(In last paragraph, corrects name of organization to Natural
Resources Defense Council, not National Resources Defense
WASHINGTON Feb 4 U.S. officials are not doing
enough to protect the interests of taxpayers in regard to the
millions of tons of coal being mined from federal land and
exported abroad, a government report concluded on Tuesday.
The Interior Department doles out leases and collects
royalties when miners tap federal land in coal-rich regions such
as the Powder River Basin in eastern Montana and Wyoming.
And while most of that fuel has gone to feed domestic
furnaces, government officials have largely ignored the
increasing amount that is exported, and taxpayers could be
losing out as a result, the Government Accountability Office, an
investigative arm of Congress, said in the report.
Coal exports are generally sold at higher prices than coal
"(The Bureau of Land Management) considers exports to a
limited extent," the GAO said, referring to the agency that is
responsible for getting the best deal possible for taxpayers on
Wyoming officials have only considered the value of export
markets with "generic boilerplate statements about the
possibility of coal exports," the report stated.
Officials from Colorado and other states told the GAO "they
did not consider exports when estimating fair market value
because there were few or no coal exports."
More than 6 million tons of coal were exported from Colorado
mines in 2012, according to data from the Energy Information
Administration, and about half of that was sold by brokers and
All of the 9 million tons of coal exported from Montana that
year was sold through a trading desk.
Early last year, former Interior Department Secretary Ken
Salazar ordered an investigation into whether miners were
wrongly using affiliated brokers to skirt royalty payments.
U.S. taxpayers are due a 12.5 percent royalty on coal sales
from federal land but officials want to know whether miners are
clearing their sales at artificially low prices.
The Interior Department said that it is committed to
protecting taxpayers but declined to comment on its
investigation into possible royalty shortfalls on coal exports.
A major hub of coal production is the Powder River Basin,
where the black rock can run in 10-story seams and the
low-sulfur content has been favored.
Several export terminals are being planned for the Pacific
Northwest as a gateway for Powder River Basin coal shipments to
Asia at a time when domestic coal demand has slackened.
Senator Ron Wyden, an Oregon Democrat, who originally called
for the investigation into royalties, said that he would
continue to seek answers about whether taxpayers are being
protected on export sales.
"This is an issue that deserves time and attention," he said
in a statement. "I plan to dig deeper."
Arch Coal Inc, Peabody Energy and Cloud Peak
Energy are all leading miners on federal land.
Spokespersons for the miners were not immediately available
"There's been no meaningful progress to determine if miners
are paying their fair share of royalties, but that doesn't mean
people are going to stop pushing," said Theo Spencer of the
Natural Resources Defense Council, a conservation group
advocating clean energy that has sued the Interior Department to
release documents on how it values the fuel.
(Reporting by Patrick Rucker; Editing by Peter Galloway)