9. How are other resources and values on and adjacent to the leases protected? 1. How will decisions be made?
Decisions on leasing (how much, where, conditions, etc.) will be made by BLM based on (NEPA?) the Water Resource and Development Act of 1999 and the Mineral Leasing Act, defined under 43 CFR 3480.0-5(a)(25). Both the Office of Surface Mining (OSM) and the US Army Corps of Engineers (USACE) have entered into agreements with BLM to be cooperating agencies in the LUA/EIS process. Decisions about how the mining proceed will be made through the mine permitting process involving OSM and WV Department of Environmental Protection (WVDEP). 2. Why consider leasing coal in this area?
The coal is a federal asset, subject to leasing to meet the objectives of the Bureau of Land Management—Energy and Non-Energy Mineral Policy, dated April 21, 2006. The coal was acquired by the US Government some time ago to protect the USACE East Lynn Lake water project from the potential impacts from surface mining. Since that time, many laws have been passed (SMCRA. NEPA, ESA, FLPMA, etc) and regulations put in place to manage the mining process and protect the environment and other resources. The coal in the vicinity of the proposed lease area has been of interest to local coal companies for some time and the NEPA/planning process was triggered by the lease applications from two companies. 3. Why is BLM making the decision?
Typically, the surface management agency, in this case USACE, plays a key role in the leasing decision, especially when surface impacts are anticipated. In this case, language in Section 574 of the Water Resource and Development Act of 1999 refers that decision to BLM. 4. How does the leasing process work?
The leasing process, triggered by the lease applications, is described in the BLM regulations on competitive leasing at 43 CFR 3425. The steps involved are summarized in the graphic on this website and include issuing public notices, soliciting information from the public and coal companies, preparing a land use plan and EIS, providing opportunities for public participation and agency coordination, public review and protest, hearings, a governor’s review, and an open competitive leasing process. 5. How much does the BLM get for leases and royalties?
Income from coal leasing occurs from three primary methods: bonus bids at the time of lease sale, rental for the lease prior to production, and royalty for produced coal. Bonus bids result from the open, competitive auction process (usually sealed bid) when the leases are offered. Bonus bids over the past several years have been averaging about $.80/ton nationally; the minimum bid is often set at around $100/acre but must equal the fair market value of the lease. Generally, royalty from federal coal mined underground is 8 percent of the gross sales price. The rental prior to production is calculated at $3.00 per acre per year (or $39,270/year if all are leased). The bonus bids at the time of lease sale are determined by competitive bidding. Preliminary estimates indicate that there may be approximately 30 million tons of recoverable coal in the proposed leases and the current value for coal from this region is approximately $40/ton (Dec. 2006). That computes to approximately $1.2 billion in gross sales and potentially $72 million to the state of West Virginia, not including the bonus bid. 6. Where does the money go?
In general, 25% of the lease-generated revenue goes to the US Treasury General Fund and 75% goes to the state, in this case West Virginia. The revenue raised by the state coal tax (5%?) would remain in West Virginia. 7. What are the roles of the US Army Corps of Engineers (USACE) and the other federal and state agencies?
The USACE and the US Office of Surface Mining (OSM) are both cooperating agencies in the process and will be actively involved in the analysis and LUA/EIS preparation. The existing uses, resource data, and plans for the area will come primarily from the USACE and West Virginia Department of Natural Resources (WVDNR), who has a license for use of the East Lynn Lake Project area from USACE. OSM and the West Virginia Department of Environmental Protection (WVDEP) will be involved in mine permitting if leasing occurs. Other federal, state and local agencies will be participating in the process and some will implement specific consultation processes. Examples of those processes include the US Fish and Wildlife Service (USFWS) for threatened and endangered species, and the State Historic Preservation Office (SHPO) for cultural resources and consultation with Native American Tribes. 8. How long will the LUA/EIS process take?
The proposed schedule is posted on this website. A decision on leasing is expected in early 2009 based on the estimated schedule. The actual leasing and permitting process would follow that decision and could take 6-12 months. 9. How are other resources and values on and adjacent to the leases protected?
The LUA/EIS process concludes with a decision that can include mitigation measures designed to avoid or decrease any adverse impacts that have been identified during the process. The decision, leases, and any other permits can also identify and implement monitoring to assess impacts over time. The process also will include one or more alternatives that address issues identified during the scoping process. The actual leases can also include terms and conditions to protect other resources. Other required permits can include requirements to protect the public and resources in terms of impacts, safety, reclamation, subsidence and other risks.
Who can qualify to bid on the leases? In order to qualify for a federal coal lease, you must: be a citizen of the United States; or, An association of citizens organized under the laws of the United States or any state thereof; or, a corporation organized under the laws of the United States, or of any state thereof, including a company or corporation operating a common carrier railroad; or, a public body including municipalities. In addition to these general qualifications, you must also comply with these special leasing qualifications:
The aggregate acreage in leases and applications in which you can hold an interest, directly or indirectly, cannot exceed 75,000 acres in any one state and no more than 150,000 acres in the United States. You may not acquire any other mineral leases under the Mineral Leasing Act of 1920, as amended, if you hold or have held a federal coal lease for 10 or more years that has not produced commercial quantities of coal. Other minerals that can be leased under the Mineral Leasing Act of 1920 include oil, natural gas, sodium, potassium, phosphate, sulfur, and gilsonite. As a part of the application for a new coal lease, you must provided a self-certified statement that you are in compliance with all applicable laws and regulations.