DENVER – Coal-industry supporters had a large presence Tuesday near Denver, urging federal officials not to change how the government collects royalties on coal mined from federal land.
Environmental groups – who also spoke at the listening session, hosted by the Bureau of Land Management – countered, suggesting that “coal should be kept in the ground,” pointing to concerns with climate change.
The two sides clashed, as mining issues take front stage in Southwest Colorado, after the abandoned Gold King Mine near Silverton poured an estimated 3 million gallons of mining wastewater into the Animas River after an accidental breach at the mine by the Environmental Protection Agency on Aug. 5.
But it was the coal industry’s supporters who dominated the first two hours of the three-hour listening session.
They wore “I dig” pins and suggested that the burden of paying more royalties to the government would further diminish the coal industry, leaving no royalties for taxpayers to enjoy and a spike in energy prices.
“Lower production means lower royalties, zero production means zero royalties,” said Stuart Sanderson, president of the Colorado Mining Association.
He pointed out that in Colorado, the coal industry has contributed more than $2.8 billion to Colorado’s Gross Domestic Product. Coal mining generates direct employment of 6,200 and more than 21,000 jobs in Colorado.
But the industry has felt increasingly attacked by President Barack Obama’s administration. They are bracing for a new mandate that requires carbon-dioxide emissions to be reduced by 28 percent in Colorado and 32 percent nationally by 2030.
The Interior Department is examining ways to collect higher royalties, stating, “In the fair return context, concerns have been expressed that royalty rates are too low and that the program’s processes do not reflect current market conditions.”
About 40 percent of coal mined every year in the United States comes from leases on federal land.
Over the past 10 years, the BLM has managed the production of up to 5.1 billion tons of coal, worth more than $72 billion.
The production generated $7.9 billion in royalties, and nearly $4 billion in revenues from rent, bonuses and payments.
Critics of the program say the BLM leases most federal coal for less than $1 per ton, while companies sell the coal for at least $10 per ton. Coal companies owe the government a 12.5 percent royalty on the sale of coal from federal lands.
But companies have employed strategies that allow them to first sell coal to a subsidiary at below-market prices to minimize the initial sales price and royalties associated with it.
“BLM has a fiduciary responsibility to taxpayers to make sure they are fully compensated for the sale of all public resources,” said Autumn Hanna, senior program director for Washington, D.C.-based Taxpayers for Common Sense. “In the face of an $18 trillion federal debt, taxpayers can afford nothing less.”
pmarcus@durangoherald.com