BLM: Coal lease in Routt County part of ‘make America safe through energy independence’
July 25, 2017
Bureau of Land Management officials in Northwest Colorado are characterizing their evaluation of a new "lease-by-application" request from Peabody Energy to access 640 acres and, potentially, 4.1 million tons of federally-owned coal in Routt County as part of the Trump Administration’s “priority to make America safe through energy independence.”
Peabody, which exited bankruptcy in April, has applied to the BLM “for a lease by application,” that would allow it to mine the coal, which is lying beneath privately held surface land. The site is between Steamboat Springs and Hayden on a line about 12 miles south of U.S. Highway 40, adjacent to Peabody’s Twentymile Coal/Foidel Creek Mine.
“The BLM supports working landscapes across the West through its various multiple-use programs, like coal. We manage public lands for the benefit of current and future generations, and we welcome diverse views,” BLM Little Snake Field Manager Bruce Sillitoe was quoted as saying in a news release.
Routt County Commissioner Doug Monger said it’s “not unlikely" that the new mining area is already covered by a county permit.
The coal being sought by Peabody is within the boundary of Twentymile's existing surface area permit, and BLM spokesman David Boyd explained that, though the coal reserve sought by Peabody will be part of a competitive bidding process, it’s possible there won’t any other bidders for the coal
“It’s a competitive bid process, but it is likely to have only one bidder,” Boyd confirmed.
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He emphasized that the BLM will conduct an environmental assessment of the proposed mining expansion subject to public comment.
In 2016, Peabody moved its existing longwall mining system at Foidel Creek deeper underground to access the Wolf Creek coal seam beneath the Wadge seam it had been mining for many years. So, it’s also likely the new federal coal permit would involve coal already accessible by the longwall apparatus.
A BLM news release from the Little Snake Field Office in Craig reported that Peabody estimates it could recover 4.1 million tons of coal, generating as much as $13 million in royalties, half of which would go to the state of Colorado.
In the not-too-distant past, when both demand and prices for coal were higher, the 4.1 million tons in the proposed lease would have been equivalent to half a year’s production from the local mine. In 2012, when Twentymile Coal was still anticipating opening the new Sage Creek mine portal, Twentymile produced nearly 8 million tons.
Routt County Commissioner Cari Hermacinski said this week that, earlier this year, the Board of Commissioners, at Twentymile’s request, wrote to state officials asking them to consider reducing coal royalties to make it more economically feasible to mine coal in Western Colorado.