U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

81–894 PDF 2014

MINING IN AMERICA: POWDER 

RIVER BASIN COAL MINING, 

THE BENEFITS AND CHALLENGES

OVERSIGHT HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY AND 

MINERAL RESOURCES

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

FIRST SESSION

Tuesday, July 9, 2013

Serial No. 113–29

Printed for the use of the Committee on Natural Resources

(

Available via the World Wide Web: http://www.fdsys.gov 

or 

Committee address: http://naturalresources.house.gov 

(II)

COMMITTEE ON NATURAL RESOURCES

DOC HASTINGS, WA, Chairman 

EDWARD J. MARKEY, MA, Ranking Democratic Member

Don Young, AK 

Louie Gohmert, TX 

Rob Bishop, UT 

Doug Lamborn, CO 

Robert J. Wittman, VA 

Paul C. Broun, GA 

John Fleming, LA 

Tom McClintock, CA 

Glenn Thompson, PA 

Cynthia M. Lummis, WY 

Dan Benishek, MI 

Jeff Duncan, SC 

Scott R. Tipton, CO 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Steve Southerland, II, FL 

Bill Flores, TX 

Jon Runyan, NJ 

Mark E. Amodei, NV 

Markwayne Mullin, OK 

Chris Stewart, UT 

Steve Daines, MT 

Kevin Cramer, ND 

Doug LaMalfa, CA 

Jason T. Smith, MO 

Peter A. DeFazio, OR 

Eni F. H. Faleomavaega, AS 

Frank Pallone, Jr., NJ 

Grace F. Napolitano, CA 

Rush Holt, NJ 

Rau ́l M. Grijalva, AZ 

Madeleine Z. Bordallo, GU 

Jim Costa, CA 

Gregorio Kilili Camacho Sablan, CNMI 

Niki Tsongas, MA 

Pedro R. Pierluisi, PR 

Colleen W. Hanabusa, HI 

Tony Ca ́ rdenas, CA 

Steven A. Horsford, NV 

Jared Huffman, CA 

Raul Ruiz, CA 

Carol Shea-Porter, NH 

Alan S. Lowenthal, CA 

Joe Garcia, FL 

Matt Cartwright, PA

Todd Young, Chief of Staff 

Lisa Pittman, Chief Legislative Counsel 

Jeffrey Duncan, Democratic Staff Director 

David Watkins, Democratic Chief Counsel 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES 

DOUG LAMBORN, CO, Chairman 

RUSH HOLT, NJ, Ranking Democratic Member

Louie Gohmert, TX 

Rob Bishop, UT 

Robert J. Wittman, VA 

Paul C. Broun, GA 

John Fleming, LA 

Glenn Thompson, PA 

Cynthia M. Lummis, WY 

Dan Benishek, MI 

Jeff Duncan, SC 

Paul A. Gosar, AZ 

Bill Flores, TX 

Mark E. Amodei, NV 

Chris Stewart, UT 

Steve Daines, MT 

Kevin Cramer, ND 

Doc Hastings, WA, ex officio 

Steven A. Horsford, NV 

Matt Cartwright, PA 

Jim Costa, CA 

Niki Tsongas, MA 

Jared Huffman, CA 

Alan S. Lowenthal, CA 

Peter A. DeFazio, OR 

Tony Ca ́ rdenas, CA 

Rau ́l M. Grijalva, AZ 

Colleen W. Hanabusa, HI 

Joe Garcia, FL 

Vacancy 

Vacancy 

Edward J. Markey, MA, ex officio 

(III)

CONTENTS 

Page

Hearing held on Tuesday, July 9, 2013 ................................................................. 1

Statement of Members: 

Huffman, Hon. Jared, a Representative in Congress from the State of 

California ....................................................................................................... 3

Prepared statement of ............................................................................... 5

Lamborn, Hon. Doug, a Representative in Congress from the State of 

Colorado ......................................................................................................... 1

Prepared statement of ............................................................................... 2

Statement of Witnesses: 

Coolidge, Dan, Chairman, Campbell County Commissioners ....................... 14

Prepared statement of ............................................................................... 15

Hutzler, Mary J., Distinguished Senior Fellow, Institute for Energy 

Research ........................................................................................................ 20

Prepared statement of ............................................................................... 21

Kendall, Mary L., Deputy Inspector General, Office of Inspector General, 

U.S. Department of the Interior .................................................................. 30

Prepared statement of ............................................................................... 32

Old Coyote, Darrin, Chairman, Crow Nation ................................................. 8

Prepared statement of ............................................................................... 9

Additional materials submitted for the record: 

Federal coal lease sale information from 1990–2013 for the Powder River 

Basin, submitted for the record by Mr. Daines .......................................... 48

(1)

OVERSIGHT HEARING ON MINING IN 

AMERICA: POWDER RIVER BASIN COAL 

MINING, THE BENEFITS AND CHALLENGES 

Tuesday, July 9, 2013

U.S. House of Representatives 

Subcommittee on Energy and Mineral Resources 

Committee on Natural Resources 

Washington, D.C. 

The Subcommittee met, pursuant to notice, at 2:06 p.m., in room 

1324, Longworth House Office Building, Hon. Doug Lamborn 

[Chairman of the Subcommittee] presiding. 

Present: Representatives Lamborn, Lummis, Daines, Stewart, 

Huffman, and Lowenthal. 

Mr. LAMBORN. The Committee will come to order. The Chairman 

notes the presence of a quorum, which, under rule 3(e), is two 

Members. 

The Subcommittee on Energy and Mineral Resources is meeting 

today to hear testimony on an oversight hearing titled, ‘‘Mining in 

America: Power River Basin Coal Mining, the Benefits and Challenges.’’

Under Committee rule 4(f), opening statements are limited to the 

Chairman and Ranking Member of the Subcommittee. However, I 

ask unanimous consent to include any other Members’ opening 

statements to the hearing record, if submitted to the clerk by close 

of business today. 

[No response.] 

Mr. LAMBORN. Hearing no objection, so ordered. I now recognize 

myself for 5 minutes. 

STATEMENT OF THE HON. DOUG LAMBORN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO 

Mr. LAMBORN. Early this year I went to Wyoming, from my home 

in Colorado, to tour a mine in the Powder River Basin. I was impressed with the operation and the vast extent of the coal resources 

in the region. Before me was a story of American success; the use 

of our natural resources that we have been blessed with to: enrich 

our Nation and her people, secure our domestic energy supply, and 

then to reclaim those lands for other uses. 

After that visit, I thought this story, in many ways the American 

story, deserved a hearing so we could focus on what made this region such a success, and how we could use that success to create 

jobs, increase energy production and economic benefits in other 

parts of the Nation. 

About 40 percent of the coal mined in the United States comes 

from the Powder River Basin. The region has tremendous potential. 

According to a recent U.S. Geological Survey assessment, the Powder River Basin of Wyoming and Montana contains about 162 bilVerDate 0ct 09 2002 13:35 Sep 05, 2014 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 X:\01ENER~1\01JY09~1\7-9-13~1\81894_~1 MARK
2

lion short tons of recoverable coal from a total of 1.07 trillion short 

tons of in-place resources. And that’s a quote from their assessment. That’s a lot of coal, a lot of coal that can be used to generate 

electricity to light, heat and cool our homes, power our Nation’s industries and small businesses, and run the computers our economy 

depends on. It is also a lot of revenue, bringing more than a billion 

dollars to the Federal treasury each year. 

However, with the onslaught of new regulations affecting the operation of coal-fired power plants, some of which require technology 

that has not yet been invented, or that may never be commercially 

available, the abundant coal resources from the Powder River 

Basin and elsewhere around the country may grind to a halt. 

The United States has the world’s largest supply of known recoverable reserves, about 24 percent. Coal is found in 38 U.S. States, 

and nearly one-eighth of the country lies over coal beds. The 

United States has twice as many BTUs in its coal reserves than 

the entire world has in its oil reserves. It would be the height of 

folly to throw this resource away. 

Especially at a time when American families are paying nearly 

double what they spent a decade ago on energy for their homes, 

Congress needs to look at how to make energy more affordable for 

families and businesses. Because nearly 40 percent of all electricity 

in the United States is generated from coal-fired power plants, it 

makes sense to look at ways to increase coal production from our 

public lands. We know that we can do this in an environmentally 

responsible way under existing laws and regulations. 

Historically, development of the Powder River Basin coal resources has created family wage jobs, resulted in affordable energy 

across the country, and brought revenues to the Federal, State, 

tribal, and local governments. Today, workers in the Powder River 

Basin have a tremendous opportunity to benefit from the expansion 

of the export market for domestically produced coal. 

To accomplish this, new partnerships are being formed with railroads and export terminals from Canada and the Pacific Northwest 

to the Gulf and the Atlantic. From Germany to Japan, our allies 

around the world are looking to enhance their energy security. 

American coal, mined by American workers, generating revenue for 

the American treasury can and should be a part of their solution 

for the future. 

And yet, it appears to me that every opportunity for a coal miner 

to work is under attack from the Obama Administration. Coal has 

played a vital role in the economic development and vitality of the 

United States, driving the industrialization of the western world, 

providing abundant, reliable, and affordable energy. The Powder 

River Basin is that American story; it has and can continue to have 

the potential to do so well into the future. 

I look forward to hearing from our witnesses today. 

[The prepared statement of Mr. Lamborn follows:]

PREPARED STATEMENT OF THE HONORABLE DOUG LAMBORN, CHAIRMAN, 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

Early this year, I drove into Wyoming from my home in Colorado to tour a mine 

in the Powder River Basin. I was impressed with the operation and the vast extent 

of the coal resources in the region. Before me was a story of American success, the 

use of our natural resources to enrich our Nation and her people, secure our domesVerDate 0ct 09 2002 13:35 Sep 05, 2014 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6621 X:\01ENER~1\01JY09~1\7-9-13~1\81894_~1 MARK
3

tic energy supply, and in the end reclaim those lands for other uses. After that visit, 

I thought this story, in many ways the American story, deserved a hearing so we 

could focus on what made this region such a success and how we could use that 

success to create jobs, increase energy production and economic benefits in other 

parts of the Nation. 

About 40 percent of the coal mined in the United States comes from the Powder 

River Basin and the region has tremendous potential. According to a recent United 

States Geological Survey assessment, ‘‘The Powder River Basin of Wyoming and 

Montana contains about 162 billion short tons of recoverable coal from a total of 

1.07 trillion short tons of in-place resources . . .’’. 

That’s a lot of coal—a lot of coal that can be used to generate electricity to light, 

heat and cool our homes and power our Nation’s industries and small businesses. 

It is also a lot of revenue bringing more than a billion dollars to the Federal treasury each year. 

However, with the onslaught of new regulations effecting the operation of coalfired power plants, some of which require technology that has not yet been invented 

or that may never be commercially available, the abundant coal resources from the 

Powder River Basin and elsewhere around the country may grind to a halt. 

The United States has the world’s largest supply of known recoverable reserves, 

or about 24 percent. Coal is found in 38 U.S. States, and nearly one-eighth of the 

country lies over coal beds. The United States has twice as many BTUs in its coal 

reserves than the entire world has in its oil reserves. It would be the height of folly 

to throw this resource away. 

Especially at a time when American families are paying nearly double what they 

spent a decade ago on energy for their homes, Congress needs to look at how to 

make energy more affordable for families and businesses. Because nearly 40 percent 

of all electricity in the United States is generated from coal-fired power plants, it 

makes sense to look at ways to increase coal production from our public lands. 

Historically, development of the Powder River Basin coal resources has created 

family wage jobs, resulted in affordable energy across the country, and brought revenues to the Federal, State, tribal, and local government. 

Today, workers in the Powder River Basin have a tremendous opportunity to benefit from the expansion of the export market for domestically produced coal. To accomplish this, new partnerships are forming with railroads and export terminals 

from Canada and the Pacific Northwest to the gulf and the Atlantic. From Germany 

to Japan our allies around the world are looking to enhance their energy security. 

American coal, mined by American workers, generating revenue for the American 

treasury can and should be a part of their solution for the future. 

And yet, it appears to me that every opportunity for a coal miner to work is under 

attack from the Obama Administration. 

Coal has played an important role in the economic development and vitality of the 

United States—driving the industrialization of the western world—providing abundant, reliable and affordable energy. The Powder River Basin is that American 

story; it has and can continue to have the potential to do so well into the future. 

I look forward to hearing from our witnesses today. 

Mr. LAMBORN. And now I would like to recognize the Ranking 

Member for 5 minutes. 

STATEMENT OF THE HON. JARED HUFFMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. HUFFMAN. Thank you, Mr. Chairman. It’s good to be standing in as Ranking Member today, and I am glad that you have 

called this hearing. 

Coal production from public lands in the Powder River Basin in 

Wyoming and Montana today comprises a huge percentage of our 

total domestic production. Forty percent of our Nation’s coal production occurs on public lands; and the vast majority of that, more 

than 80 percent, is produced in Wyoming. And yet, coal production 

from public lands in the Powder River Basin has largely escaped 

oversight in recent years. It has been nearly 20 years since the 

GAO has examined the Federal coal program. This is the first 

hearing that we have had on coal production in this region, in 21⁄2

4

years under the Majority. We have a responsibility in this Committee, I believe, to ensure that taxpayers are getting a proper return on this incredibly valuable public resource. 

Indeed, taxpayers have a history of getting short-changed when 

it comes to coal production in the Powder River Basin. In the early 

1980s, at the request of Ranking Member Markey, the GAO undertook an investigation into the coal leasing program in that region. 

And the GAO found that the Reagan Administration had been leasing coal in the Basin for $100 million less than fair market value. 

As a result, Congress created a special commission to look at this 

issue, and enacted a moratorium on leasing until the problems 

could be addressed and taxpayers could be guaranteed a proper return. 

There are troubling indications that taxpayers may once again be 

losing millions of dollars that they are rightfully owed from coal 

leases in the Powder River Basin. Last month the Interior Department Inspector General issued a report which concluded that taxpayers may have lost $2 million in recent lease sales and $60 million in potentially under-valued lease modifications. 

Now, according to the inspector general, the vast majority of 

lease sales in the Powder River Basin are not, in reality, competitive. Over the past 20 years, more than 80 percent of the coal lease 

sales in the Basin received bids from a single company. This lack 

of industry competition means that if the Department is not correctly estimating the fair market value of the federally owned coal, 

then taxpayers could be losing millions of dollars. 

And as coal companies are increasingly looking to export coal 

produced in the United States abroad, where it can be sold for 

higher prices, the inspector general report found that the Interior 

Department does not fully account for the possibility of exports in 

determining the value of coal below our public lands. In fact, the 

amount of coal being exported from the United States and the price 

of exported coal has doubled since 2007. Coal companies have told 

their investors they want to continue growing the amount of American coal sent overseas. Leases in the Powder River Basin are 

issued for 20 years. These mines can last decades longer than that. 

We need to ensure that the Interior Department is properly factoring exports into the value of these leases that are issued today 

to protect our taxpayers. 

Despite the claims of the Majority, the Obama Administration is 

leasing coal in the Powder River Basin. In fact, there were more 

successful coal lease sales in the region during President Obama’s 

first term than during President Bush’s first term. We have produced slightly more coal from Federal lands during the last 4 years 

under the Obama Administration than during the previous 4 years 

under the Bush administration. And I will say I take no joy in 

these facts, as somebody who happens to care about climate 

change, and happens to believe we should be transitioning away 

from coal. But the facts are the facts, and we should bear that in 

mind as we move forward with this hearing. We must now ensure 

that taxpayers are getting their fair share for that public resource. 

