Taxpayers lose millions as coal leases draw only one bid and payments aren't collected

The Department of the Interior is failing to collect tens of millions of dollars in lease payments for coal mining on federal land, and the department's Bureau of Land Management is shortchanging the government money while allowing a handful of business to have a monopoly in the Powder River Basin in Wyoming and Montana, according to a report released Tuesday, reports John Broder for The New York Times. (National Mining Association photo: Powder River Basin coal)

Despite a rule adopted in the 1980s to ensure competition, the report found that 80 percent of sales in the past 20 years had received only one bid, reports Broder. "The report said the process for computing the value of the leases was faulty, costing the government millions. At the current rate of coal leasing, the inspector general found, every penny-a-ton undervaluation costs taxpayers $3 million."

The report also found that the BLM allows coal companies "to expand their lease holdings by as much as 960 acres with no competitive bidding and little oversight" and has "approved 45 such lease modifications since 2000 without adequate documentation, potentially costing taxpayers $60 million," Broder notes.

An independent study conducted last year found that Interior's failure to secure fair market value for coal mined on public lands had deprived taxpayers of almost $30 billion over the previous 30 years, reports Broder. The department disputes that figure. The full report can be viewed here.