Lease approval sends positive signal to Utah's coal industry

By John Rogers

The newly confirmed interior secretary in the Cabinet of Pres. Donald Trump has made an impact on the coal industry in Utah in one of his first official actions. Secretary Ryan Zinke approved a $22 million coal lease for a central Utah mining company on Feb. 15.

The lease unlocks 56 million tons of recoverable high-BTU, low-sulfur coal in Sevier and Sanpete long sought by Bowie Resources in an effort to prolong the life of the SUFCO coal mine, Utah’s largest coal mine, near Salina and locally operated by Bowie’s subsidiary, Canyon Fuel Co. The lease is expected to add nine years to the life of the SUFCO mine before minable coal runs out. This lease is expected to return $194 million in royalties and taxes to the government. SUFCO is under contract to supply PacifiCorp’s nearby Hunter and Huntington power plants through 2020.

The coal industry at the SUFCO and other area mines has nearly 1,700 mining and related jobs.

At the same time, Zinke made a move he said signals a new focus on energy development on public lands “where appropriate.” He appointed Mike Nedd as acting director of the national Bureau of Land Management. Nedd was described as a career employee and was assistant director for energy, minerals and realty management, holding that position since 2007.

Zinke’s statement when appointing Nedd has energy developers thinking change is coming. “Let me make one thing clear: The Interior Department is in the energy business, and Mike is an energy guy who understands the balance we must strike when developing resources and creating jobs on our public lands. It is my hope that working together he will help identify areas where we can expand responsible mineral development while still conserving habitat and wildlife,” Zinke said.

“The United States has more coal than any other nation on Earth and we are lucky to be at a time in our history that we have the technology available to responsibly mine coal and return our land to equal or better quality after,” said Zinke. “For many communities and tribes in Utah, Montana, New Mexico and other states across the West, coal on public lands has been both a boon and a missed opportunity. With the potential for thousands of jobs and millions in economic opportunity, the Interior Department is committed to balancing the development and conservation of these resources. The Greens Hollow lease sale is a sign of optimism for the Trump administration and the pro-energy and pro-growth economic policies to come.”

On Jan. 4, the Utah BLM office held a competitive coal lease sale for 6,175 acres of the underground Greens Hollow coal lease tract following several stages of environmental analysis. The bid of $22.85 million by Canyon Fuel was determined to be the high and acceptable bid ensuring fair market value of the coal.

The tract is part of the Wasatch Plateau Known Recoverable Coal Resource Area and is immediately adjacent to the operating SUFCO mine near Salina. The lease is wholly underground coal with approval for two small surface disturbances necessary for safety and essential mine services. The Greens Hollow lease is feasible to underground mining, which helps ensure the vital water, aesthetic, and archeological resources are protected, the BLM office said in a release.

According to the U.S. Forest Service, coal leasing and active underground mining have occurred in the area since the 1940s. The existing mine in Salina Canyon provides electricity to about 1.4 million households. The coal resources in the Greens Hollow Tract could power 11.8 million homes.

Environmental groups that include the Sierra Club and the Grand Canyon Trust appealed the lease of tract last year, citing potential impacts to habitat for the imperiled greater sage grouse.

Nathaniel Shoaff, an attorney with the Sierra Club, blasted the recent lease decision. “Today Secretary of the Interior Zinke sold out Utah to please a single, out-of-state coal company. Despite low demand in the U.S. and international markets for the coal Utah is already mining, Zinke has now placed over 6,000 acres of public land in jeopardy,” he said.