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.

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The Senate continued debate Monday afternoon on Sen. Robert Menendez’s (D-N.J.) bill repealing $2 billion in tax breaks to Big Oil. The debate has given major recipients of Big Oil money the chance to defend a profitable industry, while it skims even higher profits from record gas prices.

Senate Minority Leader Mitch McConnell, for instance, has the most money of any senator from oil and gas this cycle. He’s the No. 8 recipient in oil and gas career contributions in Congress, taking over $1.15 million during his tenure.

Republicans like McConnell, who said a debate on oil subsidies is a “waste of the public’s time,” used one debunked myth after another yesterday afternoon:

LIE: More Domestic Drilling Would Lower Gas Prices: McConnell claimed Republicans have the “solution” to gas prices while Democrats are lacking. The GOP’s answers include Keystone XL pipeline and drilling, neither of which lower prices.

FACT: More Drilling Increases Big Oil Profits: Experts note that production doesn’t impact gas prices; if it did, our current eight-year high in domestic energy gas prices would mean $2 gas. An Associated Press statistical analysis finds absolutely no support that drilling lowers gas prices. Neither would Keystone XL help Americans at the pump; it would only send prices higher. The pipeline “risks raising prices as much as 20 cents a gallon in the Midwest, Great Plains and Rocky Mountains,” according to a 2010 Canadian report.

LIE: Big Oil Tax Breaks Promote Drilling.: Sen. Lisa Murkowski (R-AK) said taxes are an “inconvenient fact” that “lead to lower production.” “As we tax these energy companies it is sure not going to lead them to produce things that are more affordable more abundant in fact it will have the resulting impact of impacting negatively the prices on American consumers,” she said.

FACT: Big Oil Tax Breaks Increase Big Oil Profits.: A Congressional Research Service report from May 2011 found that the repeal of five key oil industry tax breaks would lead to little or no increase of gasoline prices. Experts like oil industry analyst Tom Kloza agree that it would have no impact.

Americans know that “oil companies that want to make too much profit” deserve the most blame for higher gas prices, a new Reuters poll found. Republican senators are working to increase the $137 billion in profits the Big Five oil companies sucked from working families last year, instead of helping their constituents.

Our guest blogger is Emilie Surrusco, communications director, Alaska Wilderness League.

Sen. Lisa Murkowski (R-AK)

During questioning by reporters, Murkowski acknowledged she has “long been an advocate for responsible oil and gas development in our state” and that the presentation gave her “more assurances that Shell really is building a response community up in the Arctic.”

This kind of theater is not unusual in a state where oil literally fuels 82 percent of the state’s budget. That doesn’t mean that there aren’t Alaskans who are opposed to drilling in our pristine Arctic Ocean – in fact, those who stand to lose the most, a vocal group of Inupiat people who continue to live off the bounty of Alaska’s Arctic waters in much the same way as generations before them, are the most courageous critics of Alaska’s reliance on oil. It also doesn’t mean that the rest of us don’t have a stake in what happens to a region that is priceless in its beauty and uniqueness – and in the fact that it functions as the world’s air conditioner. As climate change causes Arctic ice to melt at an alarming rate, we can’t afford to hand our Arctic over to oil companies like Shell.

What Murkowski and Shell didn’t say at last week’s press pageantry was that there is no way to effectively clean up a spill in the Arctic’s extreme, remote conditions, as reiterated recently with a comprehensive study by the federal government’s scientific arm. Despite recent technological advances in mechanical recovery for oil spill response, with the Arctic’s extreme weather conditions and broken ice, the amount of oil that could be cleaned up is estimated at a mere 1 to 20 percent, according to the USGS report. Meanwhile, Shell’s oil spill response plan for the Arctic states that the company would be able to clean up 90 percent of the oil in the event of a spill. This from a company that was recently found to own oil rigs in the northern North Sea that caused the majority of 100 potentially lethal spills.

What’s more, Alaska’s Arctic region is so remote – there are no large roads, no hotels, no major airports, no boat docks – that the nearest Coast Guard station — a critical component to any oil spill response — is 1,000 miles away. Even after BP’s disaster in the Gulf, Alaska’s politicians and the oil cheerleaders in Congress continue to push for Arctic drilling. Shell’s plan for the Arctic’s Beaufort Sea could be approved as soon as next month.

That is why a growing coalition of concerned organizations launched a national campaign to protect our one and only Arctic. Over the next year, we will be using a combination of media and grassroots tactics to bring these facts to light. Because once the American public learns that Shell and its cronies in Congress are willing to destroy one of our nation’s greatest natural treasures to further pad their already-bulging pockets, the Obama administration will have no choice but to tell Shell – if you can’t clean up a spill, you can’t drill. We hope you will join us in the Arctic on July 4, 2012 (which also happens to be when Shell hopes to begin drilling) for a celebration of the Alaskan Arctic’s “independence” from Shell.