August 7, 2017 Read More →

On the Blogs: U.S. Policy Reversal on Federally Owned Coal Will Cost Taxpayers $75 Million a Year


The Trump administration’s decision not to close a loophole that allowed energy companies to sell coal, oil, and natural gas at significantly depressed prices will cost taxpayers $75 million per year, a fact the administration itself acknowledged in a Federal Register notice published Monday.

The Department of the Interior’s decision to repeal the Obama-era rule contradicts Secretary Ryan Zinke’s claims that he wants to maximize revenue from the private use of federal lands, according to Dan Bucks, the former Montana Director of Revenue and an expert on federal coal policy. Part of the revenues collected by the DOI from royalties and leases of federal lands goes to states and local communities through revenue sharing.

The DOI’s Office of Natural Resources Revenue (ONRR), in the Federal Register notice, severely underestimates how much money will continue to be lost if the valuation rule is not allowed to go back into effect, Bucks told ThinkProgress. “As bad as the $75 million loss is, it’s not a credible number,” he emphasized.

In Monday’s Federal Register notice, ONNR said the impact to the federal government, as well as states and local governments, will be a net decrease in royalties as a result of the changes. By allowing the loopholes to stay in place, the Trump administration will be harming U.S. taxpayers and local communities that receive revenue from minerals extraction that occurs on federal lands, Bucks said.

A 2013 DOI inspector general report said taxpayers were losing tens of millions of dollars in revenue annually because the department’s Bureau of Land Management was selling coal leases at below-market prices. In a separate study of federal lands in the Powder River Basin in Montana and Wyoming, Tom Sanzillo, director of finance for the Institute for Energy Economics and Financial, found that taxpayers missed out on an estimated $28.9 billion in revenues over 30 years due to the failure of the DOI’s Bureau of Land Management to get fair market value for U.S.-owned coal mined in the region.

More: Trump administration refuses to close fossil fuel loophole, admits it will cost taxpayers millions

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