U.S. senator to ask Congress to suspend coal sales

BILLINGS, Mont. — A U.S. senator said Tuesday he will ask fellow lawmakers to halt coal sales on federal lands in the West after a senior Obama administration official declined to suspend the troubled government program.

Massachusetts Sen. Ed Markey said the Interior Department moved too slowly on promised reforms since the Democrat raised concerns earlier this year that “bargain-basement” lease sales to a handful of mining companies might have cost taxpayers $200 million or more.

Investigators from the Government Accountability Office and the Interior Department have found a widespread lack of competition in the sale of coal leases on federal lands, including instances where federal officials accepted below-market bids. Problems with the program date to the 1980s, when a three-year moratorium was put in place while new leasing procedures were adopted.

The issue has grown more pressing as companies seek to ramp up coal exports to Asia, where coal prices can be much higher than in the U.S.

More than 40 percent of U.S. coal production, or about 450 million tons a year, comes from public lands leased by the government to mining companies under the century-old Mineral Leasing Act. Those leases bring in more than $1 billion in annual revenue.

In a letter released Tuesday by Markey and first reported by The Boston Globe, U.S. Bureau of Land Management Director Neil Kornze agreed that leasing reforms were needed.

But Kornze wrote to Markey that a suspension of sales was unnecessary with changes to regulations already in the works.

During the interim, Kornze said the BLM was working with Interior’s Office of Valuation Services to make sure fair-market value estimates are independently reviewed before sales are made. A protocol for those reviews could be developed before the end of the year.

No timeline was offered for other potential changes, including updating the fees coal companies pay to rent public land and the minimum bid the government can accept.

The Government Accountability Office found that almost 90 percent of the 107 coal tracts leased since 1990 received just a single bid.

Eben Burnham Snyder, a spokesman for Markey, said the agency’s response was noncommittal in terms of what reforms would be made and when. Snyder said Markey soon would introduce legislation to suspend the lease sales and do so again next session if the measure does not pass before the current session ends.

Luke Popovich with the National Mining Association said Markey’s prospects for convincing Congress to halt sales were dim given widespread support for the coal industry in Congress. Popovich said the BLM had handled coal leases in a responsible way.

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