Report: Changing times for coal call for new price calculations – Public News Service, July 25, 2014

July 25, 2014

Categories: Coal, Congress, News, Northern Plains Resource Council

http://www.publicnewsservice.org/2014-07-25/energy-policy/report-changing-times-for-coal-call-for-new-price-calculations/a40733-1

Deborah Courson Smith

HELENA, Mont. – It’s been called “outdated,” and a new report from the Sightline Institute shows how being behind the times means Montana is missing out on coal cash.

A U.S. Government Accountability Office report earlier this year criticized the Bureau of Land Management for how it sets “fair market value” for coal, and Sightline report author Clark Williams-Derry said the bottom line is that the market has changed, especially in the West, where coal companies are marketing coal for export.

“Some of them are even cutting back on domestic sales and focusing production from particular mines that are good for export,” he said. “You can it in Montana. You can see pieces of it in Wyoming and Colorado and Utah.”

Historically, Williams-Derry said, coal was priced low in order to keep electricity production strong and cost-effective for consumers. However, domestic coal demand has been falling, which is why companies are looking to sell overseas.

Williams-Derry said the BLM needs to reset its standards for calculating prices and determine where the coal is going when deciding its “fair market value.”

“A comprehensive study that looks at how exports affect market dynamics in general,” he said, “and then, narrower studies for different mines.”

In general, coal sales are split 50-50 between the federal government and the state where the coal was mined. The report was produced in collaboration with the Western Organization of Resources Councils and the Northern Plains Resource Council.

The report: “Unfair Market Value: By Ignoring Exports, BLM Underprices Federal Coal,” is online at sightline.org. The GAO report is at gao.gov.

 

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