Bipartisan Pair Of Senators Calls For Investigation Into U.S. Taxpayer Losses From Coal Exports

by Jessica Goad

Senators Ron Wyden (D-OR) and Lisa Murkowski (R-AK) have called on Secretary of the Interior Ken Salazar to investigate if U.S. taxpayers are getting shortchanged by companies mining coal from public lands and exporting the resource to other countries.

That’s according to a report from Reuters today.

Senator Wyden is Chairman of the Senate’s Energy and Natural Resources Committee, and Senator Murkowski is the ranking member.

Wyden and Murkowski said they were concerned that coal companies are not paying high enough royalties on coal mined on public lands.  According to another Reuters article in December, companies are valuing coal at lower domestic prices rather than higher international prices so they “can dodge the larger royalty payout when mining federal land.”

If any violations of the law have occurred, companies should be required to cure any gap in royalty payments and, if misconduct has occurred, civil penalties should be levied,” reads Wyden and Murkowsi’s letter.

Approximately 43 percent of the coal produced in the U.S. comes from public lands managed by the government and owned by all Americans. Public lands are home to some of the richest coal deposits in the nation, mostly located in Wyoming and Montana’s Powder River Basin.

However, as the use of coal for electricity continues to decrease, coal companies have been eying fast-growing Asian markets as a potential destination for U.S. coal.  In 2011, U.S. coal exports were the highest they have been since 1991, and companies like Arch Coal have predicted that they could be even higher over the next few years.

Shorting royalties isn’t the only way that taxpayers may be losing out. Some have called out the government for carrying out policies on public lands that keep coal cheap, and therefore shortchange American taxpayers.

For example, a report published by financial analyst Tom Sanzillo in July found that the Interior Department has offered coal leases non-competitively in the Powder River Basin rather than putting them up for auction, thus costing taxpayers  as much as $29 billion over the last three decades.

Coal companies can also get leases on public lands extremely cheaply. The highest bid ever received on a federal coal lease in the Powder River Basin was $1.10 per short ton, despite the fact that the coal can be sold for approximately $10 per short ton.

In a separate piece on coal exports, Reuters noted that these government policies raise “questions about whether taxpayers are essentially helping Asian economies save on energy costs.”

Coal exports are another emerging environmental fight. Currently, five coal export terminals are proposed in Oregon and Washington — projects that have been strongly opposed by everyone from environmentalists to farmers and ranchers to local officials.

The Army Corps of Engineers, along with state and local agencies, recently started holding preliminary hearings on how to assess the construction of the terminals and determine whether or not there should be a cumulative analysis on the new infrastructure built across the West to accommodate the vastly increased amounts of coal.

Wyden and Murkowski aren’t the only lawmakers paying attention to the growing issues around coal exports.  Rep. Ed Markey (D-MA), the ranking member on the House Committee on Natural Resources, asked the Government Accountability Office in April to review the government’s program and policies for overseeing coal mined on public lands.

Jessica is the Manager of Research and Outreach for the Public Lands Project at the Center for American Progress Action Fund.

10 Responses to Bipartisan Pair Of Senators Calls For Investigation Into U.S. Taxpayer Losses From Coal Exports

  1. Barbara WAtts says:

    While it is a “good” idea, probably, to keep climate disruption out of this, the costs to taxpayers and other industries resulting from dealing with climate change, really are part of the accounting.

  2. Superman1 says:

    Lewis Cleverdon,

    In your response to my post on the fiscal cliff/climate cliff thread, you wrote: “Bush then reneged on Kyoto by refusing to send it for ratification, and he and Cheyney launched the policy of a Brinkmanship of Inaction with China, the rival for US global dominance.” The existence of such a policy may or may not be true, but it’s not the central roadblock to mitigation. Cheney could have been a climate hawk, and it still would have made little difference. If you believe Kevin Anderson’s projections, and add in a ‘boost’ from the positive feedback mechanisms his models ignore, we have placed enough CO2 in the atmosphere to enter his regime of Extremely Dangerous. If we are to have any chance of avoiding an unimaginable catastrophe, we must institute the most draconian measures. First and foremost is immediate cessation of fossil fuel use. This will crash the global economy far worse than even Anderson suggests, at least for the next three or four decades. How could any politician run on such a platform, or get such actions approved by the Legislature and, more importantly, the electorate? In the recent election, Obama didn’t even discuss climate change, and did all he could do to defend two percent growth. True, Cheney could have made some fiery speeches, and perhaps swayed a few minds. Obama could do the same. My view: the American people are in no way ready to make the kinds of serious sacrifices required to get us over the hump. I’ll address your Albedo Restoration concept in another post.

