Green Groups Seek Higher U.S. Coal Fees After Audit

The Sierra Club and the Natural Resources Defense Council said the U.S. Interior Department should charge companies that mine coal more after an audit found the federal government may be missing out on millions of dollars in payments.

The Bureau of Land Management, which oversees the mineral leasing program, didn’t fully account for coal’s export potential and may have missed out on $60 million in lease revenue, according to a report by Mary L. Kendall, deputy inspector general of the Interior Department. Exports have doubled to 125 millions tons in 2012, compared to 2007, according to the report, released yesterday.

Auditors also found that many leases are sold in uncompetitive auctions. The inspector general found that more than 80 percent of the sales for coal leases in the Powder River Basin in Wyoming -- the most actively mined area in the U.S. -- received only one bid in the last 20 years.

“This report makes it clear: At a time when we’re struggling with federal budget cuts, we’re simultaneously giving away taxpayer dollars and the public’s valuable natural resources to the coal industry,” Sharon Buccino, the director of the Natural Resources Defense Council’s land and wildlife program, said in a statement.

She said Interior Secretary Sally Jewell should put a “true price on coal” that also includes its “social and environmental costs.”

$60 Million

The U.S. collected more than $2.4 billion in bonuses and royalties from coal companies. The audit said the U.S. may have missed out on $60 million since 2000 due to undervalued leases.

Coal from federal lands account for about 40 percent of the total U.S. production. The Interior Department manages 314 leases, according to the audit.

Luke Popovich, a spokesman for the National Mining Association, a Washington-group whose members include Peabody Energy Corp. (BTU), the largest U.S. coal company by sales, said the potential lost revenue is only a small slice of the money coal companies are providing to the U.S. in royalty and lease payments.

The auditors’ report “offers guidance to federal agencies for enhancing the program’s effectiveness but the resulting gains they estimate amount to a rounding error compared to the total sums they document are paid to taxpayers,” Popovich said in a statement.

Senator Ron Wyden, an Oregon Democrat and chairman of the Energy and Natural Resources Committee, said Congress should “take another look” at the coal leasing program to “ensure taxpayers are collecting every dime they’re owed.”

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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