New Budget Keeps Dangerous Coal Subsidies in Place, Senator Warns


Secretary of the Interior Sally Jewell faced off with Conservative lawmakers on Tuesday over the administration’s proposed limits on drilling in places like Alaska. But beneath the fossil fuel-funded outrage coming from the right, a lone Democratic Senator raised criticism about a department policy that amounts to a multi-million dollar annual subsidy to coal barons.

“I wanna bring up something that is missing in the budget,” said Sen. Maria Cantwell (D-Wash.), pressing Jewell during a Senate energy committee hearing on the president’s 2016 department budget proposals.

“You can typically lease a ton of coal off federal land for one dollar or less,” the senator said, referring to the Bureau of Land Management’s federal coal leasing program that allows private refiners to purchase publicly-owned coal at well-below market value.

“The taxpayer gets one dollar,” she said. “Then years later we have to deal with almost two tons of carbon dioxide from that one ton of coal and the government current best guess is that two tons of carbon pollution will cost the America public over 70 dollars in damages.”

Since 2009, the Obama administration has leased 2.2 billion tons of publicly owned coal at an average price of $1.03 per ton, according to a 2014 study by Greenpeace. The lending program accounts for 40 percent of US coal extraction, buoying lucrative fossil fuel exports around the world and increasing carbon emissions during a time when the administration, Democratic lawmakers, and an overwhelming consensus of climate scientists speak about the need curb fossil fuel pollution.

Greenpeace estimates that the billions of tons of coal leased off public lands is responsible for nearly 4 billion tons of carbon pollution at a social cost of as much as $530 billion over the next several decades.

“Our fossil fuel leasing laws were passed long ago before we knew how bad these impacts were,” Cantwell said. She referenced past statements in which Jewell had talked about reforming the program, but Cantwell admitted that she’s “concerned that the discussion ends there.”

The Secretary responded that a rule to change the leasing program was released last month, and is open for public comment until May. She said that it’s unlikely the rule would be finalized by the end of the year, but that the department is still “focused on getting it done.”

The Government Accountability Office and the Interior Department’s inspector general have both criticized the department’s coal leasing program, focusing their assessments on the lack of returns for the taxpayer rather than the environmental impacts of the regime. In 2013, the Interior IG attributed the low-cost of publicly owned coal to the lack of competitive bids. More than 80 percent of sales over the previous twenty years received only one bid, the IG found, noting that the taxpayer misses out on $3 million in revenue for every penny per ton below the market rate that the coal is sold.

A separate study by the Institute for Energy Economics and Financial Analysis found that fire-sale price of public coal has cost taxpayers nearly $29 billion over the last thirty years.

At the hearing, the main focus of lawmakers, particularly conservative senators, was the administration’s recent actions related to fossil fuel production in Alaska.

In January, President Obama designated millions of new acres in the Arctic National Wildlife Refuge as wilderness, protecting it from further energy production. A new rule proposed last week by the Interior Department—one that would require companies drilling in the Arctic Ocean to keep back up rigs on location in case of oil spills–further raised the ire of industry groups.

Sen. Lisa Murkowski (R-Alaska), the chairwoman of the Senate energy committee, said the decisions from interior have “lacked balance” and have “enabled an unprecedented attack on [Alaska’s] ability to responsibly bring these resources to market.”

The Sentinel previously reported on charged comments made by the Senator from Alaska. In January she described the administration’s action a declaration of war on the state.

She’s promised to use her gavel on the committee to demand changes to the president’s proposed Interior Department budget, even threatening to make significant cuts that could lead to thousands of jobs lost around the country.

“Well, if budgets are reduced and people lose their jobs, then that is an outcome,” Alaska Dispatch News reported Murkowski saying. “But the land is the land, and that’s what I am here to protect, and the people of the state of Alaska and their right to access the lands,” she added.

In the 2014 election cycle, Murkowski received more than one million dollars in campaign contributions from oil and gas companies and electric utilities.

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Sam Sacks worked on the Hill as a Congressional staffer, and as a writer and reporter since 2008. He’s been published in Hustler Magazine, which you may have seen but don’t want to admit.


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