Senators call for coal export probe

The leaders of the Senate Energy and Natural Resources Committee want to investigate claims that mining firms are dodging government royalty payments on coal excavated from federal and tribal lands.

Chairman Ron Wyden (D-Ore.) and ranking member Sen. Lisa Murkowski (R-Alaska) cited Reuters reports that mining firms low-ball the value of coal when selling to traders and marketers. 

Reuters indicated some of the mining firms own those intermediaries, which then sell the coal at higher rates abroad.

“This is so obvious it shouldn’t need to be said: Coal companies need to be paying taxpayers all of the money they are owed,” Wyden said in a Friday statement.

The senators sent a letter Thursday asking Interior Secretary Ken Salazar to look into the practice.

“Because royalties from federal coal are shared with the states in which that coal is mined, affected states may also be losing millions of dollars of revenue,” the senators wrote.

Much of the coal in question was mined at the Powder River Basin in Montana and Wyoming.

Coal firms want to construct export terminals in Washington and Oregon to send Powder River Basin coal to Asia, where the continent’s demand for it is expected to increase with its population.

Wyden’s office stated the domestic price of coal mined from the Powder River Basin is about $13 per ton, compared with about $30 per ton internationally. That would create a royalty shortfall to the federal government of about $2 per ton.

With coal royalty revenues amounting to $898 million in 2011, Wyden and Murkowski said the export trend required federal regulators to look into the allegations more closely.

“As companies seek to ship more coal overseas, taxpayers must be confident that the Bureau of Land Management and the Office of Natural Resources Revenue have stringent royalty collection and auditing controls in place as coal markets become increasingly oriented toward international buyers,” the senators wrote.