Federal coal reform is a win for taxpayers, the environment and our new energy economy

The Hill
January 26, 2016

By Nan­cy Pfund

The Oba­ma administration’s announce­ment that the fed­er­al gov­ern­ment will tem­porar­i­ly halt new coal leas­es on fed­er­al pub­lic lands in order to review its coal-leas­ing pro­gram is a long over­due move to serve the inter­ests of the envi­ron­ment, of our new ener­gy econ­o­my, and of the real investors in our fed­er­al pub­lic lands — Amer­i­can taxpayers.

When the fed­er­al gov­ern­ment last wrote rules for coal min­ing on pub­lic lands, Indi­ana Jones and the Last Cru­sade was on the big screen, cars had no airbags, a gal­lon of gas cost 97 cents, and smok­ing was allowed on airplanes.

As it stands now, the fed­er­al coal leas­ing pro­gram is hid­den from pub­lic view and lacks an open, com­pet­i­tive process that would be required by investors in any oth­er sys­tem and would secure a fair return for tax­pay­ers. More­over, some com­pa­nies have seized on a loop­hole to get out of pay­ing their roy­al­ties. Here’s how it works: a com­pa­ny sells coal to its own affil­i­ate for much less than the coal is worth, low­er­ing the amount of roy­al­ties it is required to pay to the fed­er­al gov­ern­ment. Then, the affil­i­ate com­pa­ny turns around and sells the coal at mar­ket val­ue, enjoy­ing the rev­enues with­out the bur­den of pay­ing tax­pay­ers their fair share.

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