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“FEDERAL COAL PROGRAM INVESTIGATION” mentioning the Department of Interior was published in the Senate section on pages S699-S700 on Feb. 3, 2014.
The publication is reproduced in full below:
FEDERAL COAL PROGRAM INVESTIGATION
Mr. MARKEY. Mr. President, the coal under our Federal public lands is a tremendously valuable asset that belongs to the American people. For nearly my entire career in Congress, I have been working to ensure that we do not shortchange taxpayers by giving this asset away to the coal companies for bargain-basement prices. As we are facing Federal deficits and budget cuts for programs that benefit hard-working, middle-class families, we need to ensure more than ever that we are not giving a windfall to coal companies on the backs of taxpayers in Massachusetts and across the Nation by selling this public coal for less than it is worth.
In 1982, following coal lease sales by the Department of the Interior on public lands in the Powder River Basin, PRB, in Wyoming and Montana, I asked the Government Accountability Office, GAO, to investigate whether taxpayers had received a proper return in these lease sales. The GAO found that this Federal coal was sold for pennies on the dollar. The GAO report concluded that the Interior Department had sold this public coal in the Powder River Basin for $100 million less than it was worth. Following that revelation, there were a number of recommendations made to reform the Federal coal leasing program and ensure that taxpayers were protected. Unfortunately, I have concerns that similar problems with the Federal coal program may persist today at the expense of taxpayers in Massachusetts and around the country.
This week, I am releasing a new public GAO report on the Federal coal leasing program. This is the first time in 20 years that the GAO has evaluated this program and it is well overdue.
The findings in the latest GAO report highlight the fact that there still is a lack of competition for Federal coal leases. This dearth of competition amongst coal companies means that it is the Interior Department, and not the market, that is ensuring a fair price is set for these valuable resources. To give you an idea of the magnitude of this issue, 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. We have to act to correct the issues identified in the report and make sure national resources are not being given away at below market prices.
The GAO has found that the Interior Department is not properly considering the potential of future exports of this coal from Federal leases. These coal leases are issued for 20 years and can be further extended. Coal exports for electricity generation in other countries have doubled in just a few years. Companies want to sell U.S. coal overseas to China and European markets to increase their profits. If we are not properly valuing the possibility that coal exports to higher priced markets will continue to increase, we risk not only costing taxpayers money but also exacerbating climate change by, in effect, subsidizing coal companies to send more coal abroad to be burned in dirty power plants.
Moreover, the GAO has concluded in its public report that the Interior Department lacks transparency and is not providing sufficient information to the public on the Federal coal leasing program. I am extremely concerned that a lack of transparency and public information for the American people and for the Congress is inhibiting proper oversight of this important program to protect taxpayers.
When I was serving as ranking member of the House Natural Resources Committee, I began an oversight inquiry into the Federal coal leasing program in July 2012. While the Department has provided me, and my staff has reviewed, hundreds of pages of leasing documents, certain critical information necessary to properly evaluate this program has been withheld. As a result, the Interior Department is not providing information on the Federal coal program to the Congress in a way that allows for proper oversight. While the intent of this restriction may be to protect the integrity of future lease sales, the effect is to hamper congressional oversight.
As part of its investigation, the GAO released two reports to me, one that is public and one that is not able to be made public. GAO kept one of these reports nonpublic because the Interior Department believes that the proprietary information contained in the nonpublic report could harm the integrity of future lease sales. I believe that increased transparency with these coal lease sales would increase the integrity of the process, not lessen it. It would be very helpful for the American people to be able to review this information. But even if that is not possible because of concerns about proprietary information, Senators should be able to review this information and debate it in order to ensure that taxpayers are protected. Unfortunately, we are not able to have that debate on the floor of the Senate for the American people. That is wrong and very troubling.
It is concerning to me that an agency would seek to withhold this sort of information from Congress. Without this information, we cannot make a legislative decision about whether the statutes governing coal leasing on Federal lands are working as intended and whether the Department is administering them properly.
Based on my staff's examination of the materials provided to me by the Department and included in the nonpublic report issued to me by the GAO, it appears that the Interior Department may be consistently undervaluing Federal coal leases. The GAO report found that the Interior Department is using information that is outdated in valuing coal leases. Based on the examination of the materials provided to me, I believe that this problem may be even greater than stated in the GAO report. I am concerned that the Department may be using extremely outdated information and boilerplate analysis that does not reflect current market conditions.
These are tremendously serious problems. Based on my staff's examination of the materials, I believe that using appropriate market calculations and assumptions in some recent coal lease sales could potentially have yielded $200 million more for the American people and possibly hundreds of millions of dollars more.
Therefore, I am transmitting two letters to the Interior Department, one that I am able to release publicly and one that I cannot, which seek answers to how the Department will respond to the recommendations in the GAO report and other issues involved in Federal coal leasing. I believe that until the questions and issues that I have raised in my letters to the Department are properly addressed to guarantee sufficient taxpayer protections are in place, the Interior Department should temporarily suspend further Federal coal leasing. I will also be introducing legislation in the future to reform the Federal coal program to guarantee a fair return for the American people.
Congress needs to be able to conduct the necessary oversight to ensure that the problems we have seen in the Federal coal program in the past do not continue. Until that happens we cannot assure taxpayers in Massachusetts and every State that they are getting a fair return on this public resource that they own. Until that happens, we lack the assurances that we are not subsidizing coal companies to increase carbon pollution by sending our coal overseas. It is time for the Congress to be able to conduct the oversight of this program that is required.
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