A truck carrying a load of Powder River Basin coal (Photo by Dustin Bleizeffer of WyoFile).
While the Trump administration and Montana’s elected officials continue pushing to expand the state’s coal industry, companies on the ground appear to have a waning appetite.
The federal government recently rejected a bid on a new coal lease offered for 167 million tons of coal from Montana’s Powder River Basin and postponed a sale in Wyoming scheduled for last week.
Navajo Transitional Energy Company was the only company to submit a bid for the lease in Montana for $186,000 for federal coal near the company’s Spring Creek Mine in Big Horn County. That works out to just a fraction of a penny per ton, and well below what the Bureau of Land Management estimates as the market value.
The last federal coal lease sale in the region went for $1.10 per ton, according to federal data, for a total of $793 million for 721 million tons, back in 2012. At the same price, a bid for the Spring Creek lease would generate more than $183 million.
Navajo Transitional Energy operates the Spring Creek Mine in the area, which the federal government approved for expansion earlier this year, allowing access to an additional 39.9 million tons of coal, which could keep the mine operational for up to 16 more years.
Wyofile previously reported that Navajo Transitional had warned that market value for coal in the Powder River Basin was far below previous valuations, and in documents submitted before the bid said that one reason included low forecasts for selling the coal, as many coal-fired power plants in the region are set to go offline in the next two decades.
The Bureau of Land Management rejected NTEC’s offer for the Spring Creek lease, saying it did not meet the requirements of the federal Minerals Leasing Act, which requires a fair-market value for any federal lease.
In an email, a spokesperson for the Department of the Interior said the BLM determines fair market value through “a rigorous process that includes economic modeling, analysis of comparable sales, and current market conditions to ensure taxpayers receive a fair return.”
“The BLM remains committed to supporting responsible coal development as part of a balanced approach to managing public lands and resources,” the department said.
Funds from federal coal leases are split between the federal government and the state where the coal is mined, but part of the Trump administration’s “Big Beautiful Bill” lowered the federal coal royalty rate from 12.8% to 7%, decreasing how much money Montana is set to earn from each lease.
The low offer for the Spring Creek lease prompted BLM to postpone another auction on a 441 million ton West Antelope III federal lease in Wyoming. Navajo Transitional also requested the sale in association with its Antelope coal mine, and was reportedly the only party interested in bidding.
“While we had hoped for stronger participation, the postponed West Antelope III coal lease sale in Wyoming underscores the lasting damage from the Obama-Biden administration’s decades-long war on coal, which aimed to dismantle domestic production and shake investor confidence in the industry,” an Interior spokesperson wrote in an email. “Under President Trump, the Department of the Interior and BLM are restoring trust between government and industry as part of the broader push for American Energy Dominance.”
The West Antelope III sale has yet to be rescheduled.
Mining for Montana’s benefit
The low interest in coal leases comes as the Trump administration and Congress, with the support of all four members of Montana’s delegation have moved to greatly expand the potential offerings across the West.
Last year, the Biden administration had announced that it would be halting much coal leasing in eastern Montana, and had made steps toward stopping coal leasing on federal tracts of land due to concerns about climate change.
But just last week, the U.S. Senate voted to roll back the Biden-era Resource Management Plan (RMP) amendment for the Miles City BLM office, spanning most of eastern Montana, which had prohibited future coal leases in the region. The U.S. House voted in favor of the amendment in September, with both of Montana’s representatives joining the Republican majority.
“Montana energy is back,” Sen. Steve Daines said in a press release. “Mining is a vital part of Montana, providing nearly a thousand well-paying jobs and contributing nearly $3 billion to our state’s economy. That’s why I introduced a bill along with the rest of our Montana delegation to remove this anti-energy rule and support Montana’s coal miners.”
Daines did not respond to questions about the low interest in the recent coal lease or how increasing potential supply could further impact the market and Montana’s financial coffers.
Montana’s Republican Gov. Greg Gianforte had also supported reopening eastern Montana for coal leasing, saying it was essential to the state’s economy and revenue. Montana supplies 5% of the nation’s coal and derives 37% of energy generation from coal-fired power plants.
“Under the Biden Administration, BLM’s proposal would have rendered Montana’s coal resources useless, depriving Montana schools and other institutions of a critical funding source,” Gianforte wrote in a letter to the Trump administration. “Montana’s schools and public institutions need a good partner in BLM, and it is imperative that the agency embrace the opportunity to maximize the development opportunities for coal resources in Montana.”
Gianforte’s office did not respond to questions about the low interest in the recent coal lease or how increasing potential supply could further impact the market for Montana coal and the state’s financial benefit.
Conservation groups decried the move by Congress to overturn the resource management plan, saying that it came about through a multi-year public process, but was revoked through a single vote.
“It’s an egregious example of rich politicians thinking they know better than locals and experts. By legislating day-to-day management, Congress is hijacking careful planning and stewardship developed by local communities and experts,” said Alex Blackmer, with Wild Montana. “This reckless move puts not just one plan, but hundreds of land plans nationwide at risk of Congressional interference, unleashing chaos and uncertainty on ranchers, hunters, hikers, anglers, and businesses that depend on our public lands.”
Additional resource management plans from the Biden administration that banned future coal leasing, including in Wyoming’s Powder River Basin, are also being challenged in Congress.
In Montana, Gianforte has continued to push for expanding energy production in the state, most recently by convening an energy task force to “unleash American-made energy,” following Trump’s executive orders to bolster nationwide domestic fossil fuel energy sources.
Sonja Nowakowski, head of the Montana Department of Environmental Quality, leads the task force, which is expected to produce a report of recommendations and strategies for increasing power generation and transmission capacity, and cutting red tape, by next fall.
This story was originally produced by Daily Montanan, which is part of States Newsroom, a nonprofit news network which includes Utah News Dispatch, and is supported by grants and a coalition of donors as a 501c(3) public charity.
