Coal Contract Bids Need Not be Disclosed

MANHATTAN (CN) - Government agencies need not disclose bidding information for multibillion-dollar contracts for Powder River Basin coal-mining to the Natural Resources Defense Council, a federal judge ruled Wednesday.
     The Natural Resources Defense Council did, however, score minor victories in its lawsuit against the Department of the Interior and the Bureau of Land Management, seeking records of the noncompetitive bids in Mountain State contracts.
     Stretching from southeast Montana to northeast Wyoming, the Powder River Basin holds one of the largest coal deposits in the world, supplying more than 40 percent of the coal in the United States.
     The Department of the Interior and the Bureau of Land Management have issued leases involving billions of tons of coal on these lands.
     Since 1990, the bureau has received only one bid on 23 of the 28 lease sales, and the other five had only two bidders. The lack of competition sparked a probe by the Interior Department's inspector general and an audit by the Government Accountability Office.
     An analysis by the Institute for Energy Economics and Financial Analysis, a Cambridge, Mass.-based think tank, found that single-bidder sales of coal-mining rights may have cost taxpayers as much as $28.9 billion over the past 30 years, the Washington Post reported.
     That institute did not immediately respond to a request for comment.
     In its original request, the NRDC sought "all information and analysis documents used to appraise" each of the Powder River Basin tracts and Interior Department "guidance, handbooks, manuals or similar documents with information on estimating the value of coal tracts."
     Releasing redacted copies of four reports, the government said that the censored sections included the bidding companies' confidential information, and said that it also had to withhold economic analysis that could harm its ability to maximize releases from future sales.
     U.S. District Judge Paul Engelmayer agreed with that reasoning in a 50-page opinion.
     "The record convincingly establishes, and the parties do not dispute, that in most coal leases in the Powder River Basin, the applicant's only competition is the government's internal estimate of fair market value," the opinion states.
     Engelmayer found that the bureau "uses a common methodology for determining fair market and that its assessment of fair market value in connection with one tract draws significantly on fair market value estimates of, and data from, numerous other coal tracts."
     "Under these circumstances, disclosure of historical bidding information with respect to tracts in the Powder River Basin would enable a coal company to derive, or come unacceptably close to deriving, the number it must beat in order to lease the next tract for mining," the opinion states.
     Engelmayer ruled that disclosing the information "would injure the government's - and thereby the public's - valid interest in maximizing the price obtained for leasing its choice land."
     However, the NRDC overcame two other exemptions that the government claimed: one protecting interagency documents and another involving geological and geophysical information and data.
     The latter victory will allow the environmental group to see geologic reports that the government claimed contained figures derived from "private drilling holes."
     It is unclear what, if any, information will be revealed of the interagency records, and how much of this data overlaps with the government's standing exemption.