Time Is Energy

While Arch, Ambre, and Peabody hope to reap sizable

profits in overseas markets, the US public would unfairly

shoulder much of the financial burden. The economics of

these export proposals rest, in part, on a massive public

subsidy delivered through the US Department of Interior’s

coal-leasing program that charges the companies a

pittance for a valuable resource. Coal companies are given

cheap access to taxpayer-owned coal, and allowed to

strip mine it from public lands, through auctions run by

the Bureau of Land Management (BLM). The BLM allows

companies to propose and set the terms of the lease to

maximise their profits. As a result, only three federal coal

auctions in the past 20 years have had more than one

bidder. Knowing there won’t be competition, companies

are free to enter the lowest possible bid for this coal. In

2012, the BLM gave Peabody access to 721 million tons

of taxpayer-owned coal for $1.10 a ton.

The Institute for Energy Economics and Financial Analysis

(IEEFA) estimates that the federal BLM’s undervaluing

of Powder River Basin coal has amounted to a public

subsidy of $28.9bn to the coal industry since 1980,

on the backs of US taxpayers.