  3. prokaryotes says:

    “We” are way to busy with shopping, getting the latest gadget, planing the next holiday or buying a new fancy SUV.

    The only thing which wakes people up is when they get flooded several times, or when they have to move because a storm leveled their home or when groundwater is depleted.

    Agent smith

  4. Mulga Mumblebrain says:

    In my opinion the central obsession of Washington elites, and their stooges in the Western puppet-states, is derailing China’s rise. Nothing else comes near this priority in importance. These are creatures who see it as their God-given right to dominate the planet, forever, and they will never accept playing second fiddle to those of a difference race, civilization and worldview. Every venue, including climate negotiations, is used as a battleground against China and any other non-compliant regimes, and that will not change under any circumstances, so climate talks simply cannot succeed.

  5. prokaryotes says:

    Alaska officials urge feds to plug abandoned oil wells

    “From the Alaskan’s perspective this is the absolute height of hypocrisy, when we hold our private operators to the highest of standards and our federal government can not only reject those standards but literally walk away from their responsibilities,” she said.

  6. Superman1 says:

    I’ve often wondered about the use of climate as a warfare tool. If we wanted to go that route, we could provide climate inputs over the Western countries that would have severe impacts in China. That would be far safer than what you or Lewis are suggesting, whereby you think we are engaged in the present climate destruction in order to secure economic and political advantage over China. I have a hard time accepting that, as we would be doing ourselves in at the same time. Our leaders would have no hesitation in making life difficult for other peoples’ grandchildren, or children, but not their own. Doesn’t pass my litmus test.

  7. Shane J. Filomena says:

    Lisa Murkowski (R-AK) is my MOST Treasured Representative, Like Ted Stevens before her, she braves the path of Old School Republican Style of ” For the People, by the People ” not this New Aged nonsense. ( which is why she kicked Electoral tail with a Write-in vote :) )

    Alaskans KNOW the Coal Industry , while useful is WORSE then Big Oil in terms of trying to short change people, we liken them to off the common way Tire shops with excessive price gouging, shoddy work…

    I think this is good that the Nation itself gets a kick in the pants about the many years of favoritism to big business and dee pocketed Lobbyists.

    Alaskans are extremely concerned about the spending of Tax Dollars ( and I will not go into the other issues that boarder coal production ) but it is IMPERATIVE that the Nation itself wake up and smell the burning hole in their pocket from these political Arsonists claiming to be republicans that they elected.

  8. Kim Feil says:

    This whole discussion would not be happening if an adequate CARBON TAX showed that coal is not to be burned period! Also natural gas, which is displacing coal in coal fired plants is NOT solving CO2 issues…
    1) coal is being exported and burnt elsewhere (as evidenced in this article)
    2) adapting to the goal of 2% global warming is not acceptable-it is like walking around with a fever of 98.6 + 2 = 100.6 fever see 39 minutes into this video on this analogy …
    3) methane leaks from NG is worsen warming

  9. Mulga Mumblebrain says:

    The attacks on China and Russia are multi-dimensional. First-strike ‘missile defence’ systems ring both countries. US battle fleets cruise the South and East China seas (imagine the fuss if Chinese fleets cruised the North Atlantic to ‘defend shipping lanes’). Phony subversive ‘NGOs’ are financed in both countries. Compradore expatriates are financed and trained in subversion. The US is set on fomenting trouble between China and its neighbours, and has extended NATO right to Russia’s borders. Need I go on? I forgot the incessant, 100% negative propaganda in the Western MSM directed against both countries. As for climate warfare, we know that the US military has extensively studied it, and puts tens of billions into biowarfare research and exotic projects like HAARP. Targeting just exactly who?

  10. Mulga Mumblebrain says:

    Meanwhile the European emissions trading scheme, that monument to the insatiable Market Moloch, goes from bad to worse, from tragedy to farce.