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The Federal Coal Program

Reforms are needed to fix an outdated federal coal program, explains the author.

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idea light bulbThe United States’ federal coal-leasing program has existed for nearly a century, beginning with the enactment of the Mineral Leasing Act of 1920. The U.S. Department of the Interior’s Bureau of Land Management, or BLM, oversees this longstanding program, which encompasses both surface and underground coal-mining activities on federal lands. Since its inception, however, the federal coal program has been laden with oversight challenges, scandal, and controversy.

Currently, approximately 40 percent of all U.S. coal is mined on federal lands, with almost 90 percent of this coal originating in the Powder River Basin, or PRB, which stretches across Wyoming and Montana. Although BLM collects more than $1 billion annually in bonus bids and royalty revenues from coal-mining operations on federal lands, the government is not collecting the full value of this coal owed to U.S. taxpayers. In fact, in 2013, both the Department of the Interior’s, or DOI, inspector general and the Government Accountability Office, or GAO, issued reports assessing the DOI’s coal-leasing program and discovered a lease sale process that is largely noncompetitive and reliant on a valuation system that is not transparent and potentially open to industry manipulation. At the root of this problem is an outdated and broken program, governed by regulations that have not been updated in more than 25 years, and a flawed decision to decertify every major federal coal region in the country, including the PRB, which has made certain reforms to the coal program essentially meaningless.

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