Liberal group: Higher leasing fees would help coal country

A progressive group is blaming outdated rules on federal coal leasing for the decline of Appalachian coal country.

The Center for American Progress (CAP) says fees for private companies mining coal on federal land, such as the Powder River Basin in Wyoming and Montana, haven’t been updated in decades and create an unfair competitive edge for the companies that mine there.

{mosads}The group wants the federal Interior Department to charge more for coal leases and direct some of the money to hard-hit Appalachian communities that have suffered from the decline of the coal industry there, said former Ohio Gov. Ted Strickland (D), a counselor for CAP.

“The unfair situation has developed as a result of, basically, federal subsidies to coal companies that mine coal in the western part of the country, especially in the Powder River Basin coalfields, which are located in Montana and Wyoming,” Strickland told reporters Monday.

“We believe that because the coal mined from these western coalfields is extracted at royalty levels that have not been increased in some 40-plus years, that that has resulted in unfair competition to coal that is mined in Appalachia.”

CAP released a report Monday outlining its objections to the federal program. It includes two similar proposals to make lease and royalty rates more closely reflect the fair market value of coal.

CAP estimated that the federal government has missed out on about $5 billion in the last five years due to its outdated fee system.

The proposals could bring in millions of dollars a year, with half going to the states where the coal is mined and half going to Appalachia, “to provide economic development, job training, and employment assistance in Appalachian communities,” CAP said.

Strickland is considering running for the Senate against Rob Portman (R-Ohio) in 2016, and said he would decide by the end of the month whether to run. But he insisted that his push for coal policy changes is not related to a potential campaign.

Rep. Matt Cartwright (D-Pa.) said he will put some of CAP’s suggestions into a proposed bill.

“What my bill is going to do is to eliminate loopholes that right now are allowing private coal companies to game the system,” Cartwright said. “By directing this revenue to the Appalachian region, 13 states will benefit from increased employment and economic development opportunities.”

Brad Markell, executive director of the industrial union council at AFL-CIO, said CAP’s proposals have support from labor.

“We know that the Appalachian region has suffered from a bad economy for a long, long time,” Markell said. The proposal “raises the kind of money that can really be directed to really change economies in the places where the coal industry is not providing the number of jobs that it has in the past.”

The Interior Department declined to comment on the proposal. But the agency in December formally launched an effort to examine whether it needs to update its rules regarding federal coal production.

Ohio’s coal industry criticized the plan and Strickland, labeling him as anti-coal for supporting the Obama administration’s limits on carbon emissions from coal-fired power plants.

“Ted Strickland has always liked to claim that he supports Ohio’s coal industry, but he has done just the opposite,” Christian Palich, interim president of the Ohio Coal Association, said in a Facebook post.

If he runs for Senate in 2016, “Strickland will have a lot to answer to Ohio’s coal voters on why he betrayed the people he used to represent in Congress and why he has been getting paid by a liberal Washington think tank for the past few years to advocate policies that are bad for Ohio coal, as well as anyone who turns on a light switch.”