I was disappointed to see that the Interior Department will not 

be able to testify at the hearing today. This Committee needs to 

hear from the Department directly on what it is doing to respond 

5

to the recommendations from the inspector general, and to ensure 

that taxpayers are being protected. I hope that the Majority would 

work with us on that, and I look forward to the testimony of our 

witnesses. 

[The prepared statement of Mr. Huffman follows:]

PREPARED STATEMENT OF THE HONORABLE JARED HUFFMAN, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF CALIFORNIA

Thank you. 

Mr. Chairman, I am pleased that you have called this hearing today. Coal production from public lands in the Powder River Basin in Wyoming and Montana today 

comprises a huge percentage of our total domestic production. Forty percent of our 

Nation’s coal production occurs on public lands and the vast majority of that—more 

than 80 percent—is produced in Wyoming. 

Yet coal production from public lands in the Powder River Basin has largely escaped oversight in recent years. It has been nearly 20 years since the Government 

Accountability Office has examined the Federal coal program. This is the first hearing we have had on coal production in this region in 21⁄2 years under the Majority. 

We have a responsibility in this Committee to ensure that taxpayers are getting a 

proper return on this incredibly valuable public resource. 

Indeed, taxpayers have a history of getting shortchanged when it comes to coal 

production in the Powder River Basin. In the early 1980s, at the request of Ranking 

Member Markey, the GAO undertook an investigation into coal leasing in the region. The GAO found that the Reagan Administration had been leasing coal in the 

Powder River Basin for $100 million less than fair market value. As a result, Congress created a special commission to look at this issue and enacted a moratorium 

on leasing in the region until the problems could be addressed and taxpayers could 

be guaranteed a proper return. 

There are troubling indications that taxpayers may once again be losing millions 

of dollars that they are rightfully owed from coal leases in the Powder River Basin. 

Last month, the Interior Department Inspector General issued a report which concluded that taxpayers may have lost $2 million in recent lease sales and $60 million 

in potentially undervalued lease modifications. 

According to the inspector general, the vast majority of lease sales in the Powder 

River Basin are not, in reality, competitive. Over the past 20 years, more than 80 

percent of coal lease sales in the PRB received bids from only a single company. 

That lack of industry competition means that if the Department is not correctly estimating the fair market value of this federally owned coal, taxpayers could lose millions of dollars. 

And as coal companies are increasingly looking to export coal produced in the 

United States abroad where it can be sold for higher prices, the inspector general 

report found that the Interior Department does not fully account for the possibility 

of exports in determining the value of coal below public lands. Indeed, the amount 

of coal being exported from the United States and the price of exported coal has 

doubled since 2007. Coal companies have told their investors that they want to continue growing the amount of American coal sent overseas. 

Leases in the Powder River Basin are issued for 20 years. These mines can last 

decades longer. We need to ensure that the Interior Department is properly factoring exports into the value of leases issued today to protect taxpayers. 

Despite the claims from the Majority, the Obama Administration is leasing coal 

in the Powder River Basin. There were more successful coal lease sales in the region 

during President Obama’s first term than during President Bush’s first term. We 

have produced slightly more coal from Federal lands during the last 4 years under 

the Obama Administration than during the previous 4 years under the Bush Administration. We must now ensure that taxpayers are getting their fair share for that 

public resource. 

I was disappointed to see that the Interior Department was not able to testify at 

today’s hearing. This Committee needs to hear from the Department directly on 

what it is doing to respond to the recommendations made by the inspector general 

to ensure that taxpayers are protected. I hope that the Majority would work with 

us on that and I look forward to the testimony of our witnesses. 

I yield back the balance of my time. 

Mr. HUFFMAN. I yield back the balance of my time. 

6

Mr. LAMBORN. OK, thank you. I would now like to ask the witnesses to come forward. And we will hear first from Congressman 

Daines of Montana who would like to introduce the first witness. 

Mr. DAINES. Thank you, Mr. Chairman. And thank you for holding this hearing today. 

The Powder River Basin coal plays a big role in my home State of Montana. In fact, just last year, coal generated $118 million in 

revenues for our State. Additionally, Montana has a coal severance 

tax, which funds a trust fund that currently amounts to more than 

$870 million that helps fuel other programs in our State. 

Coal mining in Montana sustains 864 direct jobs, these are good, 

high-paying jobs with good benefits, and is projected to grow to almost 1,300 direct jobs from existing and new mines that are coming online. Powder River Basin coal is very competitive in the global market. 

Our State has been blessed with hundreds of hard-working people in the coal industry who are employed by responsible companies like Westmoreland, Arch Coal, and Cloud Peak, who have 

made important commitments to our local communities. Still, 

though, unfortunately, many areas of our State have double-digit 

unemployment. 

In Chairman Old Coyote’s testimony you will soon hear, he will 

state that the unemployment rate on his reservation is 47 percent, 

despite one coal company employing their workforce with 70 percent tribal members. Future generations leave our State to find 

good-paying jobs elsewhere. Coal is part of the solution in Montana 

to keeping kids that want to call Montana home. And I can tell 

you, grandmas and grandpas don’t want to have to fly to California 

or to the east coast to see their grandkids, when they grew up in 

Montana. 

I would truly like to sincerely welcome Chairman Darrin Old 

Coyote before us today, and share with you our shared vision for 

the future of our State. I can tell you when I first met Chairman 

Old Coyote when I was newly elected here in January, we traded 

stories. His cousin, Rachel Old Coyote, and I walked to grade 

school together back in Bozeman in the late sixties. So I have 

known the Old Coyote family for a long time. It is a very, very respected family in the State of Montana. 

In fact, a few months ago, the Chairman was in town with his 

9-year-old daughter. And, as a father of four myself, I know we 

both share convictions to work hard so that our children and future 

generations can have the best opportunities possible. Chairman 

Old Coyote has an exciting vision, where he sees resource development as a key to better future for his tribe. 

And let me tell you. In Montana and other States out West, we 

can develop our resources without damaging our environment. The 

Chairman mentioned that there are 38 States that have coal deposits. And Congresswoman Lummis here from Wyoming, she mines 

10 times more coal than Montana, which we are very proud of, and 

we are envious of Wyoming. And yet, Montana has the most recoverable coal deposits of any State in the Nation. 

I visited some of these coal operations in Montana. I would encourage anyone who hasn’t seen one to come out and see what is 

going on in Montana and Wyoming, as these companies responsibly 

7

mine and then reclaim the land. I am an avid outdoorsman, I hunt, 

I fish, I backpack, I climb mountains. I am impressed with their 

environmental stewardship as they restore the lands to their original state, right down to the topography. 

Chairman Old Coyote continues to lead the Crow Tribe in responsible beneficial partnerships with coal developers like Westmoreland and Cloud Peak, so that his tribal members have opportunities for good-paying jobs. 

I am glad the Chairman is here today to share his mission to responsibly develop our natural resources that our State has been 

blessed with, so that our kids, so that Chairman Old Coyote’s kids, 

can continue to call Montana home. 

I yield back the balance of my time. 

Mr. LAMBORN. OK. Thank you for that introduction. I would like 

to welcome the rest of the panel. We have Mr. Dan Coolidge, Chairman of the Campbell County Commissioners; Ms. Mary Hutzler, 

Distinguished Senior Fellow of the Institute for Energy Research; 

and, finally, the Democrat Minority’s witness, Ms. Mary Kendall, 

with the Office of the Inspector General for the Department of the 

Interior. 

Now, as Ms. Kendall takes her seat, I have to say the following. 

The Department of the Interior needs to have an independent 

watchdog to protect against fraud, waste, and abuse, and to keep 

Congress apprised of management problems and wrongdoing within the Department. Unfortunately, the Department has been without such a watchdog for more than 4 years. The Committee has significant concerns that the Office of Inspector General, under Ms. 

Kendall’s leadership, has lacked the necessary independence required of an IG, and has been too accommodating in its investigations and reviews of the Department. 

The Committee, and more specifically, this member, myself, has 

had serious concerns that Ms. Kendall’s previous testimony before 

this Committee has been inaccurate and misleading. Ms. Kendall 

has also refused to comply with a duly authorized and issued subpoena for documents related to the IG’s 2010 investigation into the 

Department’s deepwater moratorium in the Gulf of Mexico. 

The IG, under her direction, has also, on several occasions, halted investigations, collaborated with the Department on policy initiatives, and softened reports that could have embarrassed the Administration. To be clear, Ms. Kendall has little credibility before 

this Committee as a witness, and is here today only at the invitation of the Minority. It would have been preferable for the Minority 

to invite, and the IG to make available, the head of the IG’s audit 

division who led the coal evaluation study, rather than Ms. Kendall. 

It is also unfortunate that Ms. Kendall has remained in charge 

of the IG, in spite of these problems, and that her presence there 

continues to tarnish the reputation of the office and the hard work 

of the IG’s many dedicated employees. The President needs to 

nominate a permanent, independent replacement to lead the IG 

without further delay. 

Like all of our witnesses, your written testimony will appear in 

full in the hearing record, so I ask that you keep your oral stateVerDate 0ct 09 2002 13:35 Sep 05, 2014 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6602 X:\01ENER~1\01JY09~1\7-9-13~1\81894_~1 MARK
8

ments to 5 minutes. Our microphones are not automatic, so you 

have to press the button to begin. 

And here is how the timing lights work. When you begin to 

speak, the clerk will start the timer and a green light will appear. 

After 4 minutes a yellow light will appear. And at that time you 

should begin to conclude your statement. After 5 minutes, the red 

light comes on, and I would ask that you conclude at that time. 

And we will now begin with Chairman Old Coyote. And you can 

begin. 

STATEMENT OF DARRIN OLD COYOTE, CHAIRMAN,

CROW NATION 

Mr. OLD COYOTE. Good afternoon. On behalf of the Crow Nation, 

I want to thank Chairman Lamborn, Representative Daines, and 

the members of the House Subcommittee on Energy and Mineral 

Resources for holding this oversight hearing on Powder River coal 

mining. 

My name is Darrin Old Coyote, and I am Chairman of the Crow 

Nation. I appreciate this invitation to provide testimony from the 

Crow Nation’s perspective on coal development, an area central to 

my administration and a topic that has unlimited potential to improve the ongoing substandard socio-economic conditions of the 

Crow people and the surrounding communities in southeastern 

Montana, which includes the northern portion of the Powder River 

Basin. 

I have served as an elected official of the Crow Nation for 81⁄2

years. My purpose today is to provide a brief history of the Crow 

Nation’s resources, to summarize my administration’s efforts to develop coal in the northern Powder River Basin, and to share the 

benefits and challenges of Crow coal development. 

The Crow Nation is a sovereign government located in southeastern Montana. The Crow Nation has three formal treaties with 

the Federal Government, concluding with the Fort Laramie Treaty 

of 1868. The Crow Reservation originally encompassed most of Wyoming, including the Powder River Basin and southeastern Montana, totaling 38.5 million acres. Through a series of treaties, 

agreements, and unilateral Federal laws over a 70-year span, Crow 

territory was reduced by 92 percent to its current 2.2 million acres. 

In addition to substantial land loss, the remaining tribal land 

base within the exterior boundary of the Crow Reservation was 

carved up by the 1920 Crow Allotment Act. Because of allotment 

and Federal probate of Indian property, with many Indians dying 

without wills, fractionated land ownership arose. The Crow land 

base has been decimated by fractionated ownership of various allotments. 

The Department of the Interior estimates that over 10 percent of 

all fractionated lands within Indian country are actually within the 

Crow Reservation, with numerous parcels of allotted lands that 

have more than 10 owners, and sometimes more than 100 owners. 

In sum, the loss of the Crow land base, allotment, and fractionation 

have collectively resulted in checkerboard ownership of Reservation 

lands, giving rise to overlapping governmental authority in Indian 

country. 

9

The Crow Nation has very substantial undeveloped coal resources. In fact, today, the Crow Indian Reservation contains an estimated 9 billion tons of coal. The Crow Nation has developed a 

limited amount of its resource by leasing a portion of its coal reserves for 39 continuous years to Westmoreland. 

The Absaloka Mine was developed to supply Powder River Basin 

coal to Midwestern utilities, and it has produced over 180 million 

tons of coal since 1974. From the mines, 5 to 7 million tons per 

year of coal production, it provides production taxes and royalties 

to the Crow Nation exceeding 20 million in 2010, when the mine 

was operating at full capacity. The revenue generated from the 

mine represents as much as two-thirds of the Crow Nation’s nonFederal budget. 

Westmoreland employs a 70-percent tribal workforce, with an average annual salary of $66,000. The Absaloka Mine is the largest 

private employer within the Crow Reservation. The importance of 

the mine to the economy of the Crow Reservation could not be overstated. Without question, it is a critical source of jobs, financial 

support, and domestically produced energy. Westmoreland has 

been the Crow Nation’s most significant private partner for over 39 

years. 

A recent example demonstrates the importance of the Absaloka 

Mine to the Crow people. A major unplanned outage at the mine’s 

largest power plant customer over the past 2 years resulted in a 

50 percent reduction in tribal coal revenue and numerous employment lay-offs. 

Despite the challenging environment, the Crow Nation has intensified its efforts to develop its coal resources, diversify its revenue 

streams with respect to the Absaloka Mine. The Crow Tribe legislature approved Westmoreland lease in March of 2013. And similarly, in June, the BIA approved another tribally approved agreement with Cloud Peak Energy. 

Over the past 6 months I have sent three Crow delegations to 

the Northwest to meet and work with tribal nations, investigate 

proposed co-export projects, and then analyze the follow-up on 

these recent diplomatic discussions and fact-finding trips about 

possible relationships involving Crow coal transportation and export terminal partners. During the last two trips, I invited present 

and potential project partners, as well as tribal leaders from Northwest tribal nations to visit my homeland to see firsthand Crow coal 

development, and listen to their concerns. 

I will continue to work with everyone and respect tribal treaty 

rights, sacred sites, and local concerns. However, I strongly feel 

that non-governmental organizations cannot and should not tell me 

to leave Crow coal in the ground. I was elected to provide basic 

services and jobs to my citizens, and I will steadfastly and responsibly pursue Crow coal development to achieve my vision for the 

Crow people. 

[The prepared statement of Mr. Old Coyote follows:]

PREPARED STATEMENT OF DARRIN OLD COYOTE, CHAIRMAN, CROW NATION

I. INTRODUCTION

Good morning. On behalf of the Crow Nation, I want to thank Chairman Lamborn 

and the members of the House Subcommittee on Energy and Mineral Resources for 

10

holding this Oversight Hearing on Powder River Coal Mining. My name is Darrin 

Old Coyote and I am the Chairman of the Crow Nation. I appreciate this invitation 

to provide testimony from the Crow Nation’s perspective on coal development, an 

area central to my administration and a topic that has unlimited potential to improve the ongoing substandard socioeconomic conditions of the Crow people and the 

surrounding communities in southeastern Montana (the northern portion of the 

Powder River Basin). 

I have served as an elected official of the Crow Nation for 8.5 years. More recently, in November 2012, I was elected as Chairman of the Crow Nation. Over the 

past 7 months, with the help of our coal partners and the Crow Nation legislative 

branch, we have taken several meaningful steps toward the successful development 

of our coal resources and look forward to completing, in the next few years, projects 

that will positively transform my community. My purpose today is to provide a brief 

history of the Crow Nation’s resources, to summarize my administration’s efforts to 

develop Crow coal in the northern Powder River Basin, and to share the benefits 

and challenges of Crow coal development. 

