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. http://www.nytimes.com/2014/02/08/us/us-charging-coal-companies-too-little-for-land-report-says.html?ref=us
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.
Senator Ron Wyden, Democrat of Oregon, the chairman of the committee, began an investigation last year of the Interior Department’s coal leasing program, looking into rates and royalties paid by coal companies. Mr. Wyden’s office said the inquiry was continuing, but the committee’s staff released its preliminary findings on Friday as Mr. Wyden prepares to leave the energy committee to become chairman of the Finance Committee.
In a letter on Thursday to Interior Secretary Sally Jewell, Mr. Wyden wrote that he had “deep concerns regarding the Department of Interior’s coal leasing program.” 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 Department, he said, “appears to have repeatedly shortchanged taxpayers by underestimating the volume of coal contained in reserves that is sold to lessors.”
Mr. Wyden’s report follows on the heels of a Government Accountability Office report released this week into the coal leasing program. 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.