US House panel looks at Western coal industry

BILLINGS, Mont. — Congress is poised to enter the debate over whether taxpayers are getting a fair return on coal mined from public lands in the Western U.S. as a House committee plans a Tuesday oversight hearing on the industry.

Republicans in control of the House Natural Resources Committee said they will highlight coal’s benefits in an effort to increase coal production on public lands. Those benefits include more than 15,000 mining jobs in Western states and $2.4 billion in federal revenues last year, according to federal agencies.

Democrats counter that an uncompetitive bidding process, the routine undervaluing of coal and increased volumes of the fuel sent to Asian markets have allowed mining companies to shortchange taxpayers.

Most coal sales from public lands occur in the Powder River Basin of Wyoming and Montana, which accounts for more than 40 percent of U.S. coal production. The region is dominated by four companies — Arch Coal, Inc., Peabody Energy, Cloud Peak Energy and Alpha Natural Resources.

In 2012, federal coal revenues rose sharply over the prior year as the Obama administration approved six large leases. Yet there are growing signs of problems in the government’s coal program.

An Interior Department inspector general’s investigation last month estimated $62 million in potential lost revenues due to the agency undervaluing coal. The Ohio-based Institute for Energy Economics and Financial Analysis (IEEFA), a group with environmental ties, has pegged lost revenues much higher — more than $30 billion since the early 1980s, when many of the rules governing the industry were last revised.

A second report on the leasing program is expected soon from the Government Accountability Office, while a separate Interior investigation underway since February is examining whether mining companies are paying sufficient royalties on exported coal.

Tuesday’s House hearing was requested by Rep. Doug Lamborn, a Colorado Republican, after he recently toured the Powder River Basin. With coal producing the bulk of the country’s electricity and the U.S. holding the largest recoverable coal reserves in the world, Lamborn said it would be “the height of folly to throw this resource away” by curtailing mining.


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