Two coal lease tracts in the Powder River Basin will go up for sale in the next several weeks at the request of two operators in the area.
Cordero Mining and Kiewit Mining Properties requested the sales using the “lease by application” system. Under that system companies with existing mines can request specific tracts, often adjacent to their operations. The system has been criticized for limiting competition.
University of Colorado Law School professor, Mark Squillace, says often, such coal lease sales only attract one bidder.
“In the few cases where we've had multiple bids, it tends to be by the adjacent coal company which is also in the position to take advantage of the nearby coal because they have an existing mine that is maybe on the other side of the mine that has filed the application,” says Squillace. “Since 1991 we've never had 3 bids on any lease track, and in most cases, the vast majority of cases, only 1 bidder.”
He adds that lease sales should not be driven by operators’ needs.
“What you need is the government to step back and ask how much additional leasing is appropriate in this region. And if there is additional leasing that's appropriate, how can we design tracts to increase competition and thereby increase the revenues that are coming into the federal government,” he says.
Squillace will address the public at the Herschler Building in Cheyenne next Tuesday about some issue he sees with Powder River Basin coal leasing and opportunities to improve the current federal leasing system.