II. BRIEF OVERVIEW OF CROW RESERVATION, LAND ISSUES AND RESOURCES

A. Brief History of Land and Development Challenges 

The Crow Nation is a sovereign government located in southeastern Montana. The 

Crow Nation has three formal treaties with the Federal Government, concluding 

with the Fort Laramie Treaty of May 7, 1868. The Crow Reservation originally encompassed most of Wyoming (including the Powder River Basin) and southeastern 

Montana, totaling 38.5 million acres. Through a series of treaties, agreements and 

unilateral Federal laws over a 70 year span, Crow territory was reduced by 92 percent to its current 2.2 million acre area. 

In addition to substantial land loss, the remaining tribal land base within the exterior boundary of the Crow Reservation was carved up by the 1920 Crow Allotment 

Act. In 1919, prior to the Allotment Act, there were 2,453 allotments (individual 

Crow ownership), consisting of 482,584 acres. By 1935, there were 5,507 Crow allotments, consisting of 2,054,055 acres (218,136 acres were alienated by 1935). The Big 

Horn and Pryor Mountains were not allotted and still remain reserved for the Crow 

Nation and its citizens. 

Because of allotment and Federal probate of Indian property (with many Indians 

dying without wills), the phenomenon of fractionated land ownership arose—where 

several (sometimes hundreds of) owners might have varying interests in a single 

parcel. By 1928, the Meriam Report declared the Federal allotment policy to be one 

of the most disastrous Federal policies of all time. During discussions leading up 

to the Indian Reorganization Act of 1934, one congressman explained the 

fractionating effects of allotment in this fashion:

‘‘It is in the case of the inherited allotments, however, that the administrative costs become incredible . . . . On allotted reservations, numerous cases 

exist where the shares of each individual heir from lease money may be 1 

cent a month. Or one heir may own minute fractional shares in 30 or 40 

different allotments. The cost of leasing, bookkeeping, and distributing the 

proceeds in many cases far exceeds the total income. The Indians and the 

Indian Service personnel are thus trapped in a meaningless system of 

minute partition in which all thought of the possible use of land to satisfy 

human needs is lost in a mathematical haze of bookkeeping.’’ 78 Cong.Rec. 

11728 (1934), cited in Hodel v. Irving, 481 U.S. 704 (U.S.S.D. 1987).

The Crow land base has been decimated by fractionated ownership of various allotments. The Department of the Interior estimates that over 10 percent of all 

fractionated lands within Indian country are actually within the Crow Reservation 

(with numerous parcels of allotted lands that have more than 10 owners and sometimes more than 100 owners). By meaningfully addressing the fractionation issue 

at Crow through implementation of the Cobell Settlement (enacted by Congress and 

signed by the President in December 2010), we can hopefully make more of the 

Crow homeland productive for both residential and energy development purposes. 

In sum, the loss of the Crow land base, allotment, and fractionation have collectively resulted in checkerboard ownership of reservation lands, giving rise to overlapping governmental authority in Indian country (Federal, State, tribal and local). 

Sometimes, the land issues become cost prohibitive for some project developers. As 

discussed later, tax incentives are critical and need to be provided in order to level 

the playing field for Indian energy projects. 

11

B. Present Land, Population, and Education 

The statistical land ownership resulting from the above described legal history is 

approximately: 45 percent Crow allotments; 20 percent Crow Nation trust and fee 

land; and 35 percent non-Indian fee land (basically 2⁄3 of surface land is owned by 

the Crow Nation and individual Crows). However, overall, the pattern of surface 

ownership generally is ‘‘checkerboard’’ with interspersed Crow Nation trust and fee 

lands, Crow allotments and non-Indian fee lands. At times, the checkerboard nature 

of the surface ownership creates challenges, summarized later, for developing the 

subsurface minerals (almost all of which is owned by the Crow Nation). 

Today, there are about 13,000 enrolled citizens of the Crow Nation, with approximately 9,000 of those residing within the exterior boundaries of the Reservation. 

Our goal is to invite more of our citizens to return home to live and resume tribal 

relations, but we must be able to offer homes, jobs, and a place to find their dreams. 

Our current unemployment rate is 47 percent. The Crow Nation has always emphasized higher education and we currently have more than 400 annual applications 

for higher education assistance. Because of Federal funding limitations and internal 

budget constraints, however, we can only partially fund 90 students each year. 

In addition to providing financial support for education, we have a separately 

chartered tribal college (Little Bighorn College, ‘‘LBHC’’) that started operations in 

1981. LBHC has had over 350 graduates. LBHC graduates are employed on and 

around the Crow Reservation in a variety of positions including teachers’ aids, computer technicians, office managers and administrative assistants. At least 60 have 

completed bachelor’s degrees and are pursuing professions in education, social work, 

human services, science, nursing, technology, accounting and business. As we move 

forward in developing our coal resources, LBHC can help to provide our citizens 

with training in fields for new job opportunities. 

C. Coal, Past and Present 

The Crow Nation has very substantial undeveloped coal resources. In fact, today, 

the Crow Indian Reservation contains 2 million acres in subsurface mineral rights, 

including an estimated 9 billion tons of coal. The Crow Nation has developed a limited amount of its resource, by leasing a portion of its coal reserves for 39 continuous years to Westmoreland Resources, Inc. (‘‘WRI’’). WRI owns and operates the 

Absaloka Mine, a 15,000-acre single pit surface coal mine complex near Hardin, 

Montana, on the northern border of the Crow Reservation. 

The Absaloka Mine was developed to supply Powder River Basin coal to Midwestern utilities and it has produced over 180 million tons of coal since 1974. From 

the Mine’s 5–7 million tons per year of coal production, it provides production taxes 

and royalties to the Crow Nation—exceeding $20 million in 2010 when the Mine 

was operating at full capacity. The revenue generated from the Mine represents as 

much as two-thirds of the Crow Nation’s non-Federal budget. 

Furthermore, WRI employs a 70 percent tribal workforce, with an average annual 

salary of over $66,000, and a total employment expense of approximately $18.6 million. The Absaloka Mine is the largest private employer within the Crow Reservation. The importance of the Mine to the economy of the Crow Reservation cannot 

be overstated. Without question, it is a critical source of jobs, financial support and 

domestically produced energy. WRI has been the Crow Nation’s most significant private partner over the past 39 years. 

A recent example demonstrates the importance of the Absaloka Mine to the Crow 

people. A major unplanned outage at the Mine’s largest power plant customer over 

the past 2 years resulted in a 50 percent reduction in tribal coal revenue and numerous employment layoffs. We expect the outage to cease soon, with a commensurate return this fall of the tribe’s basic government operating revenue. This recent 

outage reinforced the need for the Crow Nation to pursue multiple coal projects to 

diversify our revenue base. 

III. MY ADMINISTRATION’S VISION ON ENERGY DEVELOPMENT: POTENTIAL BENEFITS

Given our vast mineral resources, the Crow Nation can, and should, be self-sufficient. My goal is clear. My administration desires to develop our mineral resources 

in an economically sound, environmentally responsible manner that is consistent 

with Crow culture and beliefs. More than anything, I desire to improve the Crow 

people’s quality of life, create a future with good-paying jobs and employment benefits within the Crow Reservation, and provide hope and prosperity for the next 

seven generations of Crow citizens. 

My larger vision is to become America’s energy partner and help reduce America’s 

dependence on foreign oil. Over the next 40 years, the World Energy Council predicts that the world will need to double today’s level of energy supply to meet inVerDate 0ct 09 2002 13:35 Sep 05, 2014 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 X:\01ENER~1\01JY09~1\7-9-13~1\81894_~1 MARK
12

creased demand. Primary energy sources, such as coal, oil and gas, have a finite life 

and therefore we must have an all-of-the-above energy development strategy to meet 

America’s needs as well as global demand. 

My administration stands ready to meet the global energy challenge, but the future both near and long term, must have coal in its equation. With President 

Obama’s recent speech on climate change, we are mindful of the increased efforts, 

policy and otherwise, to restrict coal as a domestic fossil fuel source to generate electricity (with domestic coal produced electricity being reduced from approximately 50 

percent to 40 percent in less than a decade). Our coal partners and our coal economist consistently remind us of the difficult environment for domestic coal production. 

Despite the challenging environment, the Crow Nation has intensified its efforts 

to develop its coal resources to diversify its revenue streams. With respect to the 

Absaloka Mine, the Crow Tribal Legislature approved and I executed an agreement 

with WRI in March 2013 to expand its mining operations with a lease of an estimated 145 million tons of Rosebud McKay coal resources located adjacent to the 

Mine. This new lease will provide the Crow Nation with long-term revenues and employment and sustain the operations of the Mine past 2020. Even though this lease 

is pending before the BIA, we expect approval in the near future. 

Similarly, in June, the BIA approved another tribally approved agreement with 

Cloud Peak Energy (‘‘CPE’’) to explore, with options to lease, and develop an estimated 1.4 billion tons of Crow coal in the southeastern corner of the Crow Reservation. This long term agreement will also provide much need revenue to the Crow 

Nation, increase employment opportunities for Crow and Montana citizens, and diversify tribal revenue sources. However, the CPE project—named Big Metal 

(www.bigmetalcoal.com), is dependent on coal exports through the Northwest. 

As such, I have directed my administration to look to coal exports as an alternative, given the increased coal demand in China, India and other countries. Over 

the past 6 months, I have sent three Crow delegations to the Northwest to meet 

and work with other tribal nations, investigate proposed coal export projects, and 

then to analyze and follow-up on these recent diplomatic discussions and fact-finding trips about possible relationships involving Crow coal, transportation and export 

terminal partners. During the last two trips, which I attended, I invited present and 

potential project partners as well as tribal leaders from Northwest tribal nations to 

visit my homeland to see first-hand Crow coal development and listen to their concerns. Last month, I hosted a Crow Nation Coal Summit to answer questions about coal 

transportation issues (coal dust and train traffic), jobs (viewing Crow citizens at the 

Absaloka Mine), reclamation and the potential for future export development. We 

worked with our coal partners to provide mine tours of Spring Creek and Absaloka, 

to provide coal transportation information from Burlington Northern Santa Fe Railway Company representatives, and to have coal export terminal questions answered 

by representatives from SSA Marine (the project developers of the proposed Gateway Pacific Terminal coal export facility). 

We have been made aware of local concerns regarding coal export projects expressed by citizens in the Northwest. That is the reason I brought industry, tribal 

nations and local citizens together to inform, educate, and work with each other to 

address any substantive issues. I will continue to work with everyone and respect 

tribal treaty rights and local concerns. However, I strongly feel that non-governmental organizations cannot and should not tell me to leave Crow coal in the 

ground; I was elected to provide basic services and jobs to my citizens and I will 

steadfastly and responsibly pursue Crow coal development to achieve my vision for 

the Crow people. 

Finally, with a substantial Crow coal resource, I would like to continue the late 

Chairman Venne’s vision to have the Crow Nation, with a project partner, build the 

first coal-to-liquids (‘‘CTL’’) plant in North America with capture and storage of carbon. In fact, in 2008, the Crow Nation and our partner signed a project agreement 

to develop Many Stars, a planned coal-to-liquids project that sought to produce up 

to 50,000 barrels or more per day of ultra-clean jet and diesel fuel. The vision was 

to contract with the U.S. Air Force to supply clean diesel fuel that would meaningfully reduce carbon emissions throughout the world, reduce America’s dependence 

on foreign oil, and provide a safe and secure domestic fuel supply to our national 

defense. 

Unfortunately, the economic recession hit and an uncertain national energy policy 

made it difficult for the proposed project to proceed. We remain hopeful that the Administration can and will support clean coal, that technology advancements can create a smaller scale project, and that we will have a new development partner to 

take the risk with the Crow Nation. Needless to say, I am pursuing an all-of-theVerDate 0ct 09 2002 13:35 Sep 05, 2014 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6621 X:\01ENER~1\01JY09~1\7-9-13~1\81894_~1 MARK
13

above energy development strategy (hydropower, wind, coal export and CTL) but I 

will need some help in order to effectuate my energy vision. 

IV. CHALLENGES AND THE NEED TO LEVEL THE PLAYING FIELD

A. Challenges 

Despite the fact that the Crow Nation has a substantial coal resource and even 

though we have a clear coal development vision, numerous practical problems consistently arise with each proposed project. The lease approval and development process is burdensome, slow, and complicated. Federal regulatory requirements for appraisals, surface access approvals and environmental assessments to conduct exploration within the Reservation often times create significant delays. Further, incomplete land records (in some cases BIA records for surface and mineral ownership are 

erroneous, missing and out of date), inadequate BIA staffing (e.g., the BIA area office in Billings, Montana, has one primary individual to work on environmental 

issues for eight tribal nations), and surface land fractionation (described above) create multiple examples of uncertainty that discourage investment and prevent 

project development. 

It is extremely difficult to compete with off-reservation development because of 

these problems. Many companies view these additional regulatory and practical burdens as cost prohibitive, even with the best efforts of particular BIA employees and 

the Crow Nation. Based on our experience in working with current and prospective 

coal partners, we strongly recommend a two-prong approach to leveling the playing 

field for energy development in Crow country: (i) eliminate regulatory obstacles (we 

provided written support for H.R. 1548, Native American Energy Act); and (ii) permanently extend existing tax incentives to offset the extra development burdens. 

B. Leveling the Playing Field 

In general, two existing Federal tax incentives encourage investment and development in Indian country but their utility is diminished by their short term nature. 

Accelerated depreciation and the Indian employment tax credit are two examples of 

such incentives (the latter needs some modifications to enhance its effectiveness). 

These incentives, originally enacted in the 1993 Budget Reconciliation Act, have 

been extended year-to-year in the tax extenders package and, as such, generally are 

not relied upon by potential investors with large Indian energy projects because of 

the extended length of time (often 5–10 years for large coal projects) that development takes before the energy commodity is produced. The Crow Nation supports the 

permanent extension of these tax incentives, with modifications, but another more 

specific tax incentive is the most important for Crow coal development. 

The Indian coal production tax credit (‘‘ICPTC’’), originally enacted in the 2005 

Energy Policy Act, kept the Absaloka Mine open and competitive since 2006. This 

credit neutralized the threat of a potential mine closure and also continued WRI’s 

ability to provide critical employment and revenue for essential Crow governmental 

functions. Like the aforementioned tax incentives, it is set to expire on December 

31, 2013, and has also been part of the tax extenders package. 

In order to overcome all of the additional regulatory costs and land transaction 

issues described above, the Crow Nation seeks a permanent extension of ICPTC, 

with a few modifications. We would like for the ICPTC to be used against the alternative minimum tax, to extend the placed in service date to include the aforementioned projects, and to eliminate the unrelated person requirement in the original 

credit (to allow for a CTL project in the future). With these tax incentives made permanent, the Crow Nation can compete with others on a level playing field. 

V. CONCLUSION

Today, the Crow Nation desires to develop its vast coal resources not only for 

itself, but for our energy partners, the surrounding communities and for the United 

States. By developing Crow coal via domestic markets, export terminals and coal 

conversion, we firmly believe we can help ourselves while simultaneously meeting 

national energy goals—achieving energy independence, securing a domestic supply 

of valuable energy, and reducing the country’s dependence on foreign oil. My administration has been very busy in working to develop our coal resources and to remove 

obstacles to successful development. 

I simply desire for the Crow Nation to become self-sufficient by developing its own 

coal resources and to provide basic services for the health, hopes and future of the 

Crow people. With help from you—our historic treaty ally—in leveling the energy 

development playing field, we can achieve my vision and both benefit immensely. 

14

Mr. Chairman and Committee members, thank you again for the opportunity to 

testify on Powder River Basin Coal Development before you today. I would be happy 

to answer any questions. 

Mr. LAMBORN. OK, thank you for your testimony. 

