GOLDEN — Bureau of Land Management officials sought public input Tuesday on whether the agency should modify the federal coal program, notably by wrangling with the contentious issue of raising royalty rates for coal extracted on federal land.
State and federal officials came to the meeting — the fourth of five held nationally — armed with questions on how the agency approaches public-land coal mining leases.
The sessions resulted from a call from Interior Secretary Sally Jewell to consider “modernizing the federal coal program.”
In 2014, the BLM had 55 active coal leases in Colorado, covering 88,677 acres, according to . Coal energy production on public lands to the state’s economy, according to the BLM.
Industry and environmental groups alike have questioned the state’s lease practices and applications of royalty rates — 8 percent for coal developed underground and 12.5 percent for coal developed above ground.
Government audits claim that millions of taxpayer dollars because the BLM sold leases at below market value. Industry analysts say the calculations do not take into account export value, and coal industry members say the fees are .
“These are not simple issues that we are trying to deal with,” said Mike Connor, Interior deputy secretary, to the crowd of more than 100 people Tuesday.
During a nearly three-hour public comment period, about 50 people addressed the panel of officials who listened but did not comment. The sentiment was split between those backing the interests of the coal industry and those supporting a transition away from fossil fuels.
Keith Baker, a town trustee in Buena Vista, said he thinks climate change brought about by carbon emissions has hurt his southern Colorado town. The town, dependent on outdoor-focused tourism, has seen decreasing snowpack, a shorter snow season and a drying up of key irrigation, he said.
“Coal does have a cost, and we’re seeing that. And our small communities are having to deal with it,” Baker said.
Stuart Sanderson, president of the Colorado Mining Association, countered that argument. He said higher royalty costs would cripple an industry that contributes $2.8 billion to the state’s gross domestic product.
The industry has suffered and job losses because of environmental regulations, he said.
“Lower production means lower royalty payments,” he said. “Zero production means zero payments.”
Deck Sloan, Arch Coal Inc.’s senior vice president for strategy, said that although his and other companies shell out 20 percent of revenue in taxes under the federal coal program, the initiative is not broken. It generates billions in revenue for schools and infrastructure, he said.
To change it would be instilling a “thinly veiled and highly regressive energy tax,” he said.
Modernizing the program and royalties structure could generate additional revenues for a financially strapped state, said state Sen. Matt Jones, D-Louisville.
“We have been crushed in Colorado,” Jones said. “The Great Recession and the previous recession have driven our budgets to the floor.”
The BLM’s final listening session is scheduled for Thursday in Farmington, N.M.
Those interested in submitting written comments can do so by sending them to BLM_WO_Coal_Comments@blm.gov before Sept. 17.
Alicia Wallace: 303-954-1939, awallace@denverpost.com or twitter.com/aliciawallace
