Comments of Jill Lancelot, co-Founder of
Taxpayers for Common Sense

Public scoping meetings on Programmatic Environmental Impact Statement on Federal Coal Program

Grand Junction, CO          

June 23, 2016

My name is Jill Lancelot and I am co-founder of Taxpayers for Common Sense, a national, non-partisan budget watchdog.  Taxpayers for Common Sense was founded on the belief that American taxpayers around the country needed a strong voice in Washington. Our mission quite simply is to achieve a responsible federal government that operates within its means.

For more than 20 years, Taxpayers for Common Sense has focused on the principle of providing a fair return for the natural resources American taxpayers own. We work to ensure that taxpayers receive the appropriate compensation for  development on federal lands, including the extraction of hard rock minerals; oil, gas, and coal; and the production of wind, and solar. We need to assure that taxpayers are protected, that royalties are collected, operations are cleaned up, and that American taxpayers receive what they are due.

The federal coal leasing program is a prime example of how taxpayers are seriously shortchanged. The program, badly in need of reform, has been riddled with problems for years.  Indeed, the current leasing system bears little resemblance to the competitive program envisioned by Congress 40 years ago. As recent reports from Interior’s Inspector General and the Government Accountability Office have documented, undervaluation by even a single penny per ton can result in a multimillion dollar revenue loss for taxpayers. The proof is there for all to see: Undervaluation and problems with the coal program have already cost taxpayers billions of dollars.

Unfortunately, the current structure lacks transparency and competition, making it difficult to assess the fair market value of federal leases. Between 1990 and 2012, 90 percent of leased tracts received only a single bid, usually from the company that proposed the tract. The public has no idea how much its coal is actually worth or how much revenue it might be losing.

There’s also this remarkable fact:  The Bureau of Land Management refuses to disclose how it estimates fair market value. The bids for leases are sealed. BLM does not provide an accounting of the number of leases with reduced royalty rates. In reality, the process BLM uses to make sure taxpayers get fairly compensated might as well be buried in a black box.

We believe that loose oversight and the lack of transparency has led to the absence of fiscal responsibility. Coal from federal lands is a public asset, and BLM is responsible for managing these resources responsibly on behalf of taxpayers. It is not doing so.

Because demand is down and there is almost eight billion tons of recoverable reserves of federal coal already under lease, this is the perfect time to step back and review the federal coal program. Such a review could go a long way toward ensuring that taxpayers do not continue to lose billions of dollars.

Coal will be an important part of our energy mix for decades to come and it is important that Interior emerges from such a review better prepared to meet the demands of today’s energy market.  Interior has a fiduciary responsibility to ensure that taxpayers are fairly compensated for the assets we all own and it is high time the nation’s coal program is reformed. With a $19 trillion debt increasing by the day, we cannot afford to wait to fix this long broken system that shortchanges taxpayers.

Thank you for the opportunity to comment here today.