by Justin Guay, Ashish Fernandes, and Chaitanya Kumar
A $33 billion “Coal-Gate” scandal is rocking the Indian government. This “mother of all scams” created a windfall for private developers who secured public resources at rock bottom prices.
As a beleaguered Prime Minister Singh takes to defending this egregious allocation of public resources, it’s important to recognize that Coal-Gate isn’t just happening in India. It’s happening everywhere, including the U.S., and it must be stopped.
But you know where else this epic scandal occurs? On Western public lands in the Powder River Basin in the United States. A few months back, environmental groups sent a letter to the U.S. Bureau of Land Management requesting that they cease “auctioning” public assets to a single bidder. The scale of this coal scam is “only” $28.9 billion — a few billion dollars less corrupt than India’s. But who’s counting?
The truth, however, is that the situation in the U.S. is worse. We consider an “auction” to consist of one participant – which then ends up getting public resources at a firesale price of $1 per ton. (They then turn around and sell that coal to our Indian friends at prices as high as $100/ton). Indians at least sold coal for $3/ton and were honest enough to not call it a “bidding process.”
Sometimes the participating corporate players received U.S. financial support for tainted projects. For instance, the 4,000 megawatt Reliance-developed Sasan coal plant was funded by the U.S. Export Import Bank and received $5 billion in profit as a part of coal-gate — something the U.S. Export Import Bank due diligence unsurprisingly failed to show. But for the U.S. Export Import Bank that’s neither here nor there — it’s actually everywhere.
U.S. involvement aside, Tata, Reliance, and Adani are in the midst of an even more brazen scam. Despite receiving land and coal for next to nothing as hundreds of millions suffered in the great Indian blackout, they were not busy building projects and delivering power — they were busy publicly decrying “environmental hurdles” and bureaucratic delay as the cause of the coal crisis.
While they were attempting to gut environmental standards, these same companies were busy seeking a bailout for “flagship” projects like Tata Mundra and Krishnapatnam.
But why would “dirt cheap coal” need a bailout? Because cheap coal is dead. This is why Tata, Reliance, and Adani desperately need a tariff revision so they can raise rates on average citizens and keep their profits up.
So as the coal-gate scam explodes, these players are asking for a bailout. The political timing would be laughable if regulators were prepared to stand up for the average citizen, not industry. Instead, just like Prime Minister Singh, they are falling in line to defend these “barons of industry” by securing their requested bailout.
Our Indian friends and colleagues are rightly angry. Really angry. Giving away polluting coal must stop. Better yet, we must keep coal in the ground entirely.
Justin Guay is with the Sierra Club, Ashish Fernandes is with Greenpeace India, and Chaitanya Kumar is with 350.org. This piece was originally published at the Sierra Club’s Compass blog and was reprinted with permission.
On the 10th of November, thousands of people will come together for a day of action across India protest her dependence on coal and highlight the decentralized alternate energy solutions already available.
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This tradition goes back to the railroad land grants in the 19th century. The railroads got title to the land as a way to encourage building the transcontinental railroad, then turned around and sold or leased the land to clearcutters and miners.
All of those libertarian cowboys out west love cheap grazing and mining rights, not to mention basically free trees from our national forests. The result has been liquidation of our remaining primary forests in the Northwest, forcing us to do the same thing in Canada for quality lumber and cheap pulp.
The greatest costs of coal are land access and health care costs. Both are underwritten by the Federal Government. Republicans might listen to the argument that we need a true market here… Nahh.
It’s just capitalist ‘primitive accumulation’ at work. You could call it theft, brigandage, larceny-whatever. The object is always the same. To steal from others what is, by right and justice, the common wealth of all. It’s pleonexia, the insatiable desire to possess that which, by right, belongs to others. It is insatiable, like cancer.
Excellent post.
Dr.A.Jagadeeh Nellore(AP),India
E-mail: anumakonda.jagadeesh@gmail.com
“We consider an “auction” to consist of one participant — which then ends up getting public resources at a firesale price of $1 per ton.”
And yet, Utah citizen Tim DeChristopher was tried, convicted and sentenced to two years in prison for bidding $1.8 million which he did not have* to protest oil and gas leasing practices.
Wikipedia:
http://en.wikipedia.org/wiki/Tim_DeChristopher
* The article says he had raised enough for an initial payment.
Yes, I think this shows a double standard of justice. But what else is new?
Boulder’s Leslie Glustrom reports similar — and worse — happening in Colorado:
BLM announcement and other links describing the Sage Creek coal lease below.
THIS IS BEYOND OUTRAGEOUS!!!
We were just robbed. Next we’ll be abused by the burning of this coal!!
This is probably some of the best coal left on the planet. It is over 12,000 BTU/pound. (Wyoming coal is 8,800 BTU/pound–and below.)
Peabody is paying 25 cents/ton ($800,000/3.2 million tons =$0.25/ton !!!!) for this premium quality coal!!
Recent coal leases in Wyoming (e.g. North Porcupine) sold for about $1.10/ton. That was outrageous in itself and it was for much lower quality coal!
Peabody intends to export some of what was our coal and can expect a large profit margin. Buy it for 25 cents ton and sell it for $80-100/ton on the export market….
http://www.peabodyenergy.com/Investor-News-Release-Details.aspx?nr=1715277
Peabody will also sell the coal to Xcel at over $2/MMBTU (which is a lot) to burn in the Hayden coal plant west of Steamboat, Colorado. Xcel (and other utility) ratepayers will pay a premium to buy back what was our coal and then have it burned to create CO2, SO2, NOx, pariculates and mercury, arsenic and lead emissions etc which will contribute to health problems and fires, drought and extreme weather events–all of which we pay for one way or another. The attached Arigoni Testimonies from Docket 11A-917E at the Colorado PUC describes Xcel’s deal with Peabody to buy this coal. Exhibit SA-2 is the updated projection of prices for the coal (which are already being surpassed….). With coal costs above $2/MMBTU it is very questionable whether the Hayden coal plant will be a (truly) cost-effective resource for long.
Once again, the coal companies are allowed to privatize the profits while socializing the costs!
Outrage is the appropriate emotion….
That is (or was) the public’s coal!!!
http://www.blm.gov/co/st/en/BLM_Information/newsroom/2012/blm_competitive_coal0.html
The obvious corollary is to list Peabody’s political ‘donations’-that is the ábove board ones for which there is a record.
It’s amazing that $3/ton is scandalous in India, when it’s three times the typical bonus bid in an American BLM auction, and twenty times the Arch Coal’s successful Otter Creek bid in Montana. Maybe the royalty policies differ, but really they’re all a joke.