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Fri March 25, 2011
Salazar overstates coal earnings
By Kathryn Flagg
Laramie, Wyo. – When Secretary of the Interior Ken Salazar announced the upcoming sale of four coal leases in the Powder River Basin, Salazar predicted the sales would rake in anywhere from $13 to $21 billion. But it turns out that those numbers vastly overestimated projected revenues.
Wyoming can now anticipate adding about one billion dollars to the state coffers as a result of the coal sales. Bill Mai is the budget and fiscal manager for the state's Legislative Service Office. He says this revenue is still significant for the state budget, but also warns that the new leases may not lead to a quick and marked increase in royalties.
Instead, Mai predicts the leases will extend the longevity of coal mining in the state by giving mines a way to grow as they exhaust current resources. "It's sort of a requirement that additional leases continue to come on line so the mines have a place to go, but you have to recognize too that there's a limit to the infrastructure of those mines," he said. "It isn't as if we're going to go and double our coal production in a year with the addition of these leases."
Coal mining generates more than a billion dollars a year in taxes and royalties for the state. In addition to the recently announced sales, the Wyoming Mining Association has asked the Department of the Interior to consider leasing as many as as four billion tons of coal in the next ten to 20 years.