Institute for Policy Integrity

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Reconsidering Coal’s Fair Market Value

Reconsidering Coal’s Fair Market Value

The Social Costs of Coal Production and the Need for Fiscal

By Jayni Foley Hein and Peter Howard
October 5, 2015

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Filed under Climate Change and Energy Policy, Natural Resources, Reports

The federal coal leasing program is not structured to ensure that taxpayers receive “fair market value,” as the law requires, for coal extracted from public lands. Recent investigations have shown that coal companies exploit loopholes to avoid paying their fair share of royalties, costing taxpayers up to $1 billion each year in lost revenue. Outdated fiscal policies fail to remedy uncompetitive bidding practices or properly account for coal’s export value. And central to the recommendations in this report, Interior’s fiscal terms do not account for the prevalent environmental externalities and option values associated with coal production that impose uncompensated costs on the public.