Republicans on a House energy subcommittee held a love-in for western coal Tuesday, calling on the Obama administration to increase production from federal lands in Wyoming and Montana despite evidence that the Department of Interior’s coal program is a giveaway to private industry that cheats taxpayers out of a fair return for the public resource.
Without even a mention of coal’s role in driving climate change (28 percent of U.S. carbon emissions), or its well documented impacts on public health and the environment ($345 billion a year in hidden costs, according to a Harvard study), Rep. Doug Lamborn (R-CO) and his colleagues on the energy and mineral resources subcommittee of the House Committee on Natural Resources couldn’t say enough good things about the dirty fuel.
“The United States has the world’s largest coal reserves,” Lamborn said. “It would be the height of folly to throw this resource away.”
“What is needed is a war on unemployment, not a war on coal,” added Rep. Steve Daines (R-Mont.), accusing the president of “declaring war on American jobs and American consumers” through his recently announced program to attack climate change.
The focus of the hearing was on coal in the Powder River Basin of northeast Wyoming and southeast Montana, which supplies about 40 percent of the coal mined in the U.S. Nearly all of that production in the two states is from federal lands, and is overseen by the Bureau of Land Management in the Interior Department.
The federal coal program has a long history of problems and scandal, including a loss of $100 million in federal revenue in the early 1980’s. Once again it is under scrutiny, by the Interior Department’s inspector general office, the Government Accountability Office, and outside analysts.
An inspector general’s report released last month, for example, found that the Bureau of Land Management had failed in its statutory responsibility to competitively lease coal tracts and to guarantee the U.S. Treasury receives fair market value for public coal. In a sample of leases, the review found taxpayers had been shortchanged $62 million. Last year, an inquiry by the Institute for Energy Economics and Financial Analysis estimated that lost revenues since the early 1980’s totaled almost $30 billion.
The inspector general’s report found a program rigged in favor of industry. Not only does the BLM fail to independently verify the value of the coal resources it is selling – a determination based on data supplied by coal companies themselves –but it does not take into account soaring demand and prices for coal exports to other nations, which have doubled in recent years. Further, 80 percent of the leases sold in the last two decades received just one bid.
Despite its rhetorical commitment to the fight against global warming, the Obama administration has sold coal leases on about 2 billion tons of coal the past two years, and leases for nearly another 4 billion tons are in the pipeline.