US rejects bid to buy 167 million tons of coal on public lands for less than a penny per ton

By MATTHEW BROWN, Associated Press

BILLINGS, Mont. (AP) — Federal officials rejected a company’s bid to acquire 167 million tons of coal on public lands in Montana for less than a penny per ton, in what would have been the biggest U.S. government coal sale in more than a decade.

The failed sale underscores a continued low appetite for coal among utilities that are turning to cheaper natural gas and renewables such as wind and solar to generate electricity. Emissions from burning coal are a leading driver of climate change, which scientists say is raising sea levels and making weather more extreme.

President Donald Trump has made reviving the coal industry a centerpiece of his agenda to increase U.S. energy production. But economists say Trump’s attempts to boost coal are unlikely to reverse its yearslong decline.

The Department of Interior said in a Tuesday statement that last week’s $186,000 bid from the Navajo Transitional Energy Co. (NTEC) did not meet the requirements of the Mineral Leasing Act.

Agency representatives did not provide further details, and it’s unclear if they will attempt to hold the sale again.

The leasing act requires bids to be at or above fair market value. At the last successful government lease sale in the region, a subsidiary of Peabody Energy paid $793 million, or $1.10 per ton, for 721 million tons of coal in Wyoming.

President Joe Biden’s administration sought to end coal sales in the Powder River Basin of Montana and Wyoming, citing climate change.

A second proposed lease sale under Trump — 440 million tons of coal near an NTEC mine in central Wyoming — was postponed last week following the low bid received in the Montana sale. Interior Department officials have not said when the Wyoming sale will be rescheduled.

NTEC is owned by the Navajo Nation of Arizona, New Mexico and Utah.

In documents submitted in the run-up to the Montana sale, NTEC indicated the coal had little value because of declining demand for the fuel. The Associated Press emailed a company representative regarding the rejected bid.

Most power plants using fuel from NTEC’s Spring Creek mine in Montana and Antelope mine in Wyoming are scheduled to stop burning coal in the next decade, according to an analysis by The Associated Press.

Spring Creek also ships coal overseas to customers in Asia. Increasing those shipments could help it offset lessening domestic demand, but a shortage of port capacity has hobbled prior industry aspirations to boost coal exports.