument that extending the impact potential is moot because a power plant will simply burn coal from somewhere else needs more support, the court ruled.

While the lawsuit and ruling are based on mining operations at the Black Thunder and North Antelope Rochelle mines in Campbell County, the two top-producing coal mines in the world, neither have any significant active coal lease applications, Anderson said.

But the ruling does give environmental groups some legal ammunition to fight all new federal coal lease applications on the basis of the impact the coal could have when burned, she said.

“It should have some implications for how the BLM does its analysis on this lease and the climate benefits of not leasing the coal,” Anderson said. “It’s climate change, and the BLM is under an obligation to do it and the science is sound. … We hope that’s one of the things the BLM will look at as they go forward with the process.”

More: Lease tests coal’s ‘new normal’

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