Interior Department action would implement reforms called for by Senator to protect taxpayers, climate

Washington (January 15, 2016) – After three decades of calling for reform to the broken federal coal program that potentially costs American taxpayers hundreds of millions of dollars, Senator Edward J. Markey (D-Mass) today applauded the announcement by the Obama administration that it is talking comprehensive action to reform the program. The reforms the Department of the Interior announced today echo what Senator Markey has been calling for to modernize the program, protect taxpayers who own this valuable coal resource on public lands, and protect the climate.

“For more than 30 years I have been calling for reform to our nation’s federal coal program, and I applaud President Obama and Secretary Jewell for taking this historic action today,” said Senator Markey, a member of the Environment and Public Works Committee. “The United States has to lead by example in fighting climate change, and that should start with the way that we manage the coal and other fossil fuel resources on public lands that belong to the American people.


“For too long, we have been selling coal owned by the American people at rock bottom prices,” continued Senator Markey. “Today’s action will ensure that we can protect taxpayers who own this valuable resource by closing the mine-size loopholes in our coal leasing process.  And it will ensure that we are not worsening climate change by subsidizing coal companies to mine this coal from public lands and selling it below market value. I also commend the Obama Administration for evaluating the impacts the exporting our coal abroad could have on our leasing program.”


The reforms announced today track closely with what Senator Markey has repeatedly called on the Interior Department to do and introduced legislation, including:


--Temporarily suspending new lease sales until reforms of the coal program are put in place

-- An overhaul of the determination of how, when and where to lease

-- Accounting for the impacts of coal leasing on the environment and the climate

-- Reforming the Fair Market Value (FMV) determinations to ensure that taxpayers are protected

-- Examining whether the royalty rate paid by coal companies to the United States Treasury should be increased

-- Factoring the potential export of federally-owned coal into fair market value calculations and leasing decisions

-- Improving transparency by requiring the Interior Department to post additional information on the leasing process online

Senator Markey released a report in 2014 prepared by the Government Accountability Office (GAO) that examined the federal coal program. Among other deficiencies, the GAO found that the vast majority of coal lease sales on public lands are not competitive. Roughly 90 percent of lease sales receive bids from only a single coal company and the vast majority of those opening bids from a single company – 83 percent – are accepted by the Interior Department. The GAO review of the federal coal program requested by Senator Markey was the first since 1994, and the problems with federal lease sales stretch back into the 1980s.
The report by the GAO at the request of Senator Markey is available HERE and a summary of the GAO report prepared by Senator Markey’s office is available HERE.
Senator Markey first asked GAO to review coal lease sales in 1982, when he was in the House of Representatives, following allegations of disclosure of pre-sale appraisal information and appraisal and sale procedures that failed to assure the public received a fair market value in coal lease sales in the Powder River Basin. The 1983 report that followed uncovered that the Reagan administration had sold public coal in the area for roughly $100 million less than it was worth. As a result of then-Rep. Markey’s investigation, numerous changes were recommended to the way that Interior leases the federal coal that belongs to American taxpayers.