The Bureau of Land Management Is Ripping Us Off On Federal Coal Sales

The federal Bureau of Land Management is costing taxpayers a bundle by undervaluing the public coal it sells to industry, an Interior Department watchdog has concluded in a new report.

The review, by the Department of Interior’s Inspector General, found that the bureau that oversees energy development on hundreds of millions of acres of public land had cost taxpayers at least $62 million by selling recent coal leases on the cheap. Most federal coal is mined in the Powder River Basin region of northeast Wyoming and southeast Montana, where the BLM has leased sales of more than 2 billion tons of coal since 2011.

“We found weaknesses in the current coal sale process that could put the government at risk of not receiving the full, fair market value for the leases,” the IG said, according to a report by Reuters. “Even a 1-cent-per-ton undervaluation in the [fair market value] calculation could result in a $3 million revenue loss.”

The Interior Department is also conducting a second investigation into whether coal producers are using affiliate companies in selling coal for exports to Asian markets, thereby paying far lower royalties to the Treasury. Prices on coal sold on the export market are generally far higher than the cost producers pay for federal coal.

Today’s report determines that officials at the BLM are also failing to properly value the Powder River Basin coal that is eventually sold on export markets, according to the Reuters report.

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