In a letter to the Department of Interior on Friday, the Senate Energy and Natural Resources Committee’s new leadership, Chairman Ron Wyden, D-Ore., and Ranking Member Lisa Murkowski, R-Alaska, called for federal regulators to ensure taxpayers receive the full value for coal mined on federal and tribal lands.
The senators are specifically concerned that coal companies may be “shortchanging state and federal taxpayers by understating the value of coal mined on federal and tribal lands.”
According to a news report by Reuters, coal companies may be using affiliates to sell the coal overseas at a much higher price, which is not always reflected in royalty payments.
“As companies seek to ship more coal overseas, taxpayers must be confident that the Bureau of Land Management and the Office of Natural Resources Revenue (ONRR) have stringent royalty collection and auditing controls in place as coal markets become increasingly oriented toward international buyers,” the senators wrote.
Wyden and Murkowski are seeking more information from the Interior Department to protect taxpayers against the potential loss of “tens of millions of dollars” in annual royalty revenue.
“Coal companies need to be paying taxpayers all of the money they are owed.” Wyden said. “Federal agencies have a duty to ensure state and federal taxpayers get the full value for natural resources extracted from public lands. If regulators, or decades-old laws, are not doing enough to protect the public interest, our committee intends to find out, and to fix it.”
Between the 2001 and 2011 fiscal years, coal royalty revenue for the federal government and Indian tribes has more than doubled to $898 million, according to ONRR. It accounts for 21 percent of federal onshore royalty payments, 13 percent of tribal royalty payments, and 8 percent of total federal royalty collections.
The domestic price of coal mined in the Powder River Basin is about $13 per ton, according to press reports, which is less than half of international prices that are $30 a ton or more. That price difference would translate to a royalty shortfall to the federal government of more than $2 per ton, the senators said.
Senators question coal export royalty collection
