Markey Releases Interior Response on Faulty Coal Lease Process

Senator drafting legislation to enact coal lease reforms and impose moratorium on new lease sales

WASHINGTON (September 15, 2014) – Senator Edward J. Markey (D-Mass.) today released a response from the Department of Interior’s (DOI) Bureau of Land Management regarding the Senator’s inquiries about the agency’s faulty coal leasing procedures that are causing taxpayers to lose hundreds of millions of dollars. The response rejects Senator Markey’s call to enact a moratorium on new coal leases until noncompetitive leasing practices and other weaknesses in the leasing program identified by the Government Accountability Office (GAO) are reformed and remains mostly silent on how or when BLM might correct the deficiencies.

Senator Markey’s request for more information from the agency followed the release of a report prepared at the request of Senator Markey by the Government Accountability Office. 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 response from BLM to Senator Markey fails to answer major questions about how the agency is reforming its coal leasing program and when those reforms might be put in place. The agency has also failed thus far to provide answers to separate, non-public questions asked by Senator Markey in order to protect what BLM says is confidential information about the valuation of coal for lease sales.

The full response from BLM to Senator Markey is available HERE. It was first reported on by The Boston Globe.

The report by the GAO is available HERE and a summary of the GAO report prepared by Senator Markey’s office is available HERE.

“This response from the Interior Department to the significant flaws that have been identified in the coal leasing program by the GAO does not adequately assure American taxpayers that this program will be reformed and that they will be protected. Failing to take swift action to put the necessary reforms in place will allow coal companies to continue to buy this tremendously valuable public asset at bargain basement prices,” said Senator Markey. “That is why I will be drafting legislation to suspend new lease sales of coal from public lands until the reforms recommended by the GAO to protect taxpayers are put into place.”

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.