Cloud Peak Energy Weighs In On Coal Lease Pricing Debate

Apr 11, 2017

Credit Stephanie Joyce

Interior Secretary Ryan Zinke says he is embarking on a re-evaluation of the system for approving new coal leases. The question of whether the American public is getting fair market value on those leases led the Obama administration to place a moratorium on new leases. Zinke lifted that moratorium two weeks ago.

Cloud Peak spokesman Richard Reavey says the coal pricing system is more than fair because, when coal companies bid on leases, they’re turned down if they don’t meet or exceed the Bureau of Land Management’s predetermined fair market price, a price the BLM doesn’t reveal in advance.

“40 percent of the selling price of a ton of coal from the Powder River Basin is delivered in taxes, fees, and royalties to the American people. This essentially makes coal one of the highest taxed commodities in the world.”

Some have been critical of the lack of bids at coal lease auctions. Reavey says many times a lease is located next to where an existing company is mining, so it’s not attractive to others. Reavey predicts that Secretary Zinke will recognize the fairness of the current pricing system and keep it in place.