Public lands and private coal

To everything, a beginning. The development of coal-export facilities, such as the proposed Gateway Pacific Terminal at Cherry Point, has its beginning in the insular world of single-bid coal leases.

According to the Government Accountability Office, in 2012 42 percent of the 1 billion-plus tons of coal produced in the Unites States were mined from coal tracts leased from the Bureau of Land Management’s federal coal-leasing program, largely in the Powder River Basin of Montana and Wyoming. A GAO report released Tuesday underscores the disjointed methodology of BLM bureaucrats when determining the fair market value of coal from the leased tracts.

There is an outrage factor because low-balling the fair market value rips off the American taxpayer, with lease revenue generated from royalties collected when the coal is sold.

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The report also reveals a bureaucratic culture that, intentional or not, telegraphs a cozy public-private MO that positions Big Coal ahead of the public interest.

“GAO found that BLM did not consistently document the rationale for accepting bids that were initially below the fair market value, pre-sale estimate,” the report reads. “Furthermore, some state offices were not following guidance for review of appraisal reports, and no independent review of these reports was taking place.” BLM doesn’t tap a resource available to it for third-party reviews, namely the Office of Valuation Services, which, like the BLM, falls under the U.S. Department of Interior.

Last week Oregon Rep. Pete DeFazio and Massachusetts Sen. Ed Markey issued a joint statement. “Given the lack of market competition in coal leases, if the fair market value set by Interior is low, it can lead to significant losses for taxpayers. For instance, for every cent per ton that coal companies decrease their bids for the largest coal leases, it could mean the loss of nearly $7 million for the American people,” they write.

Over time, the loss to taxpayers has been in the $30 billion range.

Markey displays sober judgment, calling for a temporary suspension of the federal coal-leasing program. The GAO is more conservative in its recommendations, insisting on more than one approach when appraising lease values as well as ensuring greater transparency by requiring the program to publish information on its website about past lease sales.

In a few years, the long narrative that begins with single-bid coal leases on public lands, bolstered by East Asia’s big appetite for North American coal (and a corresponding domestic drop in demand), could spell 24 coal trains a day at a railroad crossing near you.

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THis is an editorial cartoon by Michael de Adder . Michael de Adder was born in Moncton, New Brunswick. He studied art at Mount Allison University where he received a Bachelor of Fine Arts in drawing and painting. He began his career working for The Coast, a Halifax-based alternative weekly, drawing a popular comic strip called Walterworld which lampooned the then-current mayor of Halifax, Walter Fitzgerald. This led to freelance jobs at The Chronicle-Herald and The Hill Times in Ottawa, Ontario.

 

After freelancing for a few years, de Adder landed his first full time cartooning job at the Halifax Daily News. After the Daily News folded in 2008, he became the full-time freelance cartoonist at New Brunswick Publishing. He was let go for political views expressed through his work including a cartoon depicting U.S. President Donald Trump’s border policies. He now freelances for the Halifax Chronicle Herald, the Toronto Star, Ottawa Hill Times and Counterpoint in the USA. He has over a million readers per day and is considered the most read cartoonist in Canada.

 

Michael de Adder has won numerous awards for his work, including seven Atlantic Journalism Awards plus a Gold Innovation Award for news animation in 2008. He won the Association of Editorial Cartoonists' 2002 Golden Spike Award for best editorial cartoon spiked by an editor and the Association of Canadian Cartoonists 2014 Townsend Award. The National Cartoonists Society for the Reuben Award has shortlisted him in the Editorial Cartooning category. He is a past president of the Association of Canadian Editorial Cartoonists and spent 10 years on the board of the Cartoonists Rights Network.
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