Five Colorado Coal Leases May Proceed Despite Federal Moratorium

Photo: Trapper Mine near Craig, Colorado
A backhoe dumps coal into a haul truck at Trapper Mine near Craig, Colo. The coal is taken to a crusher behind Craig Station, a coal-fired power plant, to begin the process of turning it into energy.

Posted 10:50 a.m. | Updated 4:15 p.m.

The Obama Administration has announced a top-to-bottom review of the coal leasing program on federal lands, including a pause in "new significant coal leases" while the review proceeds, but five Colorado applications may go forward anyway.

The five Colorado mines include Colowyo, Bowie No. 2, Foidel Creek, Deserado and West Elk.

Five leases at four Colorado mines "potentially subject" to the moratorium include now-shuttered Elk Creek Mine (with two), King II Mine, Bookcliffs, New Elk Coal Co.

Coal mining on federal lands accounts for roughly 40 percent of U.S. production.

U.S. Department of the Interior Secretary Sally Jewell said Friday in a conference call with reporters that the review could take as long as three years. The federal government wants to look at royalty rates and how to account for the environmental impacts of the coal. The pause will not impact existing mine operations on federal lands, which are estimated "to be enough to sustain current levels of production from federal land for approximately 20 years at current rates."

During the moratorium, Jewell said there will be "limited common sense exemptions under the pause," including lease modifications.

Lee Boughey, senior manager of communications at Tri-State Generation and Transmission Association, which owns Colowyo Mine, said its application was a modification to an existing lease to address protections for greater sage grouse habitat.

"It's a commonsense response to what's a very reasonable modification to our existing leases," he said.

In a statement, Colorado Mining Association President Stuart Sanderson said that "the action will discourage the development of coal reserves and will actually reduce the amount of royalties paid and returned to the state."

In 2014, the group reported that Colorado producers paid federal royalty rates amounting to about $37 million.

Rep. Scott Tipton, a Republican who represents the Western Slope, said the moratorium "jeopardizes America’s energy future."

“This decision reeks of contempt for rural America and for the most vulnerable Americans who will suffer as electricity prices increase and the reliability in the grid decreases," he said in a statement.

The environmental group WildEarth Guardians called the announcement a "major victory for the climate and for America."

In Colorado coal country itself, the response was muted. In Moffat County, where the Colowyo and Trapper mines extract coal on federal land, County Commissioner Chuck Grobe said he'll be reviewing all the details before issuing judgment.

"It's important to get all the facts on it so we could have a good discussion on it," he said.

The Interior announcement has an added layer of difficulty for Moffat County officials because WildEarth Guardians challenged federal coal leases at Colowyo and Trapper mines. A judge ordered both mines to re-do an assessment for more detail on the environmental impacts of how coal is extracted and burned. Colowyo has completed its assessment. Trapper Mine is in the middle of completing its review.

Grobe said Moffat County has a lot of moving pieces to track in the coming months when it comes to coal leases on federal lands.