Bill would temporarily suspend new coal leases until reforms are implemented
Washington (May 15, 2015) – In an effort to reform the broken federal coal program that is potentially costing taxpayers hundreds of millions of dollars, this week, Senator Edward J. Markey (D-Mass.) introduced the Coal Oversight and Leasing (COAL) Reform Act (S. 1340) to modernize the program to protect taxpayers and end noncompetitive leasing practices and other weaknesses in the leasing program. Recent investigations of the federal coal program, including a Government Accountability Act (GAO) report released by Senator Markey and a review by the Department of Interior Inspector General (IG) have found numerous deficiencies in the federal coal program. Many of these problems have persisted since the 1980s, such as a lack of competition for federal coal leases. It is unclear whether American taxpayers are receiving a proper return on the more than 400 million tons of coal produced from federal lands each year worth billions of dollars.
“The federal coal program is rife with sweetheart deals, outdated regulations and mine-sized loopholes,” said Senator Markey, a member of the Environment and Public Works Committee. “While the Interior Department has taken some steps to address the coal leasing process, we need comprehensive reform to ensure taxpayers receive a fair return on the sale of these publicly owned resources and the agency has the authority to ensure coal mining companies are following the law. Until reforms are put in place, American taxpayers will continue to pay the price and we will undercut the administration’s historic climate goals by subsidizing the extraction, export and burning of this federal coal.”
A copy of the COAL Reform Act can be found HERE.
Specifically, the COAL Reform Act:
Last year, Senator Markey released a report prepared by the 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 DOI. 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.