WASHINGTON Feb 7 U.S. officials wrongly advised
coal companies when they leased federal land in a flawed program
costing taxpayers millions of dollars, according to an
independent review of the U.S. Interior Department.
The department's Bureau of Land Management is responsible
for protecting taxpayers when it doles out leases and collects
royalties on coal sales.
Lease auctions are supposed to be blind, with officials
seeking a fair price for taxpayers. But those auctions have been
tainted by information-sharing with mining companies, the
Interior Department's independent Inspector General Mary Kendall
"Some BLM state and field offices have conferred with the
mining company during the sales process to expedite the
completion of a coal lease sale," the IG said in a letter to
Senator Ron Wyden of Oregon that was released on Friday.
"In our view, this is a form of negotiation currently
prohibited by law and regulation."
Wyden, a Democrat, is due to step down soon as chairman of
the Energy and Natural Resources Committee to become chairman of
the Senate Finance Committee.
In a letter to Interior Secretary Sally Jewell, Wyden said
that he had "deep concerns" about the federal coal lease
Wyden wrote that he is particularly concerned about weak
oversight in coal-rich regions such as the Powder River Basin in
eastern Montana and Wyoming, where the black rock can be found
in 10-story seams.
While most of that fuel has gone to feed domestic furnaces,
government officials have largely ignored the increasing amount
that is exported, officials have said.
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 through
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.
Arch Coal Inc, Peabody Energy and Cloud Peak
Energy are al leading miners on federal land.