Montana delegation, coal companies, weary of federal leasing pause

by Tom Lutey

Despite assurances from Interior Secretary Sally Jewell that companies desperate for public coal will be given a loophole in a federal moratorium on new leases, mining companies remain skeptical.

Jewell, speaking before the House Natural Resources Committee this week, made the assurance while being questioned by U.S. Rep. Ryan Zinke, R-Mont.

Zinke said Western jobs were in jeopardy if exceptions weren’t made.

“We believe we’ve made accommodations so there will be no impact on coal jobs, Jewell said.

Jewell said a number of exceptions were made to assure current coal business was uninterrupted during the leasing moratorium that began Jan. 15. The Obama administration in January said the moratorium was needed so it could determine whether public coal leases were priced for market value and whether the costs of climate change and human health were being considered.

The Interior Department grandfathered in several pending leases to keep coal flowing, Jewell said. It also made exceptions for metallurgical coal and for mines at risk of shutting down.
But those assurances didn’t convince coal companies, or lawmakers like Zinke, who cited nine states where jobs could be affected by the moratorium.

“So, do I have your commitment then that if a mine applies for one of these exceptions your agency will work to ensure they’re processing those requests and the application is done before they have to shut down,” Zinke said.

Cloud Peak Energy which operates Spring Creek Mine in southeast Montana, told The Gazette that Jewell has framed the moratorium as lasting one to three years. But similar stoppages have taken much longer, said Rick Curtsinger, Cloud Peak spokesman.

Jewell isn’t in a position to speak to the length of the moratorium because she’s likely leaving office with term-limited Pres. Barack Obama in early 2017. If the moratorium stretched into five or six years, Cloud Peak would be in trouble, Curtsinger said.

The permitting process for coal leases takes years, Curtsinger said. There is a 2013 Cloud Peak lease by application, or LBA, request stopped by the moratorium that will be troublesome for the mining company if the moratorium takes longer than expected.

“When Cloud Peak Energy submitted the LBA for Spring Creek Mine early in 2013, we anticipated mining would begin in 2022, and we still hope to make that target,” Curtsinger said. “It is a tight timeframe with the Administration’s review and the length of the leasing and mining permit process. Mining of this coal would generate significant revenues for Montana from the lease, as well as the royalties and taxes paid when the coal is mined and the jobs and economic activity required for mining.”

Spring Creek mine generated $52 million in Montana taxes and royalties in 2015. The mine also bought $17 million in Montana goods and services from other companies, Curtsinger said.

Wednesday, U.S. Sens. Jon Tester, D-Mont., and Steve Daines, R-Mont., pressed Jewell on making sure the leasing moratorium wouldn’t harm Montana coal production. The two Montana senators sit on an appropriations panel, which was reviewing the Department of Interior’s upcoming budget.
Tester suggested the Senate put a time limit on the moratorium. Jewell said she would go along with that because it assured that after she left office the study would still be completed.

This isn’t the first time the federal government has placed a moratorium on coal leases so the program could be assessed, said Colin Lauderdale of Northern Plains Resource Council. The Reagan Administration stopped leasing in the 1980s so prices could be assessed. That pause lasted three years.

It’s important to note that the requirements for coal leases, line environmental review, are continuing despite the moratorium, Lauderdale said. Consequently, work should continue on projects like the one at Spring Creek, despite the leasing pause, provided federal officials keep the process going.