Mr. Coolidge? 

STATEMENT OF DAN COOLIDGE, CHAIRMAN, CAMPBELL 

COUNTY COMMISSIONERS 

Mr. COOLIDGE. Good afternoon, Chairman Lamborn and members of the Subcommittee. Thank you for the opportunity to appear 

before you today. I am Dan Coolidge, Chairman of the Campbell 

County Commission. 

Campbell County is located in northeastern Wyoming, and sits in 

the heart of the Powder River Basin. The citizens at Campbell 

County and the State of Wyoming have been major beneficiaries of 

surface coal mining since its inception in the Powder River Basin 

in the mid-1970s. We believe the anti-coal stance of the current Administration could be devastating to our local and State economy, 

as well as negatively affect the fragile economic recovery of our Nation. 

Wyoming is the largest producer of coal in the United States. 

Over 80 coal trains per day leave the Powder River Basin. Coal 

production from Campbell County has more than doubled since 

1994, and since 2006 PRB coal production has averaged approximately 425 million tons per year. The majority of PRB coal is exported out of State to power plants in 34 States. Approximately 28 

percent of the coal used for U.S. electricity generation in 2012 came 

from the Powder River Basin. This is equivalent to approximately 

95 nuclear power plants, 175 Hoover Dams, or 200,000 wind turbines. Coal provides electricity for hundreds of thousands of American homes, hospitals, and schools. 

The PRB coal mines have a long history of safe and environmentally responsible operation. Safety is the primary focus of 

mines in the PRB. And consequently, their industry enjoys the second-best safety record in Wyoming, behind the finance and insurance industry. 

In Wyoming, we have our cake and eat it, too. We have an abundance of natural resources within our State’s borders. Yet, at the 

same time, we have world-class wildlife, breathtaking views of our 

open spaces, and clean air and water. In Wyoming, we reject the 

notion that energy policy should be an either-or discussion. We can 

have both. We do have both. And we will continue to have a robust 

energy economy, as well as a beautiful, clean environment. The 

mines operate with the utmost respect for the environment. The 

reclamation of the mines has been highly successful. Reclaimed 

lands are superior to the native topography. 

Locally, the coal industry is the largest single contributor to 

Campbell County’s revenue stream. Ad valorem taxes on coal production account for approximately 64 percent of the total assessed 

value of Campbell County. The personal property tax, as well as 

the sales tax generated by mine-related purchases is substantial. 

It cannot be understated what a significant impact the mining 

industry has on the ability of local governments to keep pace with 

15

infrastructure and core service needs within our community. The 

significant revenues received from the mineral industry also afford 

local governments the ability to provide quality-of-life facilities for 

our citizens. Furthermore, local governments are able to provide 

substantial funding to human and social service organizations for 

those less fortunate in our communities. 

Through the coal lease bonus program, the State has provided 

desperately needed school facilities for school districts. The severance tax money, in addition to the State share of mineral royalties, 

flows through the State to local governments to assist with the cost 

of providing essential governmental services. 

While the PRB is a great asset for Wyoming, it is also a catalyst 

for economic growth in other States. Low-cost electricity in the 

Heartland of America starts in Campbell County, Wyoming. The 10 

States that use the highest percentage of coal for electricity enjoy 

rates that are approximately 50 percent less than the cost of States 

that rely on other fuels. This cost-effective resource is a key element in driving U.S. industrial competitiveness, and maintaining 

low electricity prices for residential and commercial consumers. In 

2008, PRB coal producers acquired almost $2.3 billion of industrial 

supplies from over 47 different States. 

Finally, a point I am sure that is not lost to Congress, is the tremendous financial benefit to the Federal Government in lease bonuses, Federal royalties, and income taxes that Wyoming coal resources provide to all Americans. In an economic climate of declining revenue and Federal sequestration, coal offers a way for the 

Federal Government to make money. 

The biggest challenge we face is the attack by the current Administration on the lifeblood of our community, our State, and 

every family in this country that will have to make the difficult decision of feeding their family or paying exorbitant electricity 

charges because coal is no longer a part of our national energy policy. 

If the concerns with coal mining are truly environmentally based, 

we should do everything we can to continue to effectively utilize 

the vast and available resources of PRB coal, clean coal. Despite 

some public sentiment, coal will continue to be an abundant, accessible, and affordable energy source far into the future. There are 

simply no other alternative energy sources that can replace it. 

Make no mistake. We need to continue to pursue and develop alternative energy sources. But in the meantime, we need to take care 

of an industry that will continue to provide affordable power to our 

Nation. 

Americans have an expectation that when they flip on a light 

switch or turn up the heat, electricity will be there. If coal is not 

part of our national energy portfolio, that simple expectation is in 

jeopardy. Thank you. 

[The prepared statement of Mr. Coolidge follows:]

PREPARED STATEMENT OF DAN COOLIDGE, CHAIRMAN, CAMPBELL COUNTY

COMMISSIONERS

Chairman Lamborn and members of the Subcommittee, thank you for the opportunity to appear before you today. I am the Chairman of the Campbell County Commissioners. Campbell County is located in northeastern Wyoming and sits in the 

heart of the Powder River Basin, a mineral rich geologic area. The board of county 

16

commissioners is responsible for conducting the business of the State and providing 

core infrastructure and services to citizens at the local level. 

The citizens of Campbell County and the State of Wyoming have been major beneficiaries of surface coal mining since its inception in the Powder River Basin (hereinafter ‘‘PRB’’) in the mid 1970s. We believe the anti-coal stance of the current administration could be devastating to our local and State economy, as well as negatively 

affect the fragile economic recovery of our Nation. 

BACKGROUND AND HISTORY OF PRB COAL PRODUCTION

Wyoming is the largest producer of coal in the United States. The PRB has 13 

surface mines and up to 100 foot thick coal seams. Nine of the Nation’s 10 largest 

coal mines operate in the PRB. Coal is mined at the rate of 12 tons per second in 

the PRB and over 80 coal trains per day leave the PRB loaded with coal to destinations outside of Wyoming. 

Coal production from the PRB in Campbell County has more than doubled since 

1994. Since 2006, PRB coal production has averaged approximately 425 million tons 

per year. At these current production levels, the PRB could support over 400 years 

of continuous production. The infrastructure at our mines is in place not only to 

support these production levels, but also to increase it. Most of the coal mined in 

the PRB is burned as ‘‘steam’’ coal used in power plants to produce steam for generating electricity. 

DISTRIBUTION OF PRB COAL—POWERING OUR NATION

The majority of PRB coal is exported out of State to power plants in 34 States. 

In 2011, Texas was the top consumer, followed by Illinois, Mississippi, Iowa, and 

Oklahoma, respectively. Of the 20 States that consume over 8 million tons, all but 

one have electrical rates below the national average. Approximately 28 percent of 

the coal used for U.S. electricity generation in 2012 came from the PRB. This is 

equivalent to approximately 95 nuclear plants, 175 Hoover Dams or 200,000 wind 

turbines. As an example, Wyoming’s North Antelope Rochelle and Black Thunder 

coal mines accounted for 20 percent of the United States’ coal production by tons 

in 2012. In 2012, Wyoming mines produced 401 million tons, with a total value of 

approximately $4 billion. 

By utilizing the coal resources that currently exist in Wyoming, our country can 

strive toward energy independence for North America. Coal provides electricity for 

hundreds of thousands of American homes, hospitals, roadways and schools. The 

U.S. Geological Survey estimates that PRB recoverable coal reserves amount to 127 

billion tons in 2010. 

MINING COAL RESPONSIBLY AND RECLAMATION

The PRB coal mines have a long history of safe and environmentally responsible 

operation. Safety is the primary focus of mines in the PRB; and, consequently, their 

industry enjoys the second best safety record in Wyoming, behind the finance and 

insurance industry. 

In Wyoming, we have ‘‘our cake and eat it too’’. We have an abundance of natural 

resources within our State’s borders, including bentonite, coal, oil, gas, uranium, 

rare earths and timber. Yet, at the same time, we have world class wildlife, breathtaking views of our open spaces and clean air and water. In Wyoming, we reject 

the notion that energy policy should be an ‘‘either/or’’ discussion. We can have both, 

we do have both, and we will continue to have a robust energy economy, as well 

as a beautiful, clean environment. This is what is important to the citizens of Campbell County, as well as the rest of Wyoming. 

The mines operate with the utmost respect for the environment. The reclamation 

of the mines has been successful, reclaimed lands are superior to the native topography. All lands that are mined are reclaimed to original contour, grade and revegetated with natural grasses, shrubs and plants. Reclaimed lands provide premier 

habitat for domestic grazing, as well as forage for wildlife. The Land Quality Division of the Wyoming Department of Environmental Quality provides enforcement 

and administration for the State and Federal statutes regarding coal mining and 

regulations in Wyoming. 

PRB surface mining is a high-tech industry which utilizes computerized technology, modern equipment, a highly skilled workforce and strict adherence to safety 

measures. The quality of coal mined in the PRB is considered ‘‘clean coal’’. This is 

because PRB coal is a low sulfur and ash subbituminous coal resource. The organic 

structure of Wyoming coal is what makes it so desirable on the open market. 

17

ECONOMIC BENEFITS OF PRB COAL

Locally, the coal industry is the largest single contributor to Campbell County’s 

revenue stream. Attached is an exhibit which outlines the 6 year history of the assessed valuation of Campbell County. As evidenced by the exhibit, the ad valorem 

taxes on coal production account for approximately 64 percent of the total assessed 

value of Campbell County. In addition, the personal property tax on facilities associated with mining is a significant contributor, and sales tax revenue generated on 

equipment and services purchased by the mining industry is substantial. 

The unemployment rate in Campbell County is approximately 4.6 percent, which 

is far lower than the 7.6 percent as reported in May 2013. The mining industry is 

the largest employer in Campbell County. Direct employment in the area mines is 

approximately 5,400 people. This constitutes a large percentage in a county with a 

population of 46,000 and a State with a population of only 550,000. That does not 

account for the other jobs in service sectors directly related to mining and secondary 

jobs in retail and hospitality. Furthermore, a majority of PRB mine employees have 

never belonged to labor unions, which is an excellent reflection of the working conditions and compensation provided. A low unemployment rate equates to Campbell 

County citizens having more disposable income to spend locally, further turning 

over dollars into our local economy. 

It cannot be understated what a significant impact the mining industry has on 

the ability of local governments to keep pace with infrastructure and core service 

needs within our community. The significant revenues received from the mineral industry also afford local governments the ability to provide quality of life facilities 

for our citizens. Over the last 5 years, Campbell County, along with other local government partners, completed construction of a $52 million recreation center, a $44 

million multi events center, a $38 million technical education center for higher 

learning, as well as many other significant projects. The county has also been able 

to set aside significant cash reserves for the needs of future generations. Furthermore, local governments are able to provide substantial funding to human and social 

service organizations for those less fortunate in our communities. Finally, a benefit 

which cannot be ignored is the role the mining industry and its employees play as 

corporate citizens. The mining companies donate money to local charities and the 

employees donate countless hours of volunteer time which makes our community a 

better place to live. All this is accomplished with revenues directly attributable to 

the mineral industry. 

The State of Wyoming is a large benefactor of coal mining, as well. Through the 

coal lease bonus program, the state has provided desperately needed school facilities 

for school districts across the State. These dollars replace aging schools, as well as 

provide new schools for districts experiencing student population growth. Since 

1992, Wyoming has received over $2.6 billion in coal bid lease revenue. More than 

$2 billion of this money has gone to school capital construction. An additional $2+ 

billion has gone into the Federal coffers, as well. The severance tax money, in addition to the State’s share of mineral royalties, flows through the State to local governments to assist with the costs of providing essential governmental services. Wyoming has the lowest price for electricity in the Nation, averaging 6.2 cents per kilowatt hour. Wyoming citizens enjoy low energy costs due to the abundance of natural 

resources that we have under our feet. In 2011, the spot price for all Wyoming coal 

sales averaged $13.56 per ton. For the 430 million tons of coal produced in Wyoming 

in 2011, the value was close to $6 billion. Consequently, Wyoming has no State income tax, which is largely due to the contributions made by the energy industry, 

the backbone of our State’s economy. 

While the PRB is a great asset for Wyoming, it is also a catalyst for economic 

growth in other States. Low-cost electricity in the heartland of America starts in 

Campbell County, Wyoming. The 10 States that use the highest percentage of coal 

for electricity enjoy rates that are approximately 50 percent less than the cost of 

States that rely on other fuels. This cost-effective resource is a key element in driving U.S. industrial competitiveness and maintaining low electricity prices for residential and commercial consumers. In 2008, PRB coal producers acquired almost 

$2.3 billion of industrial supplies from over 47 different States. 

Finally, a point I’m sure that is not lost to Congress is the tremendous financial 

benefit to the Federal Government in lease bonuses, Federal royalties and income 

taxes that Wyoming coal resources provide to all Americans. In an economic climate 

of declining revenue and Federal sequestration, coal offers a way for the Federal 

Government to receive revenues. 

18

CHALLENGES OF MINING PRB COAL

The coal industry itself does not present any challenges to local governments. Perhaps the only challenge is keeping up with infrastructure needs associated with expanding mineral development. The proposed Road and Bridge budget alone for 

Campbell County fiscal year 2013/2014 is in excess of $7.6 million dollars for the 

year. This is a conscious decision to allocate resources to maintain governmental infrastructure for the public, as well as industrial users. Fortunately, the revenue generated from natural resources more than accommodates these expenses. 

The biggest challenge we face is the attack by the current administration on the 

life blood of our community, our State and every family in this country that will 

have to make the difficult decision of feeding their family or paying exorbitant electricity charges because coal is no longer part of our national energy policy. Mining 

coal is part of the custom and culture of Wyoming, with the first mines opening in 

1876 and having continuous production since that time. Multiple generations of Wyoming citizens have worked in the mines, paid for a college education or purchased 

a home with their wages from mining jobs. Coal miners are part of our State’s identity, and under the current administration, this way of life remains under attack, 

not only in Wyoming, but also in other States. 

CONCLUSION

If the concerns with coal mining are truly environmentally based, we should do 

everything we can to continue to effectively utilize the vast and available reserves 

of PRB coal, ‘‘clean coal’’. PRB coal is low sulfur and clean burning. Despite some 

public sentiment, coal will continue to be an abundant, accessible and affordable energy source far into the future. There are simply no other alternative energy sources 

that can replace it. Make no mistake, we need to continue to pursue and develop 

alternative energy sources, but in the meantime, we need to take care of an industry 

that will continue to provide affordable power to our Nation, other developing nations, as well as future generations. Americans have an expectation that when they 

flip a light switch on or turn up the heat, electricity will be there. If coal is not part 

of our national energy portfolio, that simple expectation is in jeopardy. 

Thank you.

