The relationship between the Federal government's Bureau of Land Management and coal companies has been far too cozy. It turns out that Big Coal has been getting western coal for just pennies a ton as a result of some very sweet deals with the lease prices and production royalties being effectively set by the coal companies themselves.
U.S. Charging Coal Companies Too Little for Land, Report SaysCoal companies have even been getting a special low royalty by using shell corporations to move coal for export through while the mining component claims the coal is for domestic consumption getting to pay a lower royalty rate.
By CORAL DAVENPORT
WASHINGTON — Some coal mining companies are paying lower-than-market rates to lease land from the federal government, while also enjoying low royalty rates, increasing their profits at the expense of taxpayers, investigators for the Senate Energy and Natural Resources Committee have found.
The investigation is the most recent effort by some Senate Democrats to bring attention to the government’s coal leasing program. A report by the Interior Department’s inspector general last year said that the agency’s Bureau of Land Management was not abiding by its own rules in assessing the value of minerals beneath federal land and that undervalued leases were costing taxpayers millions of dollars.
He Wyden said that his investigation found that “multiple coal mines in multiple states have bought leases for pennies on the ton, enjoy reduced royalty rates during production (some of which are lower than prevailing rates for state land), yet appear to sell coal near, at or above expected market prices.”The Interior Dept's Bureau of Land Management has long been subordinate to miners, loggers, and ranchers.
The Interior Department, he said, “appears to have repeatedly shortchanged taxpayers by underestimating the volume of coal contained in reserves that is sold to lessors.”
That report — conducted at the request of Senator Edward J. Markey, Democrat of Massachusetts — found that in the Mountain West, where coal companies have leased land from the federal government for decades, most coal lease sales since 1990 had only one bidder, and that the Interior Department did not always adequately assess the market value of the leases or document the reasons for accepting bids below that value.One bidder? How much more cozy a coal company get with the BLM? Coal companies don't deserve to keep their place at the Federal trough. The BLM needs to change its 19th century orientation of resource extraction to a 21 century orientation that takes account of our increasingly apparent climate crisis.