[Congressional Record (Bound Edition), Volume 160 (2014), Part 2]
[Senate]
[Pages 2355-2356]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   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

[[Page 2356]]

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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