19

Assessed Value—Past 6 Years 

2008 2009 2010 2011 2012 2013 INC/DEC CHANGE (Percent) 

PROPERTY: 

COAL $2,852,086,593 $3,321,045,794 $3,369,006,127 $3,527,937,616 $3,733,390,428 $3,542,732,502 ¥$190,657,926 ¥5.11OIL $475,025,590 $652,781,390 $364,821,149 $495,470,897 $656,493,579 $717,200,722 $60,707,143 9.25GAS $654,460,917 $844,766,895 $340,034,433 431,608,362 $422,726,277 $253,122,788 ¥$169,603,489 ¥40.12

URANIUM $0 $0 $0 $0 $6,691,844 $7,225,763 $533,919 7.98MISC MINERALS $5,002,535 $5,865,430 $5,854,400 $3,781,691 $5,292,590 $4,995,279 ¥$297,311 ¥5.62

PUBLIC UTILITIES $38,672,113 $55,092,824 $63,598,959 $60,099,469 $66,634,746 $64,741,256 ¥$1,893,490 ¥2.84

TELEPHONE $3,207,239 $3,321,282 $2,959,862 $2,176,744 $1,814,928 $1,940,137 $125,209 6.90PIPELINES $10,500,816 $10,208,059 $9,163,147 $25,568,134 $24,559,683 $19,979,674 ¥$4,580,009 ¥18.65REA’S $21,412,547 $26,253,183 $67,712,978 $71,789,273 $64,416,939 $71,083,420 $6,666,481 10.35RAILROADS $24,173,898 $29,132,239 $30,590,127 $32,934,812 $48,929,508 $47,518,648 ¥$1,410,860 ¥2.88

CABLE SAT CO. $817,421 $767,580 $784,789 $1,397,674 $1,240,510 $729,650 ¥$510,860 ¥41.18

LOCAL $637,462,775 $761,319,842 $762,140,943 $772,800,535 $806,874,459 $828,167,709 $21,293,250 2.64

TOTAL $4,722,822,444 $5,710,554,518 $5,016,666,914 $5,425,565,207 $5,839,065,491 $5,559,437,548 ¥$279,627,943 ¥4.79

PRODUCTION: 

COAL (TONS) 411,822,169 428,374,712 393,061,417 401,618,421 401,648,463 360,224,379 ¥41,424,084 ¥10.31

OIL (BBLS) 8,696,940 8,086,536 7,365,680 7,789,810 8,515,388 9,721,400 1,206,012 14.16GAS (MCF) 177,304,330 165,298,621 140,958,111 147,050,230 137,093,441 116,465,363 ¥20,628,078 ¥15.05

URANIUM (TON) 0 0 0 0 214,877 254,564 39,687 18.47SAND & GRAVE 3,482,942 2,921,971 ¥560,971 ¥16.11

UNIT VALUE: 

COAL $6.93 $7.75 $8.57 $8.78 $9.30 $9.83 $0.53 5.70OIL $54.62 $80.72 $49.53 $63.61 $77.09 $73.78 ¥$3.31 ¥4.29

GAS $3.69 $5.11 $2.41 $2.94 $3.08 $2.17 ¥$0.91 ¥29.55

URANIUM $0.00 $0.00 $0.00 $0.00 $31.14 $28.38 ¥$2.76 ¥8.86

SAND & GRAVEL $1.52 $1.71 $0.19 12.50

20

Mr. LAMBORN. Thank you for your testimony. 

Ms. Hutzler? 

STATEMENT OF MARY J. HUTZLER, DISTINGUISHED SENIOR 

FELLOW, INSTITUTE FOR ENERGY RESEARCH 

Ms. HUTZLER. Chairman Lamborn and members of the Subcommittee, thank you for the invitation to testify. Coal is the 

world’s most abundant fossil fuel. America’s known coal reserves, 

261 billion tons, constitute 27 percent of the entire world’s coal reserves. We are the Saudi Arabia of coal, with more than 1.5 times 

the reserves of our nearest competitor, Russia, and more than twice 

the reserves of China. 

If you include our in-place resources, the United States has 

enough coal to last over 9,000 years at today’s consumption rate. 

The prospect for utilizing this vast domestic resource should be 

great, from providing low-cost electricity to nearly 40 percent of 

American homes and businesses to innovative coal-to-liquid fuels 

technology that can provide gasoline, diesel fuel, and jet fuel. We 

have yet to experience the full benefit of America’s coal reserves. 

Some have speculated that coal’s decline in the United States reflects a global trend away from this energy-dense fuel source. The 

facts, however, are just the opposite. The International Energy 

Agency projects that coal will surpass oil as the world’s largest energy source by 2017. While U.S. coal production consumption have 

gone down in recent years, coal’s share of world energy consumption has increased to almost 30 percent in 2012, the highest since 

1970. China’s coal use alone has grown by over 40 percent in the 

last decade, and presently constitutes almost 70 percent of China’s 

energy consumption. 

Western European countries like Germany, which have implemented policies in the past to restrict the use of coal, are now realizing that such policies have handicapped economic development 

and failed to achieve the purported environmental benefits. The 

Germans are building coal-fired plants to replace retiring nuclear 

plants, and to back up intermittent renewable technologies. To fuel 

these plants, countries are looking to the United States, where coal 

exports were 17 percent higher in 2012 than in 2011. The Energy 

Information Administration projects that coal exports will continue 

at recent high levels, as the United States supplies our trade partners in China, the United Kingdom, South Korea, Brazil, and others. 

Some of that supply will come from places like the Powder River 

Basin, which accounts for more than two-fifths of all coal mined in 

the United States. Yet, unlike other coal-rich areas of the United 

States, the Powder River Basin is almost entirely under Federal 

control. Only 1.5 percent of Federal unleased lands have been determined to be available for coal production under standard government lease terms. As a result, the American taxpayers are losing 

an immense benefit to the Federal treasury, and our overall economy. If we evaluated the entire amount of federally owned coal 

that could be leased in the lower 48 at average prices by coal type, 

the worth of that resource would be approximately $22.5 trillion to 

the economy. These figures do not take into account the vast reVerDate 0ct 09 2002 13:35 Sep 05, 2014 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6602 X:\01ENER~1\01JY09~1\7-9-13~1\81894_~1 MARK
21

sources in Alaska, which has more coal in place than the entire 

lower 48 States. 

Many see coal’s problems as environmental. Yet coal has made 

significant strides, environmentally. According to the EPA, since 

1970 the total emissions of the 6 criteria pollutants have declined 

by 68 percent, even though our coal consumption has nearly doubled. Due to technological advances, coal-fired power plants are becoming even cleaner, and air quality is continuing to improve. 

Despite these advances, the White House announced last month 

the new agenda to impose even further restrictions on the use of 

coal in the United States These restrictions would require technology that is not currently commercially available. Some have labeled this plan the Industrial Counter-Revolution. In the end, jobs 

will suffer in nearly ever sector, from mining to transportation to 

electric utilities. 

Finally, some believe that low-cost natural gas has priced coal 

out of the market. However, production costs for coal-fired electricity in 2012 were slightly lower than that for natural gas. It 

should be noted that while natural gas prices are currently low, 

gas-directed rig activity is also low. This could impact future gas 

supplies, resulting in higher costs. Also, natural gas production in 

Federal lands, much like coal, is on a downturn. 

Coal production on Federal and Indian lands is down 9 percent 

from its peak level in 2008. Fewer coal lease sales have taken place 

on Federal lands, on average, during this Administration than during the prior two Administrations. Yet coal revenues were the largest ever in fiscal year 2012. 

Taking Asian and European markets as examples, U.S. policymakers should consider the vast benefits our domestic coal resources can provide to our own economy, and adopt more sensible 

policies to harness this resource both responsibly and efficiently. A 

true all-of-the-above energy strategy cannot dismiss the tremendous benefit that U.S. coal offers to both our own Nation and the 

world. 

Thank you for the opportunity to testify. 

[The prepared statement of Ms. Hutzler follows:]

PREPARED STATEMENT OF MARY J. HUTZLER, DISTINGUISHED SENIOR FELLOW, 

INSTITUTE FOR ENERGY RESEARCH

BACKGROUND

Coal is the world’s most plentiful fossil fuel and is the most abundant fossil fuel 

produced in the United States. Over 90 percent of the coal consumed in the United 

States is used to generate electricity. Coal is also used as a basic industry source 

for making steel, cement and paper, and is used in other industries as well. 

As the first concentrated energy source to be used by man, coal fueled the Industrial Revolution and lifted the burden of labor from the backs of men and animals. 

The Industrial Revolution was begun in England, the first nation to employ its coal 

resources to increase human productivity, in turn becoming the first economic and 

political superpower of the energy age. 

For over a century, coal served as the chief transportation energy source and fed 

the world’s commerce with railroads and steamships. Its transformation from an 

abundant but useless rock into a valuable energy source created an explosion of intellectual creativity that changed the course of human events. Currently, coal is 

22

1 Energy Information Administration, Monthly Energy Review, April 2013, http://

www.eia.doe.gov/emeu/mer/pdf/pages/sec7_5.pdf. 2 Energy Information Administration, International Energy Statistics, http://www.eia.gov/

cfapps/ipdbproject/IEDIndex3.cfm?tid=1&pid=7&aid=6. 3Department of the Interior, U.S. Geological Survey, http://pubs.usgs.gov/dds/dds-077/. 4 Energy Information Administration, http://www.eia.gov/coal/annual/pdf/table15.pdf.

used to meet almost 20 percent of America’s total energy demand and generate 

about 40 percent of all its electricity.1

The United States has enough coal reserves to last at least another 250 years, 

with reserves that are over one-and-one-half times greater than our nearest competitor, Russia, and over twice that of China. 2 America’s known coal reserves, 261 billion tons, alone constitute 27 percent of the entire world’s coal reserves. 

While known reserves are high, actual U.S. coal resources are much higher. ‘‘Reserves’’ represent coal that is readily evident as a result of ongoing mine operations, 

while ‘‘resources’’ include all those areas known to contain coal but have yet to be 

actually quantified by direct exposure due to the mining process. In-place U.S. coal 

resources (the entire estimated volume that is within the earth) totals 10 trillion 

short tons,3 and would last over 9,000 years at today’s consumption levels. Alaska 

is estimated to hold more coal than the entire lower 48 States. (While the EIA’s estimate of recoverable coal reserves in Alaska is 2.8 billion short tons,4 geological estimates by the U.S. Geological Survey put the in-place figure at over 6 trillion short 

tons.) The U.S. coal resources are clearly vast. 


81894.001.eps 81894.002.eps
23

5 Energy Information Administration, International Energy Statistics http://www.eia.gov/

cfapps/ipdbproject/IEDIndex3.cfm?tid=1&pid=7&aid=1. 6 Energy Information Administration, Monthly Energy Review, April 2013, http://

www.eia.doe.gov/emeu/mer/pdf/pages/sec6_3.pdf. 7 Energy Information Administration, International Energy Statistics, http://www.eia.gov/

cfapps/ipdbproject/IEDIndex3.cfm?tid=1&pid=7&aid=1. 8 BP Statistical Review of World Energy 2013, http://www.bp.com/en/global/corporate/

about-bp/statistical-review-of-world-energy-2013.html. 9 Energy Information Administration, China consumes nearly as much coal as the rest of the 

world combined, January 29, 2013, http://www.eia.gov/todayinenergy/detail.cfm?id=9751. 10 BP Statistical Review of World Energy 2013, http://www.bp.com/en/global/corporate/

about-bp/statistical-review-of-world-energy-2013.html.

In additional to its pivotal role as an affordable source of electricity, coal can also 

be converted into liquid fuels—gasoline, diesel, and jet fuel—as well as into an alternative to liquid natural gas (LNG) for use in synthetic and industrial gases. South 

Africa currently produces much of its liquid fuel from coal, using a process pioneered and used by Germany prior to World War II. Many nations, including our 

own, are exploring methods by which coal can be utilized in cleaner forms. 

American coal production is currently the second highest in the world (behind 

China),5 delivering 1.016 billion short tons in 2012.6 China produces over 3.8 billion 

short tons a year and still needs to import coal.7 While coal use has slightly decreased over the last few years in the United States due to low cost natural gas 

and government policies against coal use, its share of world energy consumption has 

increased to 29.9 percent in 2012, the highest since 1970.8

China and Germany, for example, are ramping up coal-fired electricity generation. 

The most recent data from the Energy Information Administration show that China 

consumes nearly as much coal as the rest of the world combined.9 China’s coal use 

has grown by 40 percent over the last decade. According to data from BP’s 2013 Statistical Review of World Energy, coal constituted almost 70 percent of China’s 2012 

energy consumption.10


81894.003.eps
24

11 Bloomberg, Germany to Add Most Coal-fired Plants in Two Decades, IWR Says, February 

27, 2013, http://www.bloomberg.com/news/2013-02-27/germany-to-add-most-coal-fired-plantsin-two-decades-iwr-says.html. 12 UK government, Outlook for new coal-fired power stations in Germany, the Netherlands 

and Spain, May 7, 2013, https://www.gov.uk/government/publications/poyry-report-to-decc-outlook-for-new-coal-fired-power-stations-in-germany-the-netherlands-and-spai. 13 Energy Information Administration, Monthly Energy Review, http://www.eia.gov/

totalenergy/data/monthly/pdf/sec6_3.pdf. 14 Energy Information Administration, Short-term Energy Outlook, http://www.eia.gov/forecasts/steo/report/coal.cfm. 15 Energy Information Administration, U.S. coal exports set monthly record, June 19, 2013, 

http://www.eia.gov/todayinenergy/detail.cfm?id=11751. 16 Energy Information Administration, Annual Coal Report, http://www.eia.gov/coal/annual/

pdf/acr.pdf.

In Germany, new coal-fired plants with a capacity of 5.3 gigawatts of electricity 

will come online this year 11 to replace retiring nuclear plants and to back-up intermittent renewable technologies. In total, 10 new coal and lignite power plants are 

currently under construction in Germany.12

To fuel these overseas plants, countries are importing U.S. coal. U.S. coal exports 

totaled 125.7 million short tons in 2012, 17 percent higher than in 2011, and the 

highest level in the history of the United States.13 About 75 percent of U.S. coal 

exports were shipped to Europe and Asia in 2012. Their desirability is continuing. 

The EIA reports that U.S. coal exports in March 2013 totaled 13.6 million short 

tons, almost 0.9 million short tons above the previous monthly export peak in June 

2012. EIA is projecting a third straight year of more than 100 million short tons 

of coal exports in 2013.14 The top five destinations of exported coal (in descending 

order) during March were China, Netherlands (a large transshipment point), United 

Kingdom, South Korea, and Brazil.15 China imports U.S. metallurgical coal that has 

a high Btu content that the country uses for steelmaking and steam coal for electric 

generation. 

POWDER RIVER BASIN COAL

The Powder River Basin is located in southeast Montana and northeast Wyoming 

and is the largest coal-producing region in the Nation, accounting for over two-fifths 

of all coal mined in the United States. In 2011, the Powder River Basin produced 

462.6 million short tons of subbituminous coal 16 used mainly for electricity generation. Wyoming is the largest coal producing State, producing more coal than the 

next six largest coal producing States combined. 

Powder River Basin coal seams are thick, facilitating surface mining and making 

extraction easy and efficient. As a result, the price of Powder River Basin coal at 


81894.004.eps
25

17 Bureau of Land Management, New Report Details Coal Resources on Federal Land In Powder River Basin, September 5, 2007, http://www.blm.gov/wo/st/en/info/newsroom/2007/september/NR_0709_03.html.

the mine mouth tends to be less than that of coal produced elsewhere in the Nation. 

Powder River Basin coal also has lower sulfur content than other coal varieties, 

making it attractive for electricity generators that must comply with strict EPA 

emission standards. More than 30 States receive coal from Wyoming, and several 

Midwestern and Southern States are highly or entirely dependent on Wyoming supply. Two railroads, operating the Powder River Basin Joint Line, move coal out of 

the Powder River Basin. 

Almost all of the coal in the Powder River Basin is federally owned. Therefore, 

mine expansions require Federal and State approvals and are dependent on actions 

from the Department of the Interior’s Bureau of Land Management. 

