THE ECONOMICS OF COAL LEASING ON FEDERAL LANDS: Ensuring a fair return to taxpayers.
The report Economics on Coal Leasing find the U.S Federal coal leasing program accounted for nearly 40 percent of coal production in the United States in 2015, including some of the lowest- cost coal available. While the program brings in hundreds of millions of dollars of government revenue every year, it has been widely criticized in recent times by economic and environmental experts for providing a poor return to the taxpayer and for not adequately addressing the environmental costs of coal extraction, processing, and combustion. In January 2016, U.S. Department of the Interior began the first programmatic review of the Federal coal leasing program in 30 years in order to address a range of issues, including the return to the taxpayer and coal leasing impacts on the environment.
This report examines the market implications of changing royalty rates based on three potential approaches motivated by the current structure of the coal market. It examines the economics of the current coal leasing program in the United States, with a focus on ensuring a fair return to the taxpayer from the Federal coal leasing program.