Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
CASPER, Wyo. (AP) — A continued decline in coal leasing could tighten up what has been one of Wyoming's major sources for school construction: fees paid by coal companies to lease the state's vast reserves of federal coal.
The fees paid for the right to mine in the Powder River Basin have financed more than $1 billion in school construction in Wyoming over the past decade.
Leasing has dwindled, however, as demand for coal has declined. Last year, back-to-back unsuccessful bids on coal-rich lands resulted in no new coal leases in the state, the Casper Star-Tribune reported (http://bit.ly/1nRAMAz).
Economists project Wyoming's share of federal coal-leasing fees known as coal lease bonuses could hit zero in 2018.
If significant new leasing doesn't happen soon, Wyoming will need to change how it pays for new schools and school renovations, said Sen. Bill Landen, R-Casper.
"As it stands today, it doesn't look good," said Landen, chairman of the Legislature's Select Committee on School Facilities.
Last year, the U.S. Bureau of Land Management held two coal auctions but didn't sell any coal. One auction Aug. 21 offered 149 million tons of reserves and no companies bid, which was unprecedented for a BLM lease sale in Wyoming.
A Sept. 18 auction drew a lone bid that the BLM rejected as too low.
Coal mining companies have cited a weakened market for coal and an uncertain political and regulatory environment surrounding coal-fired electricity in holding off on pursuing new tracts to expand their vast surface mines in northeast Wyoming.
Typically, after accepting a bid, the BLM sends about half the lease bonus companies pay back to the state in equal installments over five years, said Wenlin Liu, principal economist at the Wyoming Center for Business and Economic Analysis.
In recent years, coal bonus revenue has delivered as much as $240 million to Wyoming in a single year. Projections show the amount hovering around $220 million a year before dropping to $120 million in 2017 and zero in 2018.
"It's been sort of a sacred cow with this coal lease bonus money," said Sen. Eli Bebout, R-Riverton, a co-chairman of the Joint Appropriations Committee. "But if that goes away, the schools would be competing with other capital needs of the state."
Many lawmakers aren't alarmed, however. Regardless of whether coal lease bonuses shift, the state has sufficient revenue to cover school construction, said Sen. Chris Rothfuss, D-Laramie.
"There's no reason to panic," Rothfuss said. "We will identify an alternate source of funding."
___
Information from: Casper (Wyo.) Star-Tribune, http://www.trib.com
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