According to a multi-agency Government study required by the Energy Policy Act 

of 2005, the Federal Government owns 957 billion short tons of coal in the lower 

48 States, of which about 550 billion short tons are available in the Powder River 

Basin.17 The Bureau of Land Management has under lease or lease application 

about another 11.6 billion short tons of coal in the Basin. The report found that approximately 1.5 percent of the Federal mineral estate assessed in the Powder River 

Basin—or 82,000 out of 5.4 million acres—is available for coal mining under standard lease terms, which is about 27 billion tons of Federal coal. Nearly 88 percent 

of the Federal mineral estate in the basin is available for mining with varying degrees of access restrictions and about 11 percent is prohibited from being leased by 

statute or because of land-use planning decisions. Clearly, there is plenty of public 

land yet to be leased. 

COAL LEASE REVENUE STATISTICS

According to the Office of Natural Resources Revenue, revenues from coal leases 

were the highest ever in fiscal year 2012 at $1.44 billion dollars, 20 percent higher 

than in 2008 when coal production on Federal and Indian lands hit its peak. Royalty 

payments (the amount companies pay to produce the coal) were 16 percent higher 

than in 2008 and bonuses (the amount companies pay to obtain the lease) were 29 

percent higher.

Coal production on Federal and Indian lands peaked at 509 million short tons in 

fiscal year 2008 and has been decreasing slightly each year since then. In fiscal year 

2012, coal sales from production on Federal and Indian lands reached 461 million 

short tons, a 1.7-percent decrease from fiscal year 2011 and over a 9-percent deVerDate 0ct 09 2002 13:35 Sep 05, 2014 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6621 X:\01ENER~1\01JY09~1\7-9-13~1\81894_~1 MARK

81894.005.eps
26

18 Energy Information Administration, Sales of Fossil Fuels Produced from Federal and Indian 

Lands, FY 2003 Through FY 2012, May 2013, http://www.eia.gov/analysis/requests/

federallands/pdf/eia-federallandsales.pdf. 19 Bureau of Land Management, Total Federal Coal Leases in Effect, Total Acres Under Lease, 

and Lease Sales by Fiscal Year Since 1990, http://www.blm.gov/wo/st/en/prog/energy/

coal_and_non-energy/coal_lease_table.html. 20 Energy Information Administration, Annual Energy Review 2011, Coal Prices, http://

www.eia.gov/totalenergy/data/annual/pdf/sec7_21.pdf. 21 Energy Information Administration, Monthly Energy Review, http://www.eia.gov/

totalenergy/data/monthly/pdf/sec7_5.pdf.

crease since the peak in fiscal year 2008.18 According to data from the Bureau of 

Land Management, there have been fewer coal lease sales on average under the 

Obama Administration than there have been under the George W. Bush and the 

Bill Clinton administrations.19

If we evaluated the entire 957 billion short tons of federally owned lower 48 coal 

at an average price of $15 per ton for the subbituminous Powder River Basin coal 

and $35 per ton for the remainder of the Federal lower 48 coal,20 the worth of federally owned coal in the lower 48 States to the economy would be $22.5 trillion. Most 

of the coal resources in Alaska are deemed to be federally owned and are estimated 

to be 60 percent higher than those in the entire lower 48 States but are not included 

in these estimates. The United States, with the largest estimated coal resource base 

in the world, does not count Alaska’s coal in its resources, but Alaska has more coal 

in place than the entire lower 48 States.

COAL’S ENVIRONMENTAL ISSUES

Until recently, coal had been used to produce 50 percent of the Nation’s electricity, but is losing market share to natural gas and renewable energy as natural 

gas prices drop, renewable energy is mandated and subsidized, and new environmental regulations take effect. The Environmental Protection Agency (EPA) has 

produced regulations that essentially ban new coal plants and make its continued 

use in existing plants extremely costly. As a result, coal produced only 37 percent 

of our electricity in 2012.21

One of the biggest stated concerns about coal is air pollution. Coal produces more 

emissions than natural gas when burned. However, due to actions taken by industry 

and technological advances, our air quality is improving and new coal plants are 

cleaner than ever before. Pollution control technologies such as flue gas 

desulfurization, selective catalytic reducers, fabric filters, and dry sorbent injection 

have greatly reduced coal plant emissions. According to the National Energy Technology Laboratory (NETL), for example, a new pulverized-coal plant (operating at 


81894.006.eps
27

22 Email from J. Kukielka, NETL to Mary Hutzler, Institute for Energy Research, January 

9, 2009. See also Institute for Energy Research, The Facts About Air Quality and Coal-Fired 

Power Plants, http://www.instituteforenergyresearch.org/2009/06/01/the-facts-about-air-quality-and-coal-fired-power-plants/. 23 Environmental Protection Agency, Air Quality Trends, January 5, 2012, http://

www.epa.gov/airtrends/aqtrends.html. 24 Environmental Protection Agency, Air Quality Trends, http://www.epa.gov/airtrends/

aqtrends.html. The specific graphic is available here: http://www.epa.gov/airtrends/images/

comparison70.jpg. 25 New York Times, China Outpaces U.S. in Cleaner Coal-Fired Plants, May 10, 2009,

http://www.nytimes.com/2009/05/11/world/asia/11coal.html?_r=2&. 26Sierra Club, 150 Coal Plants Unplugged, http://www.sierraclub.org/coal/150plants/ Also, 

see U.S. Chamber of Commerce, Project, No Project, http://www.projectnoproject.com/category/

project/coal. 27Washington Post, Obama Administration cracks down on mountaintop mining, January 13, 

2011, http://www.washingtonpost.com/wp-dyn/content/article/2011/01/13/AR2011011307095

.html.

lower, ‘‘subcritical’’ temperatures and pressures) reduces the emission of nitrogen 

oxides (NOX) by 86 percent, sulfur dioxide (SO2) by 98 percent, and particulate matter by 99.8 percent, as compared with a similar plant having no pollution controls.22

These advances in technology have enabled large improvements in air quality. 

Since 1970, the total emissions of the six criteria pollutants have declined by 68 percent, even though energy consumption has increased by 45 percent, vehicle miles 

traveled have increased by 167 percent, and the economy has grown by 212 percent.23 (The ‘‘criteria pollutants’’ are carbon monoxide, lead, sulfur dioxide, nitrogen 

oxides, ground-level ozone, and particulate matter.) The following chart from EPA 

shows the increase in economic measures compared to the decrease in pollution 

emissions.24

As technology continues to advance, coal-fired power plants will become even 

cleaner and air quality will continue to improve. In fact, as the New York Times

has reported, China is actually constructing some coal plants that are cleaner than 

those allowed to be built in the United States.25 An irony of our current regulatory 

policy may be that China will ultimately become the world’s supplier of the most 

advanced clean coal plants, despite the U.S. coal resource base which dwarfs their 

own. 

Although coal produces relatively inexpensive energy, many activist groups adamantly oppose coal mining and coal-fired power plants. The Sierra Club, for example, has worked particularly hard to stop coal-fired power plants. They claim that 

they have prevented 150 new coal-fired power plants from being built.26

Coal mines, especially in Appalachia, are coming under increasing fire from environmental interest groups and the Obama Administration. The EPA revoked a clean 

water permit that the Army Corps of Engineers had previously awarded, despite the 

fact that, according to the Army Corps, the permit complies with West Virginia 

State water law and the Federal Clean Water Act.27 The problem, according to EPA, 

is that granting the permit would lead to changes in the conductivity (or salinity) 


81894.007.eps
28

28 Environmental Protection Agency, Final Determination of the U.S. Environmental Protection Agency Pursuant to § 404(c) of the Clean Water Act Concerning the Spruce No. 1 Mine, 

Logan County, West Virginia, http://water.epa.gov/lawsregs/guidance/cwa/dredgdis/upload/

Spruce_No-_1_Mine_Final_Determination_011311_signed.pdf. 29 Environmental Protection Agency, http://www.epa.gov/mats/. 30Washington Times, Chance to block Obama’s war on coal, June 19, 2012, http://

www.washingtontimes.com/news/2012/jun/19/chance-to-block-obamas-war-on-coal/. 31 Energy Information Administration, 27 gigawatts of coal-fired capacity to retire over next 

5 years, http://www.eia.gov/todayinenergy/detail.cfm?id=7290. 32Politico, Who is killing the coal-fired power plant?, December 6, 2011, http://

www.politico.com/news/stories/1211/69922_Page2.html.

of the water that might be detrimental to mayflies, stoneflies, and caddis flies.28 In 

other words, EPA denied the permit, not because of impacts on human health, but 

potential impacts on mayflies. 

The EPA has promulgated new regulations that target mercury from coal-fired 

power plants (the Mercury and Air Toxic Standards), which many call Utility MACT 

because the rule requires ‘‘Maximum Achievable Control Technology’’ for mercury at 

coal-fired power plants.29 These technologies must be installed over a tight 3-year 

period between 2012 and 2015, raising the cost of generating power from existing 

coal-fired plants where the economics make sense to install the technology, or forcing those plants to retire or to convert to natural gas. The National Economic Research Associates found compliance costs to be $21 billion per year and lost jobs to 

amount to 183,000 per year. Because the increased costs will be passed to consumers through higher electricity rates, businesses will be forced to reduce jobs as 

well. Studies project that retail electricity prices will increase between 10 and 20 

percent in most of the country and over 20 percent in the coal-dependent States in 

the Midwest.30

EIA announced that plant owners and operators expect to retire about 27 

gigawatts of coal-fired capacity by 2016—four times the 6.5 gigawatts of capacity retired between 2007 and 2011 mostly because of the new regulations imposed by the 

EPA. In 2012, electric generators were expected to retire 9 gigawatts of coal-fired 

capacity, the largest amount of retirements in a single year in America’s history. 

The 27 gigawatts of retiring capacity is 8.5 percent of total coal-fired capacity (318 

gigawatts). The 2012 record retirements are expected to be exceeded in 2015 when 

nearly 10 gigawatts of coal-fired capacity are expected to retire.31 Most of the units 

retiring are located in the Mid-Atlantic, Ohio River Valley, and Southeastern United 

States as shown in the map below. 

EIA’s numbers are based on current utility expectations. The Edison Electric Institute expects a larger number of forced retirements—about 48 gigawatts of coal 

units at 231 plants—between 2010 and 2022, or about 15 percent of the coal fleet.32


81894.008.eps
29

33Technology Review, Will Carbon Capture Be Ready On Time?, June 29, 2012, http://

www.technologyreview.com/news/428355/will-carbon-capture-be-ready-on-time/?ref=rss. 34The White House, The President’s Climate Action Plan, June 2013, http://

www.whitehouse.gov/share/climate-action-plan. 35Wall Street Journal, Can Gas Undo Nuclear Power?, January 29, 2013, http://professional.wsj.com/article/SB20001424127887323644904578272111885235812.html.

Further, pending greenhouse gas regulations will require all new coal-fired plants 

to reduce their greenhouse gas emissions even though there is no cost effective way 

to do so. This is essentially a ban on new coal-fired plants because the technology 

does not exist commercially for them to meet natural gas carbon dioxide levels that 

are required by the EPA regulation.33

Most recently, the President’s Climate Change Action Plan that he outlined in a 

speech at Georgetown University on June 25 includes reducing carbon dioxide emissions at existing coal-fired power plants as well as at new plants. According to his 

action plan, ‘‘President Obama is issuing a Presidential Memorandum directing the 

Environmental Protection Agency to work expeditiously to complete carbon pollution 

standards for both new and existing power plants.’’ 34 Many have indicated that 

these policies represent a ‘‘war on coal’’. 

Regulating carbon dioxide emissions for coal-fired plants will force mass coal plant 

retirements, causing unemployment at coal-fired power plants and coal mines. According to a report from the United Mine Workers of America, job losses associated 

with the closure of EPA-targeted coal units (due to Utility MACT and tighter greenhouse gas standards) could amount to more than 50,000 direct jobs in the coal, utility and rail industries, and an indirect job loss figure exceeding 250,000. 

Some have suggested that these closures are mainly due to the low price of natural gas made possible through shale gas discoveries. Regardless, it would be prudent for policy makers and analysts to consider the consequences of removing one 

of the major three sources of electrical generation from our fuel mix for electricity. 

Currently our electrical generation mix is largely coal, natural gas and nuclear 

power. While natural gas prices are currently low, gas-directed rig activity is also 

very low, which could have an impact on supplies in the out years. Further, the 

Wall Street Journal reported on January 29 that pressure is increasing to shutter 

nuclear power plants.35

If the United States decides that it can provide the vast majority of its electricity 

from natural gas, it must assure that those supplies will not be threatened by Government actions, including the federalization of hydraulic fracturing regulation or 

other attempts to require Federal permission to drill natural gas wells, as many 

have advocated. The consequences of skyrocketing electricity prices brought on by 

bad public policies will only exacerbate the economic ills our Nation faces going forward. Members of Congress should be concerned about a policy that seeks to put 

all of our energy eggs in one basket. 

CONCLUSION

The United States has a vast amount of coal resources; its coal reserves are larger 

than any other country in the world. While the world is using coal for almost 30 


81894.009.eps
30

percent of its energy consumption needs, the United States’ coal consumption was 

at just 18 percent of its energy demand last year. Low natural gas prices due to 

hydraulic fracturing and the Government’s regulatory policies concerning coal have 

resulted in coal losing a substantial share of the electric generation market. In order 

for coal producers to keep their employees in jobs, they have turned to the overseas 

market where coal is increasing in popularity. In Europe, coal is replacing retiring 

nuclear units and backing up intermittent technologies such as wind and solar. In 

China, America’s metallurgical coal is used to make steel and our steam coal is used 

for electricity generation. 

Similar to the oil and gas industry statistics, coal production on Federal and Indian lands is declining; it is over 9 percent less than its peak production in fiscal 

year 2008. Fewer coal lease sales have taken place on Federal lands on average during the Obama Administration than during the prior two administrations. Though 

production is less and lease sales are fewer, coal revenues from coal lease sales and 

production have been the largest ever in fiscal year 2012. 

Thank you for the opportunity to supply this testimony for the Committee’s use. 

Mr. LAMBORN. Thank you for your testimony. And finally, Ms. 

Kendall. 

Mr. HUFFMAN. Mr. Chair, before Ms. Kendall is recognized for 

her testimony, I ask unanimous consent that she be recognized and 

given the opportunity to respond to the rather unique and certainly 

unfounded allegations that you made toward her before the testimony began. 

I strongly take issue with that intense partisan and ad hominem 

attack. I think it is only fair that the witness have a chance to respond. And I would even argue that the Committee rules, rule 3(d), 

which require that Members limit their remarks to subject under 

consideration by the Committee, has certainly been stretched, if not 

broken, by those remarks. 

Mr. LAMBORN. Well, I would disagree with you. There is nothing 

personal when you point out that someone has not produced subpoenas, for instance. That is not a personal attack, that is a——

Mr. HUFFMAN. The BP Horizon oil spill? 

Mr. LAMBORN. That is——

Mr. HUFFMAN. This is part of the matter under consideration 

today? That was a far-ranging personal attack, unlike anything I 

have heard—I have only been here for 7 months. 

Mr. LAMBORN. Well——

Mr. HUFFMAN. An absolute extraneous ad hominem attack on a 

witness. She deserves to respond. 

Mr. LAMBORN. She is free to use her 5 minutes however she 

wishes. And if she wishes to answer in the way you have described, 

she is free to do that. 

Ms. Kendall, you are recognized for 5 minutes. 

Mr. HUFFMAN. Are you objecting, then, to my request for unanimous consent? 

Mr. LAMBORN. Yes. 

STATEMENT OF MARY L. KENDALL, DEPUTY INSPECTOR GENERAL, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT 

OF THE INTERIOR 

Ms. KENDALL. Mr. Chairman, I am acutely aware of the view 

that certain members of this Committee hold about me. That 

should not, however, diminish or eclipse the value and import of 

the good work done by the capable OIG staff. I am extremely proud 

31

of the work that the OIG has done under my leadership, and I am 

unwavering in my belief that it is both objective and independent. 

