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Federal Coal Mining Program Cheats Taxpayers, Needs Reforms

Photo of Department of Interior Secretary Sally Jewell

Department of Interior Secretary Sally Jewell addressing the first Listening Session on the Federal Coal Program. (Photo by Iulia Gheorghiu, POGO)

Loopholes and exemptions in the rules governing companies that mine coal on public lands cheat taxpayers out of millions of dollars in revenue each year, the Project On Government Oversight (POGO) told Department of Interior leadership today. POGO is urging the Interior Department’s Bureau of Land Management to change these outdated rules.

Companies extracting coal from public lands often pay far less than their fair share due to loopholes and exemptions. During a public forum on changing coal regulations, POGO investigator Mia Steinle told Bureau of Land Management officials that these loopholes cheat taxpayers.

POGO's Mia Steinle after making a public comment at the Department of Interior's first listening session on the Federal Coal Program
 POGO's Mia Steinle after making her public comment at the DOI listening session on the Federal Coal Program. (Photo by Iulia Gheorghiu, POGO)

Currently, the coal royalty rate for surface mining on public land is 12.5 percent of the value of production. However, mining companies paid on average only 4.9 percent from 2008 to 2012, as estimated by independent analyst Headwaters Economics. This gross underpayment of the statutory royalty rate is permitted because there are so many allowable deductions.

“It's crucial that the public speaks up to let the Interior Department know that the rules governing federal coal are outdated and are costing taxpayers millions of dollars in revenue," Steinle said. 

Today’s public forum is the first of five on the federal coal program being held across the country through the Bureau of Land Management.

“That Secretary of the Interior Sally Jewell scheduled public forums on modernizing the federal coal programs shows that real momentum is building to change these outdated rules,” Steinle said.

Photo of Department of Interior Activists at Listening Session on Federal Coal Program

 

For more information about POGO’s analysis of the changes needed to the federal coal program, go here.

Topics: Energy and Natural Resources

Related Content: Extractive Industries Transparency Initiative - EITI

Authors: Iulia Gheorghiu

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