Markey: DOI’s IG Report on Powder River Basin Shows Reforms Still Needed

Contact: Eben Burnham-Snyder, Rep. Ed Markey, 202-225-2836

Taxpayers Losing Money, Safety at Risk, Report Says; Congressman Will Ask IG to Testify at Hearing Next Week on PWB Coal

WASHINGTON (June 11, 2013) – Rep. Ed Markey (D-Mass.) today expressed disappointment that taxpayers are likely still losing money due to a faulty lease process in the Western U.S.’s main coal supply area in Wyoming’s Powder River Basin, according to a report released today by the Department of Interior’s Inspector General. The report also found deficiencies in the enforcement and inspection of Powder River Basin regulations and operations.

The report found that more than $2 million was lost because the Bureau of Land Management accepted lease bids that were lower than BLM’s own fair market value appraisal. $60 million more may have been lost because BLM undervalued “lease modifications” that “can increase the size of an existing lease by up to 960 acres.” Because of these and other findings, Rep. Markey announced that he will be asking the IG’s office to testify before the Natural Resources Committee next Thursday, when the committee will be holding a hearing on Powder River Basin coal leasing and practices.

“In the Powder River Basin, the more things change, the more they stay the same,” said Rep. Markey, the top Democrat on the Natural Resources Committee. “Taxpayers are likely still losing money. The area is not being managed properly. This is a problem that is decades old, and stretches through several administrations. I hope this report causes the Department of Interior to institute real and enforceable reforms to protect the taxpayer and the environment as coal companies are increasingly looking to export American coal for higher prices abroad. I will ask the Inspector General’s office to testify before the Natural Resources Committee next week so we can get the answers we need to finally clean up the Powder River Basin coal leasing program.”

The report also noted that while the “price of exported coal has more than doubled” between 2007 and 2011, “BLM does not fully account for export potential” when the agency determines the fair price for leases. The report also says that only “six instances of noncompliance have been reported in 8,118 inspections conducted” between the fiscal years of 2009 and 2011, which may be the result of the fact that coal inspectors do not presently have effective enforcement tools.

Rep. Markey asked last year for the Government Accountability Office to investigate the leasing practices in the Powder River Basin due to increased exports and worries about ongoing leasing problems. That report is expected in the coming months. Rep. Markey requested the original GAO report into coal leasing in the area in 1982, which showed huge underpricing of coal leases.

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