Senators Call for Investigation of Coal Export Royalties Scandal

by Kelly Mitchell

January 7, 2013

Bipartisan initiatives are rare events these days, but the coal industrys scheme to export millions of tons of publicly owned coal overseas is proving scandalous enough to bring Democrats and Republicans together.

On January 4th, responding to a Reuters investigation, Senators Ron Wyden (D-OR) and Lisa Murkowski (R-AK) co-authored a letter to Department of Interior Secretary Ken Salazar calling for a full investigation into whether companies like Arch and Cloud Peak are undervaluing coal destined for foreign markets and cheating US taxpayers out of royalty payments.

The coal in question is from the Powder River Basin, an area stretching across Wyoming and Montana thats home to one of the largest coal reserves in the world. This coalbelongs to American taxpayers, for use in the best interests of the nation companies are supposed to pay the United States to be able to mine that coal. Of course, whats truly in Americas best interests is to keep coal underground so it doesnt fuel droughts and monster hurricanes due to runaway global warming. But if the government is going to give our coal to corporations, it should at least make sure those companies arent ripping us off.

Unfortunately, the Federal government, under the Department of Interior and Bureau of Land Management, has been leasing this coal for next to nothing literally cheaper than dirt to companies that now hope to ship it overseas to Asia.

According to the Institute for Energy Economics and Financial Analysis, this coal leasing scandal has amounted to a $30 billion and counting subsidy. Now, it appears that coal companies may also be selling this coal to in-house domestic affiliates before shipping it overseas to avoid paying full royalties on the much higher price coal can fetch on international markets. If the allegations prove true, its a real slap in the face to American taxpayers from an industry that likes to boast about its commitment to American prosperity.

Sens. Wyden and Murkowskis call to action was echoed by ranchers in Montana and Wyoming who are living near massive strip mines. As one rancher put it:

Neighbors to Wyoming coal mines, like my family, have sacrificed a lot for Wyoming to be the nations leader in coal production. said L.J. Turner, cattle and sheep rancher, from Wright, Wyo., and member of the Powder River Basin Resource Council. The least we deserve is to know that were not getting short-changed by the coal companies.

Coal companies like Arch, Peabody and Ambre are looking at a shrinking market to burn coal in the United States. The only way they can keep up their big profits is to sell the coal overseas, so its no surprise that theyll eat up government handouts and cut corners to do it. And they want to keep the whole thing as quiet as possible.

Unfortunately, as more people become aware of whats going on, the industrys odds continue to shrink. In the past few months, nearly 10,000 people have attended public hearings in Washington and Oregon to voice their opposition to coal exports. If that doesnt trouble coal company executives, Senator Murkowski and Wydens call for an investigation should. Sen. Murkowski isnt exactly a traditional critic of the coal industry shes been a steadfast ally for fossil fuel companies in the past, but apparently this latest scandal is too much for her to bear.

When even their friends are turning on them, maybe its time for the coal industry to start getting nervous about its plans to rip off Americans.

Kelly Mitchell

By Kelly Mitchell

Kelly Mitchell is the Climate and Energy Campaign Director for Greenpeace, based in Chicago. Since 2006, she has worked with activists and organizations across the country to confront corporate polluters and transform U.S. energy policy. She currently leads Greenpeace's campaign for an economy powered by 100 percent renewable energy, pushing some of the largest companies in the world to embrace wind and solar and working alongside communities to develop a just and democratic energy system.

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