The US Gov. Just Sold 721 Million Tons of Coal for Literally Cheaper than Dirt
Dirt has long held the distinction of upholding the very standard of worthlessness. It is enshrined in our vernacular as such: When something, say, Herman Cain 2012 campaign memorabilia, is said to be "cheaper than dirt," that thing is being hyperbolically referred to as available at a surprisingly low cost. It is almost never actually cheaper than dirt.
But coal is. At least, if you buy it from the United States government, and mine it on public land. You see, the Bureau of Land Management just held a giant coal "auction" for 721 million tons of coal that was for all intents and purposes a sham—the only bidder was Peabody, a company that also had the privilege of setting the price it wanted to pay. Peabody decided that it wanted to pay $1.10 per ton, and the BLM said, "You got it, buddy."
That, NRDC senior climate advocate Theo Spenser will tell you, is literally cheaper than dirt:
According to costhelper.com, and ask.com, a ton of dirt costs between $8-$30 a cubic yard, and a cubic yard weighs between 2,000 and 2,700 pounds.On the free market, a ton of coal costs $8-14. Overseas, it's worth something like $80-122.
Yet the largest privately-held coal company in the world, St. Louis-based Peabody Energy, was able to pick up 721 million tons of coal for about $1.10 a ton today under a scandalous lease program operated by the Department of Interior’s Bureau of Land Management (BLM), at cost of $1.2 billion in lost taxpayer revenue
Essentially, the BLM gave Peabody a huge, carbon-rich handout. Why? Is the pleasantly named coal company a struggling, scrappy upstart that needs government help to make ends meet? Nope. It's the largest private sector coal company in the entire world. And the sham deal, which is outrageous but probably legal (federal investigators are actually looking into that matter right now), just cost taxpayers $1.2 billion in lost revenues.
That's more than twice the amount of Solyndra. It's a massive, one-time giveaway to a company that hopes to export the coal to China. That's right; taxpayers have in effect spent over a billion dollars to help the world's largest coal conglomerate to ship piles of the stuff overseas.
The ridiculous coal-leasing system that allowed this coal grab to transpire is now a big fat target for environmental and progressive groups. Orgs like Greenpeace and the NRDC are rallying against it, and Credo is doing its petition thing. And for good reason—if there's one thing our government should most certainly not be in the business of selling, it's cheap coal.