Dept. of Interior reports taxpayers are losing millions to coal companies

Michael O'Leary

“This is about safeguarding public resources. I’m asking these questions to make sure coal companies pay taxpayers every penny they owe in royalties.” ~Senator Ron Wyden (D-OR)

Following last year's report by the Institute for Energy Economics and Financial Analysis concerning questions over domestic coal reserves mined from public lands being purchased at remarkably low prices given their fair market value, as well as national news coverage, and calls from Senator Wyden, Chairman of the Committee on Energy and Natural Resources, along with Ranking Member Sen. Murkowski for the Department of Interior to take a closer look at how the BLM was managing these energy resources from our public lands, the first of a number of expected federal reviews has hit the presses.

Today the national newswires are reporting the results of the DOI's review that finds taxpayers are losing out on millions of dollars to coal companies, the same coal companies who now look to magnify those profits enormously by selling American energy resources overseas, turning the Columbia River into a superhighway for carbon pollution and climate change.

These are not minor accounting errors. The report details 13 substantive process improvements needed to deliver a fair price for the public's coal reserves and takes pains to note that even a 1 cent per ton undervaluation of the sale can result in millions of dollars in lost revenue.

Like they say, a million here, a million there, and pretty soon you're talking about big money.

The report states that it appears that several of the federal leasing offices have, ahem, "overlooked" the export market value of coal. Wow. With coal export prices recently going for as much as ten times the price paid domestically, it sure sounds like coal companies have been getting a pretty sweet deal.

It gets worse.

The report finds that the BLM's coal inspection program does not even have a process for charging a penalty when served with official Notice of Noncompliance, unlike oil and gas inspectors do.

In an even more jaw-dropping finding, the report calls out that "correcting the deficiencies identified in this report will be a challenge" because of the lack oversight and the risk of inconsistent interpretation of official standards by local program managers.

Download the full report here. It's staggering.

For more on the controversial plans to bring more coal to Oregon and Washington follow the continuing coverage at the Oregonian and OPB.

By Michael O'Leary June 11, 2013 Posted in Video.