Trump’s loyalty to coal is bad for taxpayers

A Colorado mine is an example of industry benefiting at the public’s expense.

 

Ted Zukoski is a Contributor to Writers on the Range, the opinion service of High Country News. He is an attorney with Earthjustice, a national nonprofit environmental law organization.


Donald Trump made it clear during his campaign that he wouldn’t accept the well-established science around the global threat of climate change, and that he would seek to resurrect the dying and deadly coal industry and bring back mining jobs.

The president’s talk of bringing back a 1950s economy for the 21st century thinly disguises an agenda that’s pro-corporation but also anti-worker. Removing health-based protections by gutting regulations, and replacing scientists with industry lobbyists at the Environmental Protection Agency will burden the lives of ordinary Americans. A lot of this has been covered in the media. But what’s been largely overlooked is the way Trump is boosting the coal industry on the backs of American taxpayers, transferring wealth to coal CEOs and investors in the process.

This effort became evident in one of Trump’s executive orders, which lifted the Obama administration’s moratorium on coal leasing on public lands — a moratorium designed to allow the Interior Department to bring the program into this century. Trump’s order gutted a process meant to ensure that the coal-leasing program, last revised in the 1980s, generates a fair return for Americans and protects the environment.

That reform is badly needed because, as David Roberts of Vox News recently explained, there is now little or no meaningful competitive bidding for federal coal leases. No clear procedures exist for balancing the public’s interest in environmental protection under the law against the industry’s interest in cheap coal. And royalties paid by the industry for the coal mined on public lands are so far below market value, taxpayers are losing an estimated $1 billion per year.

Reports from the independent Government Accountability Office and the Interior Department’s Office of Inspector General, as well as former President Obama’s Council of Economic Advisers, confirmed these significant flaws.

In throwing out the review of the coal program, the Trump administration has replaced a public effort to consider how to improve returns to taxpayers with the creation of a Federal Royalty Policy Committee. One observer has concluded that this new committee will likely be stacked with industry representatives and operate behind closed doors.

The probable outcome: Coal companies will keep their subsidies, and taxpayers will lose. That’s a reasonable fear, given Interior Secretary Ryan Zinke’s recent Utah road show to gather input on the future of the magnificent Bears Ears National Monument. Zinke palled around with monument opponents and turned a deaf ear to those seeking to preserve the area from mining and desecration, including members of five Native American tribes.

The West Elk Mine has some of the highest operating profit margins of Arch Coal's mines.
WildEarth Guardians/Flickr

Another egregious example of the coal industry benefitting at taxpayer expense is the effort by Trump’s Forest Service to approve Arch Coal’s plan in western Colorado to expand the company’s West Elk Mine into untouched roadless lands of the Gunnison National Forest. The area is prime habitat for black bear, elk, lynx and cutthroat trout.

Because the underground mine must release methane, Arch Coal plans to bulldoze over six miles of road and scrape up to 48 drilling pads to build methane vents. In effect, coal mining will create a spider-web of roads and industrial facilities in what is now a remote, wild landscape 40 miles southwest of Aspen, Colorado. The lease the Forest Service proposes to approve will give Arch Coal access to 19 million tons of coal, extending the life of the West Elk Mine by three to four years.

But public lands won’t be the only subsidy to benefit Arch Coal. That’s because Arch has also asked the Bureau of Land Management to trim the royalty it pays the federal government, the state and Gunnison County for the coal at issue by more than a third, from 8 to 5 percent. This is a request the Trump administration is likely to smile upon.

Arch told BLM it needs to pay taxpayers less because the company faces economic challenges in mining at West Elk, and that it couldn’t mine economically without a royalty cut. But that claim isn’t credible. The company has repeatedly reported to shareholders that the West Elk Mine has among the highest operating profit margins of Arch’s mines. And the rate reduction would be in large part retroactive, meaning Arch will get a tidy sum for years of mining it has already completed on the absurd grounds that it couldn’t otherwise mine the area profitably.

This is the kind of tax-funded corporate giveaway that the review of the coal program, torpedoed by the Trump administration, was meant to prevent. Taxpayers must press Zinke to insist that the review of outdated coal-leasing policies is undertaken and that the people’s interests are represented. Without that review, more taxpayer dollars, and not just tons of coal, may go up in smoke.

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