Oregon Sen. Ron Wyden was recently named chairman of the Senate Energy and Natural Resources Committee, and one of his first moves was asking the administration to investigate the royalties it receives for coal mined on public land.
The Bureau of Land Management owns vast reserves of coal in Wyoming and Montana. Companies like Arch Coal and Peabody Energy mine the coal, sell it, and pay the government its cut through bids, leases, and a 12.5 percent royalty payment based on their revenue.
Wyden, a Democrat, says it’s easier to calculate the government’s share when the coal is sold in the U.S. But weak domestic coal prices and growing demand in Asia mean exports are on the rise. Investors including Arch Coal and Peabody Energy have proposed building five new export terminals in Oregon and Washington to reach Asian markets.
Wyden says when coal from public land is sold overseas, its harder for the government to monitor whether its getting its fair share of royalty payments, so he’s called for an investigation.
“The question is, when you extract the coal from federal lands, are taxpayers getting full value? And if they’re not, it raises the question of whether taxpayers are getting fleeced,” Wyden said in an interview.
Coal companies say they are playing by the rules. Arch coal, one of the largest, said in a statement that in 2012, about 10 percent of its 2012 sales were exports, including 5 million tons of coal mined on federal land. Arch says it complies fully with royalty laws and is regularly audited by the federal government.
(EarthFix will have more Monday on the coal royalties issue and what it means for proposed export terminals in the Pacific Northwest.)
(Hover over markers to hear reports on coal in communities of the Northwest. Then click “website” for more EarthFix coverage. Click here for larger map view. Note: Train routes are approximations. They illustrate potential corridors based on existing lines and publicly available information.)
Share your experiences as part of EarthFix's Public Insight Network.
Join our Public Insight Network!