The Daily Sentinel – 06/22/2016 – A04
|Anti-coal crusade will cost the American taxpayer
Once again, the federal government’s anti-coal crusade will cost the American taxpayer as the Secretary of the Interior continues to implement a costly scheme to increase federal royalties and halt new leasing. With a three-year moratorium on lease activity already in place, the secretary appears more concerned about promoting the agenda of anti-coal extremists, while ignoring the revenues and the prosperity that federal coal brings to the public.
On June 23, Colorado citizens will have the opportunity to tell the Bureau of Land Management (BLM) to stop the war on rural Colorado, a war that has produced casualties and lost jobs in coal country. We are hopeful of a strong turnout at the Avalon Theatre where the meetings will take place.
In Colorado, 60 percent of our electricity is generated from coal and much of that coal comes from federal lands. In fact, nationwide, over 40 percent of the coal produced is mined on federal leases, primarily located in the West. What does the American taxpayer receive in return? Affordable energy, a share of royalties paid on the coal, and high-paying jobs to support rural economies.
Coal-mining jobs and benefits provide employees with the means to achieve the American dream of a home, health care, and disposable income that helps build a strong community. In Colorado, coal miners earn average wages and benefits exceeding $134,000. These incomes are not easily replaced and communities suffer when mining is curtailed for any reason, including disruption in leasing. Colorado royalty payments on federal coal leases actually topped $40 million in 2015.
Companies that lease the coal also pay bonus bids to obtain the lease in additional to royalty p! ayments on the coal actually produced. Coal producers currently pay the public almost 40 cents of every dollar they collect from the production of federal coal, in addition to other fees and taxes. Bonus bids, royalties and rents on federal coal are shared with the states and are used to support public education, water projects, and local government infrastructure.
Here in Colorado that amounted to approximately $22 million in fiscal year 2015.
Critics of the leasing program complain that royalty rates should be raised to assure a “fair return” to the taxpayers. That is simply not supported by fact. The current 12.5 percent royalty rate is actually above market value and is approximately 40 percent more than the royalties paid on privately owned coal mined in the Midwest and Appalachia. Nationwide, leasing of federal coal has contributed $13.8 billion in revenue to federal and state governments since 2003.
Interior Secretary Sally Jewell cites concerns over federal coal leasing impacts on climate. Even if we assume the validity of the assumptions about mankind’s impact on climate, does that mean that we address climate issues by cutting off our energy sources before they are produced and hoping that other resources will fill the gap? What a short-sighted approach! The production and use of coal from federal lands is a minor blip on the screen of worldwide greenhouse gas emissions. Actions to discourage leasing through delays, moratoria and rate increases will not benefit the environment, it will only hurt American workers and energy consumers.
Higher royalty rates and interruptions in leasing will accomplish nothing for the climate but will jeopardize revenues! to federal and state governments. They will accomplish the goal of “! keeping coal in the ground.” Instead of a fair return for American taxpayers, there will be “no return” as production dwindles and ceases. If the Interior secretary is truly concerned about maximizing a strong return on investment for taxpayers, Interior should consider decreasing royalty rates, streamlining the leasing process and making the permitting process more efficient.
Stuart A. Sanderson is president of the Colorado Mining Association. He can be reached at email@example.com.