Lots of coal news this past couple of weeks with a fair bit revolving around the Powder River Basin of Wyoming and Montana. What does the Powder River Basin have to do with the Washington landscape? Coal from the Powder River is currently being shipped via long coal trains through Washington State to a coal terminal in southwest British Columbia and there are active efforts to construct very large coal shipping terminals in Washington State to ship Powder River coal.
New York Mayor Michael Bloomberg announced a $50 million dollar gift to the Sierra Club to help eliminate coal fired power plants washingtonpost./national/health-science/mayor-bloomberg-gives-50-million-to-fight-coal-fired-power-plants. Not much direct impact to Washington State since Washington's only coal fired electric power plant is proposed to close in the next few years. But there are indirect impacts as coal use shifts and possibly an impact on CO2 and the rate of climate change.
In the north Powder River Basin a billionaire candy magnate Forrest Mars purchased a one third interest in the Tongue River Railroad. By purchasing the stake in the railroad, Mars will block the railroad from crossing his ranch but now owns a stake in the rest of the line along with Arch Coal and BNSF. Arch and BNSF along with Mars plan to build a railroad line to Miles City, Montana so that Powder River coal mined in the Ashland area can be shipped via rail to the existing main line railroads through Miles City. From Miles City Arch and BNSF can run coal trains to power plants and have every intent to use railroad lines to coal terminals for shipment to Asia. Mars apparently will no longer be supporting legal efforts to block the railroad. coal railroad fight deal.
I found this letter to the editor in the Billings paper an interesting juxtaposition of property rights and coal mining development and railroads billingsgazette/mailbag. The construction of railroad lines through the Powder River Basin has opened up coal mining of the basin far beyond its previous mining activity. The State of Montana has eminent domain laws that are very favorable to railroad and pipeline proposals. The intent of the laws is to ease the opening of otherwise non economic coal deposits. The ranch land taken by private corporations through eminent domain is not expensive as much of it is dry land ranch, but the impact to ranchers is extensive. What I find interesting about the Montana laws is that normally Republicans are associated with private property rights, but when it comes to eminent domain laws in Montana the Democrats stand behind the private property rights of ranchers and the Republicans are strong advocates for eminent domain for use by private corporations - in this case railroads and gas extraction companies.
When I got back to Bellingham I read an article by Bellingham Herald's John Stark on Bellingham's version of coal politics bellingham-mayoral-candidates. The incumbent mayor is attempting to turn the entire race into a campaign over the proposed coal terminal despite the mayor having no role in the permitting process. Mr. Stark pointed out that the mayor initially was supportive of the project in February. Mr. Stark did not note that in October of 2010 the mayor proposed a resolution in favor of the coal terminal 25oct2010_Resolution Supporting Coal Terminal. The final recital of the resolution states "Whereas the Mayor of Bellingham, Dan Pike, joins the Council in its strong support of this project". The resolution was withdrawn as apparently the City Council did not share the mayor's enthusiasm for the coal terminal.
And lastly this press release showing that powerful financial forces are at work in the Powder River Basin of Wyoming and Montana.
ST. LOUIS, July 13, 2011 /PRNewswire via COMTEX/ --
Peabody Energy (NYSE: BTU) today announced that it is the winning bidder for the control of approximately 220 million tons of low sulfur coal reserves in the Powder River Basin of Wyoming.
The winning bid for the reserves was $0.95 per mineable ton, made through a sealed bid auction process. The company intends to add the "Belle Ayr North" reserve area to the assigned reserves related to the Caballo Mine, which had 2010 sales of 23.5 million tons and reserves of 822 million tons. The new reserve block would extend the mine life, increase the average Btu of the mine, allow for increased mine production as demand warrants and enable greater mine optimization.
The new reserve lease also extends Peabody's leadership in the United States' largest and most productive coal region. Peabody controls 2.9 billion tons of Powder River Basin coal reserves, and is well-positioned to meet the strong expected long-term demand growth from the region. The Powder River Basin continues to grow to serve new power plants and increased consumption from existing plants. Powder River Basin coal also is in increasing demand for exports to fast-growing Asian markets.
Peabody is the world's largest private-sector coal company and a global leader in clean coal solutions. With 2010 sales of 246 million tons and nearly $7 billion in revenues, Peabody fuels 10 percent of U.S. power and 2 percent of worldwide electricity.
6 months ago