WildEarth Guardians

Monday, March 10, 2014
Colorado Coal Mine Expansion to Fuel Climate Exports

Guardians Appeals to Overturn Interior Department Coal Lease Amidst Federal Scandal
Contact: Jeremy Nichols (303) 437-7663

Denver—Late last week, WildEarth Guardians appealed to overturn a new coal lease approved in Colorado that would fuel a company’s plans to ship more global warming pollution overseas, even as the Interior Department is under fire for turning a blind eye to exports and illegally selling coal in Colorado.

“This latest coal lease is a black eye on American’s plan to combat global warming,” said Jeremy Nichols, WildEarth Guardians’ Climate and Energy Program Director.  “With coal exports threatening to destroy all progress being made in the U.S. to curtail carbon and safeguard the climate, the Interior Department must rethink these latest leasing plans.”

Approved on February 4 by the Bureau of Land Management, the Interior Department agency charged with managing federal coal, the Spruce Stomp lease would be sold to Bowie Resource Partners, LLC, a Kentucky-based coal company.  The lease would expand the company’s Bowie Number 2 mine east of the town of Paonia in western Colorado’s Delta County.

Bowie Resources already has agreements with ports in California to export up to 2.3 million tons of coal annually.  The company is seeking an additional 1.2 million tons of capacity in California and looking to secure export capacity in the Pacific Northwest.  The company recently tried to secure an agreement from the Port of Oakland for additional export capacity, although those plans were rejected. 

Government investigators last month found that the Bureau of Land Management was failing to take into account the economic and environmental implications of exports when leasing federal coal.  Both the Government Accountability Office and the Interior Department’s Inspector General specifically found that Bureau officials in Colorado did not consider coal exports because of their claim that “there were few or no coal exports from their state” (see GAO report at 38).

However, not only is coal currently being exported from the Bowie Number 2 mine, but a neighboring mine, the West Elk mine, owned by Arch Coal, is also exporting.  On a recent earnings call, Arch announced that 50% of the West Elk mine’s production was exported in 2013 (see p. 3 of transcript).

To boot, the Interior Department’s Inspector General found that in Colorado, the Bureau of Land Management has been illegally selling coal, both by selling leases at below fair market value and by negotiating prices with coal companies.  A recent Denver Post story found the Bureau of Land Management’s “sloppy leasing” has cost millions.

Despite these revelations, the Bureau of Land Management approved the Spruce Stomp lease without even mentioning, let alone considering, the potential for coal exports.

“Turning a blind eye to coal exports coupled with illegal leasing is a recipe for fraud,” said Nichols.  “A fraud on American taxpayers, who stand to lose revenue because the Interior Department is undervaluing coal, and a fraud on our climate, which is being jeopardized because the Interior Department appears to be subsidizing coal exports.”

The Spruce Stomp lease would add 8 million tons of coal to the Bowie Number 2 mine and expand it by 1,790 acres.  Last week, Guardians filed a notice of appeal with the Interior Board of Land Appeals and will file a Statement of Reasons in early April detailing why the Spruce Stomp lease should be overturned.