In­te­rior Depart­ment scrap­ping rule on coal roy­al­ties from Obama era

The Washington Times Daily - - POLITICS - BY MATTHEW DALY

The In­te­rior Depart­ment said Mon­day it is scrap­ping an Obama-era rule aimed at en­sur­ing that coal com­pa­nies don’t short­change tax­pay­ers on huge vol­umes of coal ex­tracted from pub­lic lands, pri­mar­ily in the West.

The Trump ad­min­is­tra­tion had put the rule on hold af­ter min­ing com­pa­nies chal­lenged the reg­u­la­tion in fed­eral court. Mon­day’s ac­tion re­peals the Obama-era rule and be­gins a process seek­ing pub­lic com­ments on whether to change the way the gov­ern­ment val­ues coal mined on fed­eral lands.

In­te­rior Sec­re­tary Ryan Zinke de­scribed the re­peal as another sign the Trump ad­min­is­tra­tion has stopped what it saw as a “war on coal” by the fed­eral gov­ern­ment.

Pres­i­dent Trump lifted a mora­to­rium on the sale of coal min­ing leases on fed­eral lands last week and rolled back Obama-era reg­u­la­tions aimed at curb­ing cli­mate-chang­ing emis­sions from coal­fired power plants.

“We need re­li­able, af­ford­able and abun­dant en­ergy,” Mr. Zinke said at a cer­e­mony last week mark­ing the end of the coal mora­to­rium. “En­ergy in­de­pen­dence is what makes us strong.”

The process of set­ting roy­alty rates for coal and other en­ergy sources “needs to be fair — not ar­bi­trary — and make sure that the tax­payer at the end is the win­ner,” Mr. Zinke said.

He promised that coal roy­alty rates set un­der his lead­er­ship will be “trans­par­ent” and vowed to treat en­ergy com­pa­nies in the same way Pres­i­dent Ron­ald Rea­gan treated the Soviet Union: “Trust but ver­ify.”

Mon­day’s ac­tion re­peals an Oba­maera change aimed at en­sur­ing that coal com­pa­nies don’t short­change tax­pay­ers on coal sales to Asia and other mar­kets. Coal ex­ports surged over the past decade even as do­mes­tic sales de­clined.

Rules in place since the 1980s have al­lowed com­pa­nies to sell their fuel to af­fil­i­ates and pay roy­al­ties to the gov­ern­ment on that price, then turn around and sell the coal at higher prices, of­ten over­seas.

Un­der the now-re­pealed rule, the roy­alty rate would have been de­ter­mined at the time the coal is leased, with rev­enue based on the price paid by an out­side en­tity, rather than an in­terim sale to an af­fil­i­ated com­pany.

Con­ser­va­tion­ists crit­i­cized the Trump ad­min­is­tra­tion’s move, call­ing it a “sweet­heart deal” for the in­dus­try that will de­prive states of much-needed rev­enues. About half the coal roy­al­ties col­lected by the fed­eral gov­ern­ment is dis­bursed to states in­clud­ing Wy­oming, Mon­tana, Colorado, Utah and New Mex­ico.

Demo­cratic law­mak­ers and watch­dog groups have long com­plained that tax­pay­ers are los­ing hun­dreds of mil­lions of dol­lars an­nu­ally be­cause roy­al­ties on coal from pub­lic lands were be­ing im­prop­erly cal­cu­lated.

AS­SO­CI­ATED PRESS

In­te­rior Sec­re­tary Ryan Zinke de­scribed the re­peal on coal roy­al­ties as another sign the Trump ad­min­is­tra­tion has stopped a “war on coal” by the fed­eral gov­ern­ment.

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