Taxpayers for Common Sense Calls for Better Oversight, More Transparency of Coal Program

WASHINGTON (September 18, 2013) – A lack of transparency and accountability is responsible for billions in taxpayer losses from the mining of federal coal, according to a recent report from Taxpayers for Common Sense (TCS).

“Federal Coal Leasing: Fair Market Value and a Fair Return for the American Taxpayer,” examines the reasons for the federal government’s loss of an estimated $29 billion over the past three decades due to the undervaluing of federal coal. The report recommends a number of actions for Congress and the Bureau of Land Management (BLM), the agency within the Department of Interior responsible for the federal coal leasing program, as Congress awaits the results of two recent inquiries about the program.

“It is outrageous that taxpayers are giving away vast resources at a time when the country faces a protracted budgetary crisis,” said TCS President Ryan Alexander. “BLM has failed to create a system that fosters competition for a valuable public resource by allowing the coal industry to largely control the process of leasing and bidding for this land.”

The report comes on the heels of a lease auction in the Powder River Basin that failed to attract a single bidder, including the company that proposed the tract. Another lease sale is scheduled for today, and is expected to attract below-market-value bids, if any.

“The current down market provides a good opportunity to take a ’time out’ so that the reports of poor management and recommendations for reform can then be gathered, assessed and implemented,” said Alexander. “Each of these recent sales represents another lost opportunity for the Federal government and its state and local partners.”

Despite repeated Congressional directives to ensure a fair return for mining publicly owned coal, the current system is inadequate and shrouded in secrecy, says the study. While the use of coal for energy is on the decline in the United States, it is growing abroad, especially in Asia. It concludes that coal companies, banking on growth markets abroad, are taking advantage of a poorly administered government coal program to underpay royalties as well.

The report recommends that any pending or new coal leases should be delayed until the current Congressional investigations are finished and all the recommendations are considered and implemented, particularly those that affect fair market value appraisals of federal coal.

“Study after study shows that BLM fails to capture a fair return for taxpayers from the mining of federal coal, particularly in the rich coal fields of the American West,” continued Alexander. “It is critical that the pending Congressional inquiries are followed up with action.”

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The full report can be found here.

Taxpayers for Common Sense is an independent voice for taxpayers working to increase transparency and expose and eliminate wasteful and corrupt subsidies, earmarks, and corporate welfare.