Bill would push back on Trump admin efforts that could cost taxpayers billions

Boston (August 8, 2017) – In the wake of the Trump administration’s decision to stop reforms of the broken federal coal program that has been costing American taxpayers billions of dollars, Senator Edward J. Markey (D-Mass) today announced that he will be reintroducing the Coal Oversight and Leasing (COAL) Reform Act as soon as the Senate returns to session. The COAL Reform Act would modernize the federal coal program to protect taxpayers and end noncompetitive leasing practices and other weaknesses in the leasing program. 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 clear that American taxpayers are not receiving a proper return on the more than 400 million tons of coal produced from federal lands each year worth billions of dollars.

“American taxpayers and America’s children should not have to pay the price for President Trump’s giveaway to coal companies,” said Senator Markey, a member of the Environment and Public Works Committee. “Coal resources on public lands belong to all Americans and they should not be sold at rock bottom prices to worsen climate change. Given the Interior Department’s rollback of the reforms the Obama administration had initiated, we need comprehensive legislation to put an end to taxpayers subsidizing the extraction, export and burning of this federal natural resource.”

Senator Markey’s COAL Reform Act would:

• Put in place a temporary moratorium on new coal lease sales until the proper reforms have been put in place;
• Eliminate the loophole that allows coal companies to avoid paying the upfront cost that coal companies pay for the right to lease federal coal, also known as bonus bids;
• Help determine the Fair Market Value (FMV) of coal leases by ensuring coal companies certify the accuracy of exploration data and that DOI consider independently verifying the data provided by industry;
• Reform the FMV process by ensuring that no lease sale is conducted until DOI has completed a FMV analysis that fully accounts for the export potential of public coal, and prevents DOI from accepting minimum bids that are below the FMV;
• Make the coal leasing process more transparent by requiring DOI to make public versions of appraisal reports and to put information on lease sales, high bids, royalty payments and revenue on its website so that it is accessible by the public;
• Address the tremendous lack of competition for federal coal lease sales by requiring the Secretary of the Interior to create a coal leasing plan, modeled after the offshore oil and gas leasing plan, to maximize competition for coal leases and the financial return for taxpayers and consider the impacts of coal leasing, production and development on climate change and the environment;
• Increase the outdated minimum rental rate for coal leases;
• Require the Bureau of Land Management to issue regulations to ensure consistent inspection and enforcement of coal mining operations; and
• Increase enforcement capacity by allowing DOI to issue civil penalties to ensure that coal companies follow the law.

In June 2016, the White House Council of Economic Advisers released its finding that American taxpayers are losing billions of dollars a year on the coal being mined from public lands, confirming analysis done by Senator Edward J. Markey (D-Mass.) that taxpayers were losing out. The Obama administration’s Interior Department announced a temporary moratorium on new coal leasing while it reviewed a number of policies that had been called for by Senator Markey to reform the program.

In 2015, 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 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.

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