BLM Rejects COVID-19 Royalty Relief For Wyo. Mines

In The News, Covid19BLM Rejects COVID-19 Royalty Relief For Wyo. Mines

This article by James Marshall first appeared in E&E/Greenwire on July 28, 2020

Top coal operators mining on public land won’t receive royalty relief to help with impacts from the coronavirus pandemic, according to the Bureau of Land Management.

Peabody Energy Corp. and Arch Resources Inc., the country’s two largest coal miners, cited COVID-19 in applications for royalty reductions in May.

BLM’s guidance for applying for temporary royalty relief due to COVID-19 said companies needed to show a coal lease would become economic with a lowered rate. BLM has removed those guidelines from its website.

Both companies had applied for royalty rate reductions at their operations in Wyoming’s Powder River Basin region. Peabody’s North Antelope Rochelle mine and Arch’s Black Thunder mine together produced more than 22% of total U.S. coal in 2018.

BLM rejected Peabody’s applications on July 21 because they were incomplete.

Arch withdrew theirs on July 9 but reapplied for a royalty reduction at its Coal Creek mine on the same day. That request, according to BLM’s clunky LR2000 data system, did not cite the pandemic. LR2000 did not reflect these updates last week.

BLM, Arch and Peabody did not return requests for comments.

Wyoming Republican Gov. Mark Gordon had advocated for temporarily cutting royalty rates for coal, oil, gas and other extractive industries. The state is in the middle of a budget crisis and relies heavily on fossil fuel royalties. But saving coal jobs and keeping coal companies afloat took precedent, Gordon’s spokesperson said (Greenwire, June 23).

Autumn Hanna, vice president of Taxpayers for Common Sense, previously told E&E News that the current 12.5% royalty rate for open pit coal mines already yields an unfair return for taxpayers. She added that royalties aren’t tied to demand, so a lowered rate would not generate higher coal sales.

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