Column: New Mexico deserves a fair share of coal profits
Last month I was very proud of my new community here in Farmington. Over a hundred people turned out to make our voices heard at a listening session hosted by the Bureau of Land Management on the federal coal lease program. This troubled program has cost taxpayers up to $30 billion over the last 30 years, according to some estimates, and as a nurse I can tell you it also puts the health of our community at great risk.
The BLM leases public lands to coal companies to mine and sell coal, including Navajo Mine on tribal lands and San Juan Mine in New Mexico. But because the government undervalues this coal so dramatically, taxpayers are losing out on billions of dollars that could fund schools, roads, and other local priorities.
Another way the coal industry shirks its obligation to local communities is by taking advantage of loopholes in BLM's rules. These loopholes allow coal companies to sell coal to their own subsidiaries at below-market rates, and then base the royalties they pay to states like New Mexico on these lower prices. Then their subsidiary company can sell our publicly-mined coal to buyers at market rates, robbing taxpayers of their fair share of these sales. In 2011 alone, this single loophole allowed coal companies to pocket an additional $40 million on coal exports just in the Powder River Basin — money that should have gone to fund taxpayer priorities in Farmington and the surrounding region.
Coal companies are also not required under the program to set aside funds to clean up public lands after they are done mining. This leaves taxpayers on the hook for potentially huge cleanup costs for incidents like the recent Animas River Spill.
Sixty three people spoke at the BLM listening session, and only three of them opposed reforming the program. The rest of us were united: BLM must ensure that it collects fair returns for taxpayers, provides transparency and assesses the climate impacts of mining coal.
The royalty on surface-mined coal should be raised from 12.5 percent to match the rate for offshore oil and gas, currently set to 18.75 percent. The Department of the Interior should update regulations to establish minimum bids for each coal region. Currently, by the BLM's own admission, the current minimum bid of $100 per acre is not at fair market value.
Regulations that protect taxpayers from subsidizing the business costs of cleanup must be implemented. Combined with closing the loopholes that allow coal companies to sell coal through subsidiaries, these measures will ensure that taxpayers are not subsidizing the business costs of coal companies.
One of the other problems with undervaluing this coal is that it effectively creates a coal industry subsidy, propping up otherwise unprofitable coal burning power plants like Four Corners and San Juan Generating Station. It's been only a few months since I joined the Farmington community from my home in Indiana, but already I have seen the devastating health consequences of these coal plants. Just the Four Corners plant alone contributes to 42 heart attacks, 26 visits to the ER for asthma and 28 deaths each year. And there are other health consequences that are harder to tie to coal burning, but clear to me as a medical practitioner. And the federal coal lease program worsens that burden by artificially decreasing the price of coal on the market.
This problem has gone on for over 30 years, and the time has come to fix it. We must reform the federal coal lease program to ensure a fair share of coal mining profits for taxpayers and protect the health of our communities.