Friday, June 29, 2012

BLM 'Auctions' 720-Million-Ton North Porcupine Coal Tract To Single Bidder For $1.10 A Ton

I'm no fan of coal, but ... Climate Progress takes 3 paragraphs to communicate their ignorance here.

BLM 'Auctions' 720-Million-Ton North Porcupine Coal Tract To Single Bidder For $1.10 A Ton | ThinkProgress:

"The Obama administration’s Bureau of Land Management auctioned a major tract of Wyoming coal to Peabody Energy at a bargain-basement price of $1.10 per ton yesterday.
The North Porcupine coal tract in the Powder River Basin went to the single bidder, Peabody subsidiary BPU Western Resources, for $793,270,310.80 for 721 million tons...
This sale, made under the provisions of the Mineral Leasing Act of 1920, represents a massive fossil-fuel subsidy  ...
It's possible the auction process is flawed, but unhelpful to state an auction price constituted a subsidy price based on the density of pink elephants in low income households ... or whatever metric is fashionable today.
The price is depressed partly because the local market is shrinking, new EPA rules make the use of coal in the US more difficult, and the freight rates to get to the western ports are probably going to remain high as coal continues to be exported (coal makes up almost half the tonnage of annual train cargo in the US - reference here)

A compelling argument was recently presented that environmentalist should, instead of stupidly bitching about resources being sold cheaply, buy the resources they want kept in the ground (see article here).
If not, somebody will bid at auction, and find a market to sell it to.

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