October 6, 2017 Read More →

Industry Insiders and Administration Officials in Backroom Machinations to Preserve Coal Royalty Loophole

Washington Post:

Top Interior Department officials worked privately with energy industry representatives during the first weeks of the Trump administration to suspend a new accounting system that would have forced companies to pay millions of dollars more in royalties to the government, documents show.

The push to suspend the Obama-era rule, which is the subject of three federal lawsuits in Wyoming, took on a sense of urgency after an attorney for the coal company Cloud Peak Energy first suggested the move in late January. In email exchanges contained in more than 1,000 pages, obtained by the environmental group Natural Resources Defense Council under the Freedom of Information Act, top Interior officials raced to address industry concerns by halting a system that had just taken effect on Jan. 1.

Under Secretary Ryan Zinke, the department has launched a broad reassessment of what to charge firms extracting oil, natural gas, coal and other minerals from federal lands and waters, with an eye toward boosting domestic energy production. Interior on Wednesday held the inaugural meeting of a new Royalty Policy Committee, with Zinke’s energy counselor, Vincent DeVito, saying President Trump’s desire for “energy dominance” will help guide royalty rules as well as other aspects of department decision-making.

“This committee has a job unlike any other in the past,” DeVito said of the industry-heavy panel. It “has an agenda and authorization to pursue” energy development, he added.

Before Zinke or DeVito even arrived at Interior, though, career officials were reassessing how they should regulate these industries in light of Trump’s victory. The discussion focused on whether to revisit a method the Office of Natural Resources Revenue (ONRR) had adopted just months earlier for calculating royalties for minerals extracted on federal land.

The goal behind the change was to prevent firms from underpaying what they owe the government by selling coal to subsidiaries at an artificially low price — a strategy the government estimates costs taxpayers $75 million a year. Industry officials called the new requirements unclear and burdensome and wanted them halted before they had to file under the system for the first time.

More: Interior Department worked behind the scenes with energy industry to reverse royalties rule

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