BILLINGS, Mont. (AP) — U.S. officials in the coming days are set to hold the government's biggest coal sales in more than a decade, offering 600 million tons from publicly owned reserves next to strip mines in Montana and Wyoming.
The sales are a signature piece of President Donald Trump's ambitions for companies to dig more coal from federal lands and burn it for electricity. Yet most power plants served by those mines plan to quit burning coal altogether
within 10 years, an Associated Press data analysis shows.
Three other mines poised for expansions or new leases under Trump also face declining demand as power plants use less of their coal and in some cases shut down, according to data from the U.S. Energy Information Administration and the nonprofit Global Energy Monitor.
Those market realities raise a fundamental question about the Republican administration's push to revive a heavily polluting industry that long has been in decline: Who's going to buy all that coal?
The question looms over the administration's enthusiastic embrace of coal, a leading contributor to climate change. It also shows the uncertainty inherent in inserting those policies into markets where energy-producing customers make long-term decisions with massive implications, not just for their own viability but for the future of the planet, in an ever-shifting political landscape.
The upcoming lease sales in Montana and Wyoming are in the Powder River Basin, home to the most productive U.S. coal fields.
Officials say they will go forward beginning Monday despite the government shutdown. The administration exempted from furlough those workers who process fossil fuel permits and leases.
Democratic President Joe Biden last year acted to block future coal leases in the region, citing their potential to make climate change worse. Burning the coal from the two leases being sold in coming days would generate more than 1 billion tons of planet-warming carbon dioxide, according to a Department of Energy formula.
Trump rejected climate change as a “con job” during a Sept. 23 speech to the U.N. General Assembly, an assessment that puts him at odds with scientists. He praised coal as “beautiful" and boasted about the abundance of U.S. supplies while deriding solar and wind power. Administration officials said Wednesday that they were canceling $8 billion in grants for clean energy projects in 16 states won by Democrat Kamala Harris in the 2024 presidential election.
In response to an order from Trump on his first day in office in January, coal lease sales that had been shelved or stalled were revived and rushed to approval, with considerations of greenhouse gas emissions dismissed. Administration officials have advanced coal mine expansions and lease sales in Utah, North Dakota, Tennessee and Alabama, in addition to Montana and Wyoming.
Interior Secretary Doug Burgum said Monday that the administration is opening more than 20,000 square miles (52,000 square kilometers) of federal lands to mining. That is an area bigger than New Hampshire and Vermont combined.
The administration also sharply reduced royalty rates for coal from federal lands, ordered a coal-fired power plant in Michigan to stay open past planned retirement dates and pledged $625 million to recommission or modernize coal plants amid growing electricity demand from artificial intelligence and data centers.
“We're putting American miners back to work,” Burgum said, flanked by coal miners and Republican politicians. “We've got a demand curve coming at us in terms of the demand for electricity that is literally going through the roof.”
The AP's finding that power plants served by mines on public lands are burning less coal reflects an industrywide decline that began in 2007.
Energy experts and economists were not surprised. They expressed doubt that coal would ever reclaim dominance in the power sector. Interior Department officials did not respond to questions about future demand for coal from public lands.
But it will take time for more electricity from planned natural gas and solar projects to come online. That means Trump's actions could give a short-term bump to coal, said Umed Paliwal, an expert in electricity markets at Lawrence Berkeley National Laboratory.
“Eventually coal will get pushed out of the market,” Paliwal said. “The economics will just eat the coal generation over time.”
The coal sales in Montana and Wyoming were requested by Navajo Nation-owned company. The Navajo Transitional Energy Co. (NTEC) has been one of the largest industry players since buying several major mines in the Powder River Basin during a 2019 bankruptcy auction. Those mines supply 34 power plants in 19 states.
Twenty-one of the plants are scheduled to stop burning coal in the next decade. They include all five plants using coal from NTEC's Spring Creek mine in Montana.
In filings with federal officials, the company said the fair market value of 167 million tons of federal coal next to the Spring Creek mine was just over $126,000.
That is less than one-tenth of a penny per ton, a fraction of what coal brought in its heyday. By comparison, the last large-scale lease sale in the Powder River Basin, also for 167 million tons of coal, drew a bid of $35 million in 2013. Federal officials rejected that as too low.
NTEC said the low value was supported by prior government reviews predicting fewer buyers for coal. The company said taxpayers would benefit in future years from royalties on any coal mined.
“The market for coal will decline significantly over the next two decades. There are fewer coal mines expanding their reserves, there are fewer buyers of thermal coal and there are more regulatory constraints,” the company said.
In central Wyoming on Wednesday, the government will sell 440 million tons of coal next to NTEC’s Antelope Mine. Just over half of the 29 power plants served by the mine are scheduled to stop burning coal by 2035.
Among them is the Rawhide plant in northern Colorado. It is due to quit coal in 2029 but will keep making electricity with natural gas and 30 megawatts of solar panels.
The largest U.S. coal company has offered a more optimistic take on coal's future. Because new nuclear and gas plants are years away, Peabody Energy suggested in September that demand for coal in the U.S. could increase 250 million tons annually — up almost 50% from current volumes.
Peabody’s projection was based on the premise that existing power plants can burn more coal. That amount, known as plant capacity, dropped by about half in recent years.
"U.S. coal is clearly in comeback mode," Peabody's president, James Grech, said in a recent conference call with analysts. “The U.S. has more energy in its coal reserves than any nation has in any one energy source.”
No large coal power plants have come online in the U.S. since 2013. Most existing plants are 40 years old or older. Money pledged by the administration to refurbish older plants will not go very far given that a single boiler component at a plant can cost $25 million to replace, said Nikhil Kumar with GridLab, an energy consulting group.
That leads back to the question of who will buy the coal.
“I don't see where you get all this coal consumed at remaining facilities," Kumar said.
___
Gruver reported from Wellington, Colorado. Associated Press writer Susan Montoya Bryan in Albuquerque, New Mexico, contributed to this report.
