Wyoming could lose another $1.5M in AML, thanks to sequestration

BLM says it will issue fewer leases for oil, natural gas and coal

— February 21, 2013
— UPDATED: February 22, 2013

Wyoming is set to lose another $1.5 million in Abandoned Mine Land funds, this time due to the impending federal “sequestration” set to begin March 1 — the drastic fiscal-pact struck just a couple of months ago that was supposed to compel partisan politicians in Washington D.C. to finally agree on a budget direction.

But as Sen. Mike Enzi (R-Wyoming) promised recently, the GOP isn’t going to budge on a budget compromise that includes President Obama’s increase in revenue. “Sequestration is going to happen. The plans that are being offered won’t pass,” Enzi said.

Additionally, the U.S. Bureau of Land Management announced on Friday that the automatic cuts will prevent the agency from issuing approximately 300 onshore oil and gas leases, and force delays in coal leasing.

The U.S. Department of Interior’s Office of Surface Mining Reclamation and Enforcement announced the pending 10 percent cut in AML distributions this week as part of preparations for sequestration. Wyoming is among 28 coal-producing states and tribes facing the 10 percent cut in AML distribution this year.

The OSM press release stated:

“The hold back of ten percent in anticipation of the sequester will have impacts on communities across the Nation, the American people, and the environment. The reduction in AML funding means that about 50 abandoned mine land projects will not be reclaimed. This will impact an estimated 22,500 citizens who will continue to be exposed to mine-related hazards such as open mine shafts and portals, mine fires, dangerous highwalls, landslides, and mine subsidence. More than 1,800 acres of polluted or degraded mine lands will not be cleaned up, and over $4.3 million will not be set aside for cleanup of mine-related water pollution. There are economic impacts as well; the reduction in funds means a reduction in contracts and jobs in the local community.”

Keith Guille, spokesman for the Wyoming Department of Environmental Quality, told WyoFile that Wyoming was set to receive $15 million in AML funds this year, but will receive $13.5 million instead — if the sequestration is set in motion and OSM follows through with its cost-cutting plans. “So it will impact the 2014 construction season,” said Guille. “That certainly does impact the bottom line for a lot of construction, and that means jobs.”

That $15 million appropriation represents a cap set on AML distributions last year — itself a massive cut in AML funding that is likely to cost Wyoming some $700 million over time. As the biggest contributor to AML funds, Wyoming has felt justified in being the largest recipient of AML funds. So the whittling away at AML appropriations is something Wyoming leaders have taken personally.

Yet federal officials aren’t mincing words when it comes to the ramifications of sequestration on core services related to public lands. In a statement this morning, the BLM wrote, “Local communities and businesses that rely on recreation to support their livelihood will face a loss of income from reduced visitation to the public lands as the BLM will be forced to scale back services. The BLM will also be limited in its ability to sustain a full complement of seasonal employees needed for firefighting, law enforcement and visitor services.”

While speaking to a small crowd of people in Casper earlier this week, Sen. Enzi speculated that federal agencies will respond to the sequester by cutting popular programs rather than inefficient programs, intending to generate public opposition to the sequester.

Per capita, no other state receives more federal dollars, perhaps making Wyoming particularly vulnerable when it comes to agriculture and, perhaps the energy industry. Industry has complained in recent years that about a half-dozen natural gas drilling proposals across the state have been delayed in the permitting process — some more than five years. If sequestration happens, BLM officials say furloughs and other cuts will likely inhibit the process even more.

For more on AML issues in Wyoming, read this WyoFile feature:
— Feds can restrict flow of mineral revenue to Wyoming, September 2012

And read this related post:
— There’s $428M in unfunded abandoned mine reclamation work in Wyoming, February, 2013

— Dustin Bleizeffer is WyoFile editor-in-chief, and a former Powder River Basin coal miner. You can reach him at (307) 577-6069 or email dustin@wyofile.com. Follow Dustin on Twitter at @DBleizeffer

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