That said, I am happy to be here to discuss the OIG report on 

the coal management program at the Department of the Interior. 

Coal management is a high-dollar program for the Department. In 

fiscal year 2012 the Department collected $876 million in coal royalties and over $1.5 billion in bonuses. The Bureau of Land Management, or BLM, is responsible for managing the coal program for 

the Department, which makes up roughly 40 percent of the total 

coal production in the United States. In fiscal year 2011, 473 tons 

of coal were produced from these mining operations. The largest 

coal-producing State is Wyoming, primarily from the Powder River 

Basin. 

We conducted our evaluation to determine if the Department’s 

coal leasing process obtains a fair return on coal, produced from 

public and Indian lands, and assessed the effectiveness of the Department’s coal lease inspection and enforcement program. We 

found several areas in which BLM could improve its coal program. 

I will discuss a few of these. 

BLM is responsible for obtaining fair market value for coal production on public and Indian lands. Mineral valuation expertise is 

critical for setting fair market value. But BLM does not use the Department’s authority on valuation for minerals. We believe that 

BLM’s coal lease sales would be greatly enhanced if the Office of 

Valuation Services assumed the appraisal function. 

In addition, BLM does not fully account for export potential in 

developing fair market value. A reported 125 million tons of coal 

were exported in 2012, an amount that has almost doubled in 5 

years. The price of exported coal has also more than doubled in 

only 4 years. This trend suggests that export potential should be 

considered in calculating fair market value. Accurately calculating 

fair market value is particularly important in coal leasing, because 

a competitive market does not generally exist for coal leases, making fair market value a substitute for competition. 

BLM is required by law to reject bids that fail to meet or exceed 

fair market value. We found instances, however, in which BLM accepted bids below fair market value, resulting in over $2 million in 

lost revenue. We believe that any bid below fair market value 

should be rejected. 

Prior to a lease sale, a mining company explores the site for the 

existence and extent of coal seams and considers the energy content and quality of the coal. The company must then furnish this 

information to BLM, which uses the information to develop fair 

market value. BLM does not, however, independently verify this information, and places itself at risk of receiving and relying upon incorrect data from mining companies. 

We also found that BLM may not be getting a fair return for 

lease modifications. BLM typically approved a substantially lower 

price for modifications, averaging more than 80 percent lower than 

the price used in the regular lease sales. We estimated a potential 

$60 million in lost revenues because of this practice. 

BLM does have an active inspection and enforcement program, 

but runs the risk of inconsistencies among its State offices due to 

its decentralized organization structure and outdated and never-fiVerDate 0ct 09 2002 13:35 Sep 05, 2014 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6602 X:\01ENER~1\01JY09~1\7-9-13~1\81894_~1 MARK
32

nalized guidance. BLM also has an inspector certification initiative 

underway that covers all personnel who inspect solid minerals, including coal. This initiative should improve the quality and consistency of inspections and enforcement. 

This concludes my formal testimony today. 

I would be happy to answer any questions members of the Committee may have. 

[The prepared statement of Ms. Kendall follows:]

PREPARED STATEMENT OF MARY L. KENDALL, DEPUTY INSPECTOR GENERAL, OFFICE

OF INSPECTOR GENERAL, U.S. DEPARTMENT OF THE INTERIOR

Mr. Chairman and members of the Committee, thank you for the opportunity to 

testify today about the Office of Inspector General’s evaluation of the U.S. Department of the Interior’s management of its coal program. 

Coal management is a high-dollar program for the Department. In fiscal year 2012, the Department collected $876 million in coal royalties, and over $1.5 billion 

in bonuses from six lease sales. The budget for coal management is approximately 

$9.5 million. 

The Bureau of Land Management (BLM) is responsible for managing the coal program for the Department. Coal from lands controlled by BLM makes up roughly 40 

percent of the total coal production in the United States. BLM manages a total of 

314 leases—306 leases on public lands and 8 on Indian lands. In fiscal year 2011, 

473 tons of coal were produced from these mining operations. Seventy-one companies operate about 80 mines on public and Indian lands. Four companies account 

for over 90 percent of BLM’s sales volume. The largest coal producing State is Wyoming, primarily from the Powder River Basin. In fiscal year 2011, Wyoming accounted for 83 percent of the Department’s total coal production and 86 percent of 

its coal revenues. 

We conducted our evaluation to determine if the Department’s coal leasing process 

obtains a fair return on coal produced from public and Indian lands. We also assessed the effectiveness of the Department’s coal lease inspection and enforcement 

program. 

We found several areas in which BLM could improve the coal leasing process—

in valuation, bid acceptance, internal controls, exploration integrity, modifications, 

and royalty rate reduction—and strengthen the inspection and enforcement program. 

FAIR MARKET VALUE

BLM is responsible for obtaining fair market value (FMV) for coal produced on 

public and Indian lands. FMV is calculated by considering a number of variables. 

Mineral valuation expertise is critical for setting FMV, but BLM does not use the 

Department’s Office of Valuation Services (OVS), which is the Department’s authority on valuation for all minerals extracted from public lands. We believe that BLM’s 

coal lease sales would be greatly enhanced if OVS assumed the appraisal function. 

In addition, BLM does not fully account for export potential in developing FMV. 

The U.S. Energy Information Administration reported that 125 million tons of coal 

were exported in 2012, an amount that has more than doubled in 5 years. The price 

of exported coal has also more than doubled in only 4 years. This trend suggests 

that export potential should be considered in calculating FMV. Exported coal volumes from the Powder River Basin represent about 1.6 percent of production (6 million tons), but mining companies are actively exploring methods to transport the 

coal to western ports to export the coal overseas. Export volumes have stabilized in 

2013 but are expected to rise in the long term. 

Accurately calculating FMV is particularly important in coal leasing because a 

competitive market does not generally exist for coal leases, making FMV a substitute for competition. Over 80 percent of the sales for coal leases in Wyoming’s 

Powder River Basin had only one bid in the past 20 years. None had more than 

two bidders on a sale. The lack of competition is attributed to BLM’s decision in 

1990 to discontinue large-scale regional lease sales and use smaller scale lease sales 

to continue or extend the life of existing mines. 

The Mineral Leasing Act requires BLM to reject bids that fail to meet or exceed 

FMV. We found four instances, however, in which BLM accepted bids below FMV, 

resulting in over $2 million in lost revenue from the bonuses. We believe that any 

bid below FMV should be rejected. When a bid is rejected by BLM, however, the 

sales process starts all over. We recommended that BLM explore options to stop this 

33

inefficient practice. Entering into direct negotiations with the unsuccessful bidder 

is one possible solution. This may require a change to legislation and applicable regulations but may be worth the effort, as about 25 percent of lease sales in the Powder River Basin, which is among the highest producing coal areas on public lands, 

are rejected and go through the time-consuming process of lease reoffer. 

INTERNAL CONTROLS

We also found that BLM has internal control weaknesses regarding FMV data security and review and approval of FMV determinations. Procedures for safeguarding 

FMV data are inconsistent among BLM offices, and in one State office, a single individual computes FMV, increasing the possibility of undetected errors, a higher risk 

of fraud, and an inability to move sales forward if that person is absent. 

EXPLORATION INTEGRITY

Prior to a lease sale, a mining company explores the site for the existence and 

extent of coal seams and considers the energy content (BTU) and quality (sulfur, 

ash, water content) of the coal. The company is required to furnish this information 

to BLM, which uses the information to form the basis of the FMV determination. 

BLM does not, however, independently verify this information. While a BLM handbook recommends that staff witness exploration activities, at least one State office 

Montana) does not conduct such oversight. We did not find specific indicators of 

data misrepresentation but, without verification, BLM places itself at risk of receiving, and relying upon, incorrect data from mining companies. 

MODIFICATIONS

We found that BLM may not be getting a fair return for lease modifications. In 

the lease modifications we reviewed, BLM typically approved a substantially lower 

price—averaging more than 80 percent lower—than the price used in the regular 

lease sales during the same period. We estimated a potential $60 million in lost revenues. While the modifications may have been justified, we could not validate BLM’s 

decisionmaking process with the documentation available to us. 

ROYALTY RATE REDUCTION

Mining companies may apply for a royalty rate reduction for a number of reasons. 

Our review showed that BLM appropriately evaluated and managed royalty rate reductions. When a royalty rate reduction is based on financial hardship, however, 

BLM program officials generally do not have the expertise to evaluate a company’s 

financial statements and other supporting documentation. We recommended that in 

such cases, BLM seek the assistance of the Office of Natural Resources Revenue 

(ONRR), which has accounting expertise in financial records analysis. 

INSPECTION AND ENFORCEMENT

BLM has an active inspection and enforcement program. The Bureau runs the 

risk of inconsistencies among its State offices, however, due to its decentralized organizational structure and outdated and never-finalized guidance. The practice of 

BLM coal inspectors is to work informally with mining companies to resolve noncompliance. This is due, in part, to the ineffective tools they have for enforcement. 

The Notices of Noncompliance that BLM uses to cite companies for infractions do 

not have a financial penalty associated with them. BLM told us that it is limited 

by current statutory authority. 

INSPECTOR ROTATION AND TRAINING

BLM has assigned inspectors to the same mines for many years, sometimes decades. This may result in over familiarity with mine operators and complacency in 

inspections and enforcement. BLM has no policy or practice for cross-training inspectors. One inspector may see things differently than another, and cross-training 

would assist BLM in succession planning. 

BLM does have an inspector certification initiative underway that covers all personnel who inspect solid minerals, which includes coal. This initiative should improve the quality and consistency of inspections and enforcement. 

THE OFFICE OF NATURAL RESOURCES REVENUE’S POWDER RIVER BASIN PROJECT

Outside of our Coal Program Evaluation, we have been monitoring the Office of 

Natural Resources Revenue’s coal audits focusing on export coal sales from the Powder River Basin. In December 2012, ONRR formed a Task Force Team, consisting 

34

of auditors from ONRR and the States of Montana and Wyoming, to review potential export sales involving Federal coal mined from the Powder River Basin to ensure that the royalty calculations and payments complied with lease terms. ONRR 

developed a comprehensive Project Action Plan to be completed by December 2015, 

with additional reviews beyond 2015 if warranted. 

This concludes my formal testimony today. I would be happy to answer any questions members of the Committee may have. 

Mr. LAMBORN. All right. Thank you all for your testimony. We 

will now begin our questions. Each Member is limited to 5 minutes 

of questions. But we may have additional rounds. I will begin with 

myself. 

Ms. Hutzler, for many years some have suggested that U.S. taxpayers do not receive a fair market value for mineral royalties and 

revenues derived from the production of oil, natural gas, and coal 

on Federal lands. The recent IG report suggests that the Government might be receiving less revenue, approximately $62 million 

out of $2.4 billion in total revenues, for coal, than it could. Do you 

know of any other examples where the Government might be foregoing revenues from energy development on Federal lands and waters? 

Ms. HUTZLER. Yes. If we take a look at oil and gas development, 

we, in the year 2008, actually received $24 billion in revenues from 

leasing. That includes the bonuses and the royalties. It turns out 

that the level of revenues that we have received since 2008 are 

much lower, about half as much in fiscal year 2012 as we received 

in 2008. If we had continued with the program we had in fiscal 

year 2008, we would have gotten an additional $54 billion. 

Now, that is just dealing with history. If we deal with oil and gas 

development on Federal lands and opening more of it, we could 

even garner more revenues. For instance, the Congressional Budget 

Office did a report recently that showed if the Arctic National Wildlife Refuge were opened to leasing, that we would get $5 billion in 

revenue over the next 10 years. 

The Institute for Energy Research did a study taking a look at 

the CBO analysis, and then taking a look at the macroeconomic effects. And we found that Federal tax revenues could increase $2.7 

trillion if we opened up additional lands to leasing, oil and gas 

leasing. And, in fact, to the economy we would add $14.4 trillion. 

Mr. LAMBORN. OK, thank you. The United States, without adopting the Kyoto Protocol, reduced its CO2 emissions further than the 

European countries did, even though they did adopt the Kyoto Protocol. Recently, both U.S. and European climate scientists that believe in an anthropogenic climate change, have made public statements acknowledging that there has been no warming for the past 

17 years, worldwide, even though CO2 concentrations in the atmosphere have continued to rise. 

As such, many European countries are abandoning their climate 

strategies and their reliance on expensive, renewable energy 

sources, and are once again building coal-fired power plants. What 

lessons can the United States learn from the European experience? 

Ms. HUTZLER. As you indicated, the Europeans did put in a cap 

and trade program to try to reduce emissions. The United States 

reduced emissions by 12 percent since 2005, if you look at 2012 

data. That is way close to the President’s goal of a 17 percent reVerDate 0ct 09 2002 13:35 Sep 05, 2014 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6602 X:\01ENER~1\01JY09~1\7-9-13~1\81894_~1 MARK
35

duction by 2017. So we are well on our way there, where the Europeans have had to suffer because of their program. 

For instance, in Germany, their electricity prices are three times the electricity prices in the United States. They pay about $.34 per 

kilowatt hour to residential customers, where we are about $.11 or 

$.12 per kilowatt hour. So that is a tough lesson to learn. Plus, 

even though they were planning not to build coal plants, they are 

building coal plants in Germany. They are building about 10 coal 

plants because they have to back up their intermittent technologies 

with fossil fuel technologies. And in Europe, natural gas prices are 

very high, so they are choosing to do it with coal. 

Mr. LAMBORN. OK, thank you. And last, with the number of coalfired power plants projected to shut down over the next several 

years as a result of the Obama Administration’s regulatory agenda, 

how is that going to affect the availability of electricity in this 

country if that does, indeed, take place? 

Ms. HUTZLER. That is a very good question. Obviously, the Administration wants us to build wind and solar plants to back up all 

of those—well, to replace those coal plants. 

Unfortunately, those intermittent technologies need to be backed 

up. The wind doesn’t blow all the time, the sun doesn’t shine all 

the time. So you can’t guarantee that they are going to be available 

when you want to turn the switch on for electricity. So, therefore, 

we need other plants. And we are turning toward natural gas now. 

So we are going to have to build natural gas plants and we are 

going to have to eventually see a higher price, because natural gas 

prices will eventually increase. 

Taking away our coal-fired power plants, is taking away a substantial amount of our electricity generation. 

Mr. LAMBORN. OK, thank you. I now recognize the acting Ranking Member, Mr. Huffman of California. 

Mr. HUFFMAN. Thank you, Mr. Chairman, and thanks to all the 

witnesses for traveling here and sharing your testimony with us 

today. 

I want to begin with Acting Inspector General Kendall. Again, inspector general, I think it is very unfortunate that you had to withstand the insulting remarks that were leveled at you on an ad 

hominem basis earlier today. But it is almost laughable that you 

would be characterized as some kind of a lap dog for the Administration when, in fact, you oversaw an investigation that found 

major flaws in the Administration’s approach to these leases. And so, what I want to ask you about is, we have heard a $62 

million figure that you offered up as the possible loss to the taxpayers. Whether you actually attempted to quantify the full extent 

that BLM may have failed to accurately reflect Federal coal before 

the leasing, and so, how you would characterize the $62 million estimate? Is it is a conservative estimate? What would you say about 

that? 

Ms. KENDALL. It is hard for me to call it, really, anything. It is 

based on the sample of leases that we looked at. And the way we 

looked at it, we could not extrapolate out the entire body. It is just 

one approach to looking at a program. In this case it was a select 

sample. It was not the kind of sample where we could figure out 

what the whole universe was. 

