Feds finalize rule to end future coal leasing in Powder River Basin

The U.S. Bureau of Land Management last week finalized its plans to end future coal leasing of about 1.7 million acres of federal land in Montana’s Powder River Basin as part of an effort to reduce greenhouse gas emissions and as the agency says the future of the U.S. coal market is uncertain amid a decline in demand.

The record of decision for the Miles City Resource Management Plan amendment, released Nov. 27, says that existing leases for the Spring Creek and Rosebud mines in the basin would allow their operations to continue for at least a decade. But it has Montana’s U.S. Sen. Steve Daines vowing to reverse the decision through legislation and the state’s governor calling it “a disaster.”

The Bureau of Land Management’s record of decision is essentially the same as the recommendation it made in May, when it called for an end to future coal leasing in the Powder River Basin in Montana and Wyoming, which produced about 40% of the nation’s coal, though production has declined in Montana in recent years.

The Bureau of Land Management had until Dec. 3 to complete a record of decision stemming from a 2022 federal court decision in Montana that found the bureau had violated the National Environmental Policy Act by failing to analyze public health and environmental effects of coal mining when it granted previous land use plan amendments in both 2015 and 2019 in the basin.

The record of decision says it was made when considering the bureau’s analysis that coal markets would continue to decline and there were no projected new mines in the area, while coal-fired plants could close or be converted to utilize renewable energy.

“The Approved RMP best attains the continuity of existing mining operations at the Rosebud Mine to 2060 and Spring Creek Mine to 2035, while reducing long-term degradation and risks to public health or safety, and other consequences of greenhouse gas emissions,” the decision says.

Earlier this year, the Bureau of Land Management said the two mines produced 18.5 million short tons (37 million pounds) of coal in 2022, about two-thirds of what they produced in 2007.

The decision says that existing coal leases at the Spring Creek Mine, owned by the Navajo Transitional Energy Company, would allow operations to continue there through 2035 because the company has not applied for any further permits.

The Rosebud Mine, owned by Westmoreland, has existing mining permits on two areas of land that run through 2039, which the record of decision said could be extended by the Montana Department of Environmental Quality depending on how quickly coal is mined. The record of decision would allow existing mining to continue in Wyoming through 2041.

The Rosebud Mine provides coal to Colstrip and some local users, and Colstrip is set to operate at least until 2042, its owners have said, but the record of decision says Colstrip’s future life expectancy is uncertain because of ongoing litigation. Still, based on the forecast production rate from the Bureau of Land Management, there would be enough coal to mine through 2060.

Gov. Greg Gianforte, who has sharply criticized the Biden administration’s energy policies and offered responses challenging the decision before it was finalized, said the decision is a “federal power grab.”

“Once again, the Biden-Harris administration is ignoring states and crippling our energy supply,” said the governor, a Republican, in a statement. “While Montana supports an ‘all-of-the-above’ energy strategy, the White House is picking winners and losers on the president’s way out the door. Simply put, this rule will destroy coal jobs and defund public education in Montana. It’s a disaster.”

Coal taxes in Montana go into a trust fund that collects interest and funds public school facility construction and upgrades, infrastructure projects, housing and economic development, amid a number of other things.

The final environmental impact statement analysis released in May found that Spring Creek and Rosebud would be able to continue supporting more than 600 jobs through 2035 and bringing in a total of about $50 million annually.

The Bureau of Land Management considered three other alternatives during the process before reaching the decision the close off future permitting. Those included a scenario in which no action was taken, and others in which some emissions were considered that would have also reduced the amount of potentially leasable land to just thousands, or hundreds, of acres.

Documents in the file for the Miles City Field Office decision show there were eight groups and agencies that protested the proposed plan that were either denied or deemed incomplete. Those came from the Montana Coal Council, Montana Natural Resource Coalition of Counties, the two mining companies, the Montana Department of Natural Resources and Conservation, the National Mining Association, and Daines.

The DNRC said that shutting off checkerboard parcels of federal coal would effectively restrict coal development on state and private lands, which is unaffected by the decision, and said the plan would cost the state billions.

But the Bureau of Land Management’s response said most of those lands were not expected to be leased or mined within the planning period, which runs through 2038, and that it would not preclude the state from allowing mining on its lands even as coal demand continues to decrease.

The U.S. Energy Information Administration projects U.S. coal production to drop from 610 million tons in 2022 to 450 million tons in 2040, and Western U.S. production to drop from 335 million tons to 224 million tons over the same period.

“It would be speculative for the BLM to include analysis of lost State revenue in consideration of predominant Federal coal estate and that it historically takes 10+ years to lease and permit a mine expansion,” the response document says.

Republican politicians are already discussing action either through Congress or through the federal court system. Wyoming Gov. Mark Gordon said the state would consider litigation but also plans to work with the incoming administration of President-elect Donald Trump to reverse what he called a “foolhardy decision.”

Daines said last week he planned to introduce a bill, similar to ones he has to oppose other energy policies from the Biden administration.

“At every turn the Biden administration has launched attack after attack on made in Montana energy and the people of Montana and the rest of the country rebuked the administration for it at the ballot box,” he said in a statement. “…Eastern Montana is rich in coal and mining operations and the jobs and coal produced in the Powder River Basin help support our national security, bolster our energy grid and create high-paying jobs.”

Gianforte also hinted he was looking toward the incoming Trump administration to reverse the decision.

“I look forward to a day when states across the country have a federal partner we can work with instead of having an administration ignore and undermine states at every turn,” he said.