No sweetheart deals for coal!

American taxpayers deserve a fair share of revenue from publicly owned coal, which accounts for about 40% of coal mined annually in the nation. Yet, for decades, the Department of Interior has chronically undervalued our public coal, which has resulted in billions in lost revenue to state and federal governments. The royalty rates and other fees paid on this taxpayer-owned resource are woefully out of date and in dire need of increase.

The Obama administration is hosting a listening session in five cities in July and August to get feedback from American citizens about how they can modernize the federal coal program.

The royalty rates and other fees paid on this taxpayer-owned resource are woefully out of date and in dire need of increase.

To compound the problem, recent investigations show that the Department of Interior even lets coal companies sell coal to their own subsidiaries at artificially low prices to avoid higher royalty payments owed to taxpayers. This 'insider-trading' scheme exacerbates an already low return to the American public, which owns this resource.

The Obama administration is considering updating these nearly 100-year-old royalty rates and reforming the management of coal lease sales, but before they can act, officials need to hear that the public wants a fair share for our public resources!

Export subsidies
Taxpayers have lost as much as $28 billion due to bad management of the public’s coal according to a report by the Institute for Energy Economics and Financial Analysis.  The undervaluation of federal coal, done to promote domestic energy security, has resulted in pressure to export coal at a rate that is publicly subsidized, to benefit foreign economic competitors.

Federal coal a leading threat to climate change
The federal coal leasing program will play a critical role in the Department of Interior’s commitment to fighting climate change. With at least 15 billion tons of carbon pollution possible from the leasing, mining, and burning of  federally-owned coal in the next two decades, the Department’s coal leasing program stands in direct opposition to Administration’s climate agenda. Aside from these global impacts, federal coal leasing and mining continues to impact land, air, water, and wildlife throughout the American West. It’s time for the Department of Interior to start accounting for its contribution to climate change and environmental and community impacts and more importantly to start addressing them in its federal coal program.

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Publicly owned coal accounts for about 40% of coal mined each year in the United States.

Yet, for decades, the Department of Interior has chronically undervalued our public coal, which has resulted in billions of dollars in lost revenue to state and federal governments. Federal coal management of this taxpayer-owned resource is woefully out of date.

Tell Secretary Sally Jewell to close loopholes, increase royalties, and do a better job of setting fair market value and minimum bids for federal coal.


 

More Information

 

EcoFlight photographs of Powder River Basin coal mines

 

Taxpayers' Loss of Revenues:

Federal Coal Leasing: Fair Market Value and a Fair Return for the American Taxpayer

Finds that the predominant leasing process currently used by the Bureau of Land Management, the agency within the Department of the Interior that manages the federal coal leasing program, does not obtain fair market value for taxpayers.
Federal Coal Leasing: End Sweetheart Deals for CoalAmerican taxpayers deserve a fair share of revenuefrom publicly owned coal, which accounts forabout 40% of coal mined every year in the U.S.Yet, for decades, the Department of Interior has chronically undervalued our public coal, costing billions in lost revenue to state and federal taxpayers.

Office of Natural Resources Revenue calculates the amount of royalties coal companies owe by multiplying the royalty rate (e.g. 12.5 percent) by the sale value of the coal. Recent reports have suggested that coal companies are selling coal to subsidiaries of affiliate companies in order to lower the sale price and the amount of royalties owed.

Royalty Loopholes:

Federal Coal Royalty Valuation

Reviews problems with the current federal royalty system, estimates current effective royalty rates, and offers several reform options.
Fix Federal Coal Royalties: Close the Loophole

Fix BLM Coal Sales: End Single-Bidder Auctions

Coal Program Giveaway over the Past 3 Decades:

The Great Giveaway Examines the coal‐leasing fair market value appraisal program of the United States Department of Interior Bureau of Land Management.

Inadequate Land Use Planning:

Conservation groups representing millions of citizens have called on BLM Director Neil Kornze to re-do Resource Management Plans in the Powder River Basin that forward billions of tons of coal to the be eligible for leasing or exchanges.  The plans rely on stale, out  of date data and fail to address the growing trend toward exports and the impacts of changing markets on transportation and on value of public coal. Several organizations filed protests of the recent Resource Management Plans in the Powder River Basin.
 

Proposed Resource Management Plans for the Buffalo, Wyoming and Miles City, Montana Field Offices


Coal Leasing and Climate Change:

How the federal coal leasing program undermines President Obama's Climate Plan.
Powder River Basin coal is a major contributor to U.S. climate change and carbon pollution--what is less apparent are the real economic and social costs of burning this coal—and the true cost borne by U.S. taxpayers, which has long been overlooked by policymakers.

Failure to Keep Pace with Reclamation on Public Coal:

Undermined Promise II Finds that coal companies have fallen far behind in reclaiming mines, and, with the coal industry on shaky financial ground, the public faces increasing liability for massive reclamation costs of more than $3.5 billion and damage to landscapes, wildlife and crucial water supplies.

Unfair Market Value of Coal for Export:

Unfair Market Value How coal companies operating in the Western U.S. have bought federally owned coal for pennies per ton, and are now reselling that coal on international markets for hundreds of times more than they bought it for.
Updates WORC's July 2012 report, Heavy Traffic Ahead, and reevaluates the anticipated increase in coal train traffic in light of the current proposals for new or expanded port facilities in the Pacific Northwest.

 

© 2015. Western Organization of Resource Councils.
Background Photo courtesy of Ecoflight