Powder River Basin Coal
History of the Coal Program
Early federal land and mineral policy was to dispose of the public domain lands fee simple. That is, the lands were patented to private parties and included all mineral interest. This policy continued until the early 1900s.
Several retention statutes enacted in the 1900s and 1910s provided first for coal, and later, other minerals to be retained by the US when the public domain was patented. This was during the period when much of the homesteading in the Wyoming Powder River Basin occurred; thus, now the land and mineral ownership is complex and varied.
In1920, the Mineral Leasing Act (MLA) was enacted. As a result, coal was no longer subject to mineral location (mining claims). Coal became a leased commodity, with development done by a federal coal lessee in compliance with the terms and conditions of the lease. BLM is the Department of the Interior (DOI) agency responsible for mineral leasing under the MLA.
Under the MLA, coal was leased both competitively and non-competitively. Competitive leasing occurred in areas identified as “known coal leasing areas (KCLA)” based on our knowledge that minable coal was in these areas. Non competitive leasing was allowed outside KCLAs, based on a party obtaining a prospecting permit, and through prospecting, establishing a preference right to a lease by proving that the lease area contained coal in commercial quantities.
From 1955 to 1970, large amounts of coal were leased with little consideration for need. There was no active program to enforce the MLA requirement for diligent development during this period. BLM issued a 1970 report that found from 1945 to 1970, there was a large increase in coal leases (ten fold) with a (75%) decrease in production. This was evidence of speculation in holding coal leases. In 1971, a coal leasing moratorium was declared.
In 1974, a new leasing program (EMARS) was introduced. This program was to be industry driven with a stronger look to industry’s needs. This program was short lived due to both congressional action and law suits. Several new laws were enacted in 1976 and 1977, as well as two Supreme Court decisions, Sierra Club v. Kleppe and NRDC v. Hughes, with all mandating a new coal leasing program. Also in 1977 the National Energy Plan was established calling for correction of the imbalance between leased coal reserves and production and the doubling of production by 1985.
The 1976 Federal Coal Leasing Amendment Act (FCLAA) amended the MLA specific to coal. FCLAA eliminated new non competitive coal leasing. It required diligent development and continued operations on coal leases, required the public get fair market value (FMV) for leases sold, and required that BLM assure maximum economic recovery.
The 1976 Federal Land Policy and Management Act (FLPMA) required that BLM manage all resources assuring public participation, land use planning, and multiple use of all resources. FLPMA reinforced BLM’s obligations and processes under the 1969 National Environmental Policy Act.
The 1977 Surface Mining Control and Reclamation Act (SMCRA) established standards for permitting surface coal mining on federal leases, and certain criteria for determining lands unsuitable for coal mining operations.
The Federal Coal Management Program was adopted in 1979 in line with the above legislation and results of the lawsuits. It adopted the 43CFR3400 regulations guiding BLM’s coal program. The coal program regulations provided for a process of addressing coal in land use planning, established coal regions and regional leasing, required closing pending non competitive leasing cases, sales procedures, diligence, maximum economic recovery (MER), regional coal teams, and public participation.
One regional lease sale was held in the PRB in 1982 under the program; a second sale was started. That sale was suspended in 1984 by allegations made regarding the 1982 sale. The allegations involved criminal disclosure of appraisal information pre-sale, and appraisal and sale procedures that failed to assure the public received FMV. There were also challenges of the adequacy of the planning and EIS work leading to these sales.
Two investigative reports were issued in 1984 to evaluate the allegations. The Commission on Fair Market Value Policy (Linowes Commission) report and the Review of Planning Considerations in Federal Coal Leasing (OTA) report resulted in a 1985 supplemental coal program EIS and changes in the conduct of the program. The program was to be flexible to respond to leasing based on situations. Leasing was to be orderly and predictable for state and local government and industry, and requirements were put in place to promote competition, assure FMV, establish data adequacy standards, clarify surface owner consent, require non competitive cases be closed in two years, set standards for inspection, production verification, MER, logical mining units, diligence, and establish the lease by application (LBA) process.
By 1989, no further leasing had been done since 1982. There had been insufficient interest in new leasing to justify a regional lease sale under the 1985 program, despite several calls for industry expressions of interest by the Powder River Basin (PRB) Regional Coal Team (RCT). However, existing operators were running short of reserves in many cases in order to maintain production at existing mines. One emergency lease application was filed in 1989, and in January 1990, the PRB RCT recommended that the region be decertified, subject to certain guidelines which included using the LBA mechanism and continued review of all applications by the RCT. Decertification meant that regional sales were not conducted, but that “leasing by application” was available for current mines to maintain production.
The PRB continues to operate as a decertified region today. The RCT is still in place and meets periodically to review regional activity and make recommendations on coal leasing in the region.
Since decertification, from 1992 to present, 21 LBA tracts have been offered for sale in the Wyoming portion of the PRB with 20 leased. At present 12 LBA tracts are pending, all of which have been recommended for processing by the PRB RCT and are in various stages of processing.