The Bureau of Land Management (BLM), the agency within the Department of Interior responsible for the federal coal leasing program, has rejected the single bid received for the Hay Creek II federal coal lease tract located within the Powder River Basin in Campbell County, WY. The low bid of 21 cents/ton for 167 million tons of mineable coal represents a 15-year low offer to extract publically-owned coal from federal land in Wyoming. The Hay Creek II lease sale was announced in August 2013 after Kiewit Mining Properties, on behalf of its subsidiary Buckskin Mining Company, submitted a lease by application (LBA) in March 2006.

The BLM rejected Kiewit’s low bid after determining it “did not meet fair market value.” According to TCS’ recent report entitled “Federal Coal Leasing: Fair Market Value and a Fair Return for the American Taxpayer,” up to $29 billion has been lost over the past three decades due to the undervaluing of federal coal. With seven LBAs totaling 3.4 billion tons of mineable coal still pending in the Powder River Basin of Wyoming, taxpayers could lose $34 million for every 1-cent undervaluation by BLM. Yet, despite repeated Congressional directives to ensure a fair return for mining publicly-owned coal, the current system remains inadequate.

BLM’s rejection of Kiewit’s sub-fair market value bid follows a similarly bleak lease sale in August where the Maysdorf II North coal tract within the Powder River Basin of Wyoming received zero bidders. The Maysdorf II North LBA was submitted by Cloud Peak Energy, on behalf of its subsidiary Cordero Mining Company, and is estimated to hold more than 148 million tons of mineable coal.