Congressman Blasts The Coal Industry: ‘American Taxpayers Are Being Ripped Off’

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Powerful coal industry executives and lobbyists this week faced a withering round of criticism from regulators and congressional leaders for self-dealing business practices, refusing to disclose tax information, and shielding data about royalty payments from public scrutiny.

The criticism peaked at two congressional hearings Tuesday, the first of which featured former Montana Director of Revenue Dan Bucks, who has long criticized the coal industry for gaming the system to avoid royalties owed to taxpayers and shielding its finances from the public.

“Coal companies have the true facts within their own records and it’s all secret, and secret to the American people,” Bucks said in response to a question from Representative Matt Cartwright (D-PA) on transparency and available data from the industry.

Cartwright also said that coal operators are selling to subsidiary companies in what he described as a “sweetheart deal.”

“American taxpayers are being ripped off. It’s as simple as that.” Cartwright said in the hearing, which was called by a subcommittee of the House Energy Committee. He then went on to explain his bill, the Coal Royalties Fairness and Communities Investment Act, which would reform the coal program by “closing this loophole and ensuring the federal government receives fair compensation for the coal extracted from public lands.”

Coal companies have endured much critique this year for selling coal to their subsidiaries at artificially low prices to avoid royalty payments owed to American taxpayers. In response, Secretary of Interior Sally Jewell called for an open and honest conversation about the federal coal program, and launched a series of listening sessions in Washington, D.C. and across the West where hundreds of decision-makers, sportsmen’s groups, taxpayer watchdogs, and interested citizens called for a fair share of this publicly held resource.

At the other hearing, Janice Schneider, Assistant Secretary for Land and Minerals Management for the Department of Interior, refuted false claims from the industry on jobs. In October, the National Mining Association (NMA) released a report they commissioned claiming as many as 78,000 direct mining jobs could be lost by implementing a rule to protect streams and waterways from mining waste.

Schneider cited the Regulatory Impact Analysis in her testimony to the House Oversight Committee’s Subcommittee on the Interior, stating that the rule would result in a loss of about 260 coal mining jobs, and an addition of about 250 compliance jobs, essentially offsetting any net loss.

When asked about the NMA’s job estimates, Schneider debunked the report:

“Those numbers are not correct. The high end of those numbers are about the entire job numbers of this entire industry nationwide. This rule will not shut down the mining industry in the United States,” she said. “The real issue happening in the coal industry right now is an economic one. It is the abundance of natural gas, it is low price of natural gas, it is fuel switching by utilities to natural gas. That is decreasing the demand for coal and that is what is driving job losses in coal country.”

While coal industry lobbyists and some members of Congress attempted to prop up these discredited job numbers, consumer advocates continued to call for increased transparency.

Coal industry giant Cloud Peak Energy received a letter this week calling on the company to open its books and demonstrate that it is paying a fair share to U.S. taxpayers. The letter, lead by Public Citizen, follows on a growing body of evidence that Cloud Peak Energy and other major coal are selling coal to subsidiary companies at below market prices to dodge royalties owed to the American public.

“Coal companies have been gaming the system for years,” said Tyson Slocum, director of Public Citizen’s Energy Program. “Releasing this data will help Americans ensure that the sale of publicly owned coal is done in a way that delivers a fair return to all U.S. taxpayers and the states where the coal is produced.”

A new criticism of the coal industry also surfaced this week. The Extractive Industries Transparency Initiative (EITI) -– a joint effort by more than 40 countries to improve the transparency of oil, gas, and mining activities -– released data demonstrating that many of the top oil, gas, and coal companies in the U.S. are failing to disclose their federal tax information. Among those withholding this data are Alpha Natural Resources, Arch Coal, and Peabody Energy – three of the top four largest coal companies in the United States. Also on the list are oil and gas giants ExxonMobil, Chevron, and ConocoPhillips.

Nicole Gentile is the Director of Campaigns for the Public Lands Project at the Center for American Progress. You can follow her on Twitter at @nicolegentile.

UPDATE DEC 10, 2015 6:05 PM

A previous version of this post said the letter sent by Public Citizen was sent to Peabody Energy; it was sent to Cloud Peak. ThinkProgress regrets the error.

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