US Coal Exports
New! Exports Economic Contributions Report
Jun 20 2013

Crow Tribe Signs Coal Deal Supporting Exports (Business Week)

Feds approve 1.4B ton coal deal with Crow Tribe

BILLINGS, Mont. (AP) — The U.S. government approved plans by a Montana Indian tribe to lease an estimated 1.4 billion tons of coal to a Wyoming company that’s moving aggressively to increase coal exports to Asia, the company and tribe announced Thursday.

The deal between Cloud Peak Energy Inc. and the Crow Tribe involves more coal than the U.S. consumes annually.

The Bureau of Indian Affairs’ approval allows Cloud Peak to begin exploration work on the Crow reservation.

Cloud Peak has pending agreements to ship more than 20 million tons of coal annually through two proposed ports on the West Coast. Officials in Washington and Oregon oppose those and other port proposals on environmental grounds, but federal officials said earlier this week they plan only limited environmental reviews of the projects.

Cloud Peak CEO Colin Marshall said preliminary work in Montana on the so-called Big Metal coal mining project — named after a legendary Crow figure — has begun. The company says it could take five years to develop a mine that would produce up to 10 million tons of coal annually, and other mines are possible in the leased areas.

The Crow Tribe’s coal reserves are within the Powder River Basin, which accounts for about 40 percent of U.S. coal production. Cloud Peak paid the tribe $1.5 million upon Thursday’s BIA approval, bringing its total payments to the tribe so far to $3.75 million.

Future payments during an initial five-year option period could total up to $10 million. Cloud Peak would pay royalties on any coal extracted and has agreed to give tribal members hiring preference for mining jobs. The company also will provide $75,000 a year in scholarships for the tribe.

Crow Chairman Darrin Old Coyote said in a statement that the project is a high priority for the impoverished tribe’s 13,000 members. It revives longstanding efforts by the Crow to expand coal mining. A $7 billion coal-to-liquids plant proposed in 2008 by an Australian company never came to fruition.

A Cloud Peak mine would be the second on the Crow reservation. The Absaloka mine opened in 1974 and is owned by Westmoreland Resources Inc. It produces about 6 million tons of coal a year and employs about 80 people.

The three members of Montana’s congressional delegation — Democratic U.S. Sens. Jon Tester and Max Baucus, and Republican Rep. Steve Daines — issued statements supporting the new agreement. They said it offers a chance to increase job opportunities on the 2.2-million-acre reservation along the Montana-Wyoming border.

Cloud Peak’s 2012 coal exports totaled 4.4 million tons, extracted from the Spring Creek mine located just east of the reservation.

The company is pursuing a second new mine at another nearby site known as Youngs Creek after closing a $300 million deal on that property last year.

Beyond the export market, the company has said the coal from the Crow reservation could serve new domestic customers. But U.S. demand for coal has fallen sharply from its historic levels, making prospects for new domestic contracts uncertain.

See article here.

  • “The President’s National Export Initiative should place greater public emphasis on the role coal exports are playing to help reach the White House’s goal of doubling U.S. exports.”
    — U.S. Senator Lisa Murkowski, January 7, 2014
  • “…we need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America…We will double our exports over the next five years, an increase that will support two million jobs in America…We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores”
    — President Barack Obama, January 27, 2010
  • “Historically, U.S. companies seeking to expand their revenues focused first on increasing their number and share of U.S customers. For years, this focus served as a winning strategy for many of the most successful U.S. companies. Today, global economic trends make clear that successful companies are those that reach and sell to consumers outside U.S. borders and around the globe.”
    — 2011 National Export Strategy, U.S. Trade Promotion Coordinating Committee
  • “Federal regulatory agencies should not require climate change studies in the course of their permitting processes for proposed facilities. Coal will be consumed around the world regardless of U.S. trade policy. The only question is whether the coal is produced here in North America, where environmental standards are high, or elsewhere.”
    — U.S. Senator Lisa Murkowski, January 7, 2014
  • “At present 19% of the world’s population, 1.3 billion people, lack access to electricity and on New Policy Scenario projections there will still be 1 billion people without such access in 2030. To meet the UN Millennium Development Goal of eradicating extreme poverty by 2015, 395 million more people need access to electricity. There is a strong correlation between electrification and improvement in the United Nations’ Human Development Index.”
    — International Energy Agency, Coal Industry Advisory Board
  • “Access to electricity is strongly correlated with every measurable indicator of human development”
    — Berkeley Science Review, 2008

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