Powder River Basin Coal-Mining Lease Upheld by Court

The U.S. Court of Appeals in Washington rejected a bid by environmental groups to block plans by the U.S. Bureau of Land Management to lease federal tracts in the Wyoming Powder River Basin for coal mining.

Federal regulators properly considered whether more mining by Antelope Coal LLC, a unit of Cloud Peak Energy Inc. (CLD), would affect local pollution levels in the basin or increase the chances of global warming, the appeals court ruled today in rebuffing challenges to the lease.

“We think the BLM acted reasonably” by weighing environmental concerns before agreeing to open lands adjacent to Antelope’s existing mine near Douglas, Wyoming, the unanimous three-judge panel concluded.

The ruling clears the way for Cloud Peak to expand operations at the Antelope facility, one of the nation’s top-producing mines. The company sought permission from the U.S. Interior Department to extract an additional 430 million tons of coal from areas next to the existing site.

Rick Curtsinger, a Cloud Peak spokesman, didn’t immediately return a call for comment on the court’s ruling.

“These are tough cases,” Jeremy Nichols, a spokesman for the environmental group WildEarthGuardians, a plaintiff in the case, said in a telephone interview. “We thought we had a good argument that BLM took some shortcuts, but at the end of the day, the court wasn’t convinced.”

Electrical Power

Cloud Peak, the third-largest U.S. coal producer, sells most of its product to utilities and industrial producers and accounts for 4 percent of all electricity generated in the U.S., according to Hoovers Inc., a unit of Dun & Bradstreet Corp. (DNB), which provides information on U.S. companies.

The lawsuit to block the mining, brought by WildEarthGuardians, the Sierra Club and other environmental groups, was thrown out by a trial court judge, who ruled they couldn’t prove they’d be injured by additional mining operations and therefore lacked the legal right to question the government’s decision on the leases.

The three-judge panel of the appeals court disagreed, finding the environmentalists could show potential injuries from the Antelope mine extension because of the loss of possible recreational opportunities.

Still, the court found BLM regulators weighed the environmental risks of allowing additional mining and properly granted permission for Cloud Peak to lease the lands.

The Antelope mine is located in Wyoming’s Powder River Basin, which contains the largest deposits in the world of low-sulfur subbituminous coal, used for electric power generation.

The case is WildEarthGuardians v. Sally Jewell, Secretary, U.S. Department of the Interior, No. 12-5300, U.S. Court of Appeal for the District of Columbia (Washington).

To contact the reporter on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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