36

Mr. HUFFMAN. All right. I realize I am asking you to speculate. 

But if you were asked to speculate, would you say the actual number is more likely to be higher or lower than that amount? 

Ms. KENDALL. I would say higher. 

Mr. HUFFMAN. Thank you. I want to ask a question of Ms. 

Hutzler. I noticed in your testimony that you zeroed in on 2008 as 

a benchmark year to talk about revenues from oil and gas leasing 

when you were asked about that by the Chair. But there was something a little bit different going on in 2008 that might explain that 

very high revenue spike, wasn’t there? 

Ms. HUTZLER. Well——

Mr. HUFFMAN. I mean didn’t the price of oil rise to $147 per barrel in 2008? 

Ms. HUTZLER. Yes. I thought you were probably going to center 

in on that figure, and that is true. But you have to realize that the 

Arctic area was open to leasing, and there were high bids by a 

number of oil companies in that area. So it was really the fact that 

oil companies wanted to start drilling in the Arctic that opened it, 

not necessarily that there was a high oil price. That did change the 

moratorium on offshore drilling, of course. 

Mr. HUFFMAN. But there is another fact that I think was omitted 

in your testimony, too, and that is that we are producing more oil 

and gas from Federal lands today, in 2013, than we did in 2008. 

Isn’t that true? 

Ms. HUTZLER. Gas has been going down and continually on Federal lands, so I do not believe that is true. 

Mr. HUFFMAN. Oil? 

Ms. HUTZLER. It turns out oil had its peak in 2010 and it has 

declined in 2011 and 2012. 

Mr. HUFFMAN. But the oil produced today from Federal lands is 

higher than the benchmark year you used, 2008, correct? 

Ms. HUTZLER. It might be; I would have to check those statistics. 

Mr. HUFFMAN. All right. We heard you testify about what you 

view as expansive reserves, almost unlimited reserves of coal. What 

can you tell us about coal production costs in recent years? Where 

have they been trending? 

Ms. HUTZLER. Well, coal prices have been going up. 

Mr. HUFFMAN. Specifically production costs. 

Ms. HUTZLER. Well, I know the delivered price of coal has been 

going up. If you take a look at——

Mr. HUFFMAN. Delivered cost going up about 7, 8 percent a year? 

Ms. HUTZLER. But you have to realize that includes the transportation cost. 

Mr. HUFFMAN. Sure. 

Ms. HUTZLER. And oil prices have gone up and the transportation 

prices have gone up. If you take a look at——

Mr. HUFFMAN. Does it sound about right——

Ms. HUTZLER. If you take a look at the Powder River Basin——

Mr. HUFFMAN. OK. 

Ms. HUTZLER [continuing]. I think coal there is still around $15 

a ton, which isn’t that much higher than it was a few years ago. 

So we are still getting very inexpensive coal at the mine mouth. 

Mr. HUFFMAN. Coal goes by train, right? 

Ms. HUTZLER. Yes, it does. 

37

Mr. HUFFMAN. OK. And production cost, does it sound about 

right that they have been going up 8 to 10 percent per year, on average? 

Ms. HUTZLER. I would have to check that. 

Mr. HUFFMAN. What about the profitability of extracting all of 

these reserves that you mentioned? Have you done any studies on 

the actual profitability, or are these just sort of hypothetical reserves that could be accessed? 

Ms. HUTZLER. No, reserves are, by definition, coal that you can 

get economically at today’s prices, so 261——

Mr. HUFFMAN. So you have studied the economic recoverability 

of all the reserves that you mentioned? 

Ms. HUTZLER. I am using EIA numbers. And 261 billion short 

tons of coal are economic today. Those are our reserves. 

Mr. HUFFMAN. All right. Thank you. I will yield the balance of 

my time. 

Mr. LAMBORN. Thank you. Mrs. Lummis from the great State of 

Wyoming. 

Mrs. LUMMIS. Thank you, Mr. Chairman. Let me get a couple of 

things straight about the BLM’s process for valuing coal. 

Ms. Kendall, who comes up with the minimum price for coal? 

Ms. KENDALL. Well, BLM has a process by which they come up 

with a fair market value. And——

Mrs. LUMMIS. OK. And when they come up with a fair market 

value, does the bidder know what fair market value the BLM has 

put on that coal when they bid? 

Ms. KENDALL. No, they do not. 

Mrs. LUMMIS. OK, so it is a blind bidding process. The BLM sets 

the price, and companies bid. And if they bid below that price, 

what happens? 

Ms. KENDALL. Well, BLM is supposed to reject the bid. 

Mrs. LUMMIS. OK. Well, and most of the time that happens. Correct? 

Ms. KENDALL. Yes. 

Mrs. LUMMIS. So you found two instances where they accepted a 

bid that fell below their own minimum? 

Ms. KENDALL. We found four. 

Mrs. LUMMIS. Four. And do you know why they accepted the bid 

below minimum? Was it just a scrivener’s error, a mistake, or 

something? 

Ms. KENDALL. No, no. They accepted it intentionally. They called 

it a slim margin, or they told our auditors that it was a slim margin. And rather than have to go back and rebid, they worked with 

the company, the bidder, to accept the bid. 

Mrs. LUMMIS. Can you explain why these are not competitive, in 

most cases, leases? 

Ms. KENDALL. Well, what I understand is that there are a very 

limited number of companies who——

Mrs. LUMMIS. Not only that. Have you ever been to the mines? 

I mean they are very far apart. And the Powder River Basin is 

enormous. And the infrastructure that is required to establish a 

coal mine through the permitting process, through the removal of 

top soil, the removal of overburden, the coal mining itself, the replacement of the overburden, the replacement of the top soil, the 

38

reseeding of the top soil, the contouring back to the original contours, that is how mine reclamation, mining and reclamation 

works. Correct? 

Ms. KENDALL. You are far more knowledgeable about that than 

I. 

Mrs. LUMMIS. Well, That is how it works. And consequently, you 

can’t just go in and say, ‘‘Hey, I am going to go compete against 

Cloud Peak,’’ or Arch Coal, and say, ‘‘My gosh, I am going to set 

up a coal mine. I am going to go in there and bid against them and 

outbid them and set up a coal mine.’’ It doesn’t work that way, does 

it? 

Ms. KENDALL. I honestly couldn’t say, one way or the other. 

What I know is that they are required by statute to establish fair 

market value, and that is what they are—and they are also——

Mrs. LUMMIS. OK. So they establish fair market value. And it is 

a blind number to the bidder. So aren’t there occasions where the 

bidder bids more than the established fair market value? 

Ms. KENDALL. I believe there are. 

Mrs. LUMMIS. So, some companies are paying more. Actually, the 

American taxpayer is getting more for some of that coal, as opposed 

to undervalued. Correct? 

Ms. KENDALL. That could be. 

Mrs. LUMMIS. And did you look into that? 

Ms. KENDALL. That was not part of what we looked into. At least 

the leases that we reviewed, we did not find, as far as I know, any 

where they were overbid. 

Mrs. LUMMIS. You didn’t see any case where the BLM set a price, 

and the bid that was accepted was higher than the minimum that 

was set, I mean, how remarkable, that these coal companies could 

bid to exactly the number that the BLM set, without going over, 

even a penny. 

Because, as you know, one cent per ton on the 360, what, a mil- lion tons that were mined, that is, like, $3 million. So a one-centper-ton overbid or underbid, you know, we are talking about real 

money, one cent. So they all hit them right on the mark, except 

those few that fell under? 

Ms. KENDALL. Congresswoman Lummis, I would have to get back 

to you with the details on that. I just, I can’t say, one way or the 

other, right here. 

Mrs. LUMMIS. Does the blind process generally work to the benefit of the American taxpayer, would you say? 

Ms. KENDALL. I would say that, for the most part, the American 

taxpayer gets a fair return on——

Mrs. LUMMIS. Gets more money. Are you willing to say that? 

Gets more money? 

Ms. KENDALL. I cannot say that here today, no. 

Mrs. LUMMIS. But you are willing to say that the differences 

that—I heard the gentleman before me say that these were major 

flaws. Really? Would you characterize what you identified as major 

flaws? Or were they paperwork matters, accounting matters that 

the BLM, as I understand it, has said, ‘‘Yes, we will take your recommended changes’’? Is that——

Ms. KENDALL. The BLM has accepted all of our recommendations. Yes. 

39

Mrs. LUMMIS. Thank you, Mr. Chairman. I yield back. 

Mr. LAMBORN. Thank you. Mr. Lowenthal? 

Dr. LOWENTHAL. Thank you, Mr. Chair. And I would like to preface my remarks by saying after going through and looking at the 

reports, that I concur with Congressman Huffman, that this unwarranted attack on the Department of the Interior’s coal leasing 

process was uncertainly unwarranted. 

And I am especially impressed where one agency of government 

looks at another within it and really clearly defines some of the 

issues there. So I am quite impressed with how your operation actually works. 

What I would like to do, though, is to ask a question from this 

report that said, when it was talking about the BLM process for 

computing the value of leases, when you indicate that in part that 

it is flawed, that it does not use the DOI’s Office of Valuation Services to prepare the fair market value appraisals, it continues to 

prepare the appraisals using its own appraisers, then you go on to 

say, ‘‘which violates the secretarial order issued in 2010 that was 

supposed to foster independence by removing the valuation process 

from the BLM.’’

Is this still today accurate? And why doesn’t the BLM not follow 

the secretarial order? 

Ms. KENDALL. I can’t tell you why BLM doesn’t follow it. I hope 

that, as a result of this report, they will begin to do so. 

My understanding is that the difference between valuing minerals and valuing land is significant, and that the considerations 

that go in to each of those are very, very different, which is why 

our recommendation was for the minerals here that the office that 

is designated as the Department’s expert be consulted and be used 

for that valuation. 

Dr. LOWENTHAL. I thank you, and I yield back my time to the 

Ranking Member, if he would like to——

Mr. HUFFMAN. No, I have no questions. 

Mr. LAMBORN. OK. Representative Daines. 

Mr. DAINES. Thank you, Mr. Chairman. Last week I spent some 

time out in eastern Montana, went to the coal operations there 

around Colstrip. It is always a good reminder, as we frame this discussion of where the electricity comes from. According to the Government’s own stats, about 40 percent of Americans’ electricity 

comes from coal, about 30 percent from natural gas, about 20 percent nuclear, 7 percent hydro. It is about 3 percent wind, and about 

0.1 percent solar. So, just a reminder about how important this debate is, because it is our number-one source of electricity, and a 

cheap source of electricity. 

In fact, I saw my first electric car generation system, where you 

can plug in your Tesla and so forth, not in Montana. It was actually in California. I am not opposed to electric cars, but we ought 

to remind the American consumer that, based on these statistics, 

a sign on the back of that Tesla might read, ‘‘This car likely powered by coal.’’ That is what the statistics would show us. 

By the way, when I toured Colstrip last week in my home State, 

great, big, power generation plants, coal-fired, they tell me now 

they used to use 1,000 homes per megawatt as their ratio. Now it 

is 750 homes. Why is that? Americans are using more electricity. 

40

They like their flat-screen TVs, they like their mobile devices, they 

like their computers. We are using more electricity, hence why it 

is so important we have a low cost source of electricity. 

I was struck by the President’s science advisor, on the same day 

that he announced his climate change agenda, when the science advisor, Daniel Schrag, said, and I quote from the New York Times, 

‘‘War on coal is exactly what is needed.’’ And I would humbly submit that what the President is doing here is declaring war on 

American jobs, declaring war on the American consumer and American families, and, frankly, declaring war on, if you look at what 

is going on in Montana, as Chairman Old Coyote of the Crow Nation said, a 47 percent unemployment rate on the Reservation. 

What is needed is a war on unemployment, not a war on coal. And 

coal is a way that we can generate more jobs. 

With that as background, I would like to turn my questions here 

to Chairman Old Coyote. Could you elaborate more on how important resource development is in generating the revenue and jobs 

necessary to sustain your Reservation? 

Mr. OLD COYOTE. The substantial coal resources we have, as 

Crow people, one area I would like to continue is the vision of the 

late Chairman Vann, is to have the Crow Nation, with a project 

partner, build the first coal-to-liquids plant in North America, with 

capture and storage of carbon. And we have done studies back with 

MSU Bozeman on carbon capture and storage. And division has 

contract with the U.S. Air Force to supply clean diesel, diesel fuel, 

that would meaningfully reduce carbon emissions throughout the 

world, reduce America’s dependence on foreign oil, and provide a 

safe and secure domestic fuel supply to our national defense. 

And right now, my administration would remain hopeful that we 

can all support clean coal, that technology advancements can create 

a smaller-scale project, and that we will have a new development 

partner to take the risk with the Crow Nation. Needless to say, we, 

as the Crow people, are pursuing an all-of-the-above energy development strategy, which would mean hydropower, wind, coal export, 

and coal-to-liquids. But we would need some help in order to effectuate this energy vision. 

So, we are wanting to pursue not only clean coal technology, but 

also coal exports, wind, and hydropower, and we have the capability of doing all of these to reduce that 47 percent unemployment 

rate, and also to become self-sufficient as a nation. Because the 

majority of our budget, as a tribe, comes from coal development. 

And with the plant that went down in Minnesota that reduced our 

budget as a tribe by 57 and meant a lot of layoffs within the tribal 

government, my approach is to build a coal-to-liquids plant, capture 

and store the carbon, and supply diesel fuel to the U.S. Air Force. 

And this would reduce America’s dependence on foreign oil. 

Mr. DAINES. Chairman Old Coyote, in terms of thinking about 

your growth and economic growth there for your people, how important is the ability to export our coal to global markets? How 

does that factor in to your calculation? 

Mr. OLD COYOTE. Right now, domestically, with the attack on 

coal, this would help with the export of coal, because right now 

many countries are actually buying coal, maybe from Indonesia and 

other countries. But we, as a tribe, and not only a tribe, but the 

41

United States, we could supply a lot of the coal to other countries. 

And opening up a export would mean more revenue, more jobs, 

more opportunities for not only Crows but also Montanans and also 

U.S. citizens. So this would help economies throughout the Northwest and also in Montana and Wyoming. 

Mr. DAINES. Thank you. 

Mr. LAMBORN. Mr. Stewart? 

Mr. STEWART. Yes, thank you. Thank you, Mr. Chairman, and to 

the witnesses, and thank you for your valuable testimony today 

and for spending time with us. 

And I am going to move kind of quickly. I am going to try and 

reserve a few minutes of my time for my friend from Wyoming, 

Mrs. Lummis. But let me make a couple points, if I could. And I 

will ask all of you and, again, if you would reply quickly, would any 

of you disagree that this Administration would like to reduce the 

number of coal-fired power plants? 

[No response.] 

Mr. STEWART. Clearly, that is their objective here. OK. No disagreement from you. And, in fact, the objective and the goal is 40 

gigawatts of power, equaling something like 231 power plants that 

are right now expected to be shut down because of these new regulations on coal-fired power generation between now and 2022. 

Would you disagree that in their perfect world, this Administration would perhaps like to eliminate all coal-fired power plants in 

the United States? 

[No response.] 

Mr. STEWART. OK, all right. I will take that as a yes. And then, 

the final question on that is what is the environmental fear that 

drives that, that desire to reduce or eliminate all coal-fired power 

plants? Ms. Hutzler? Would you like to answer that, your opinion 

on what it is, the environmental concern that is driving that? 

Ms. HUTZLER. Yes. I believe that is the case. They want to reduce 

carbon dioxide emissions, or greenhouse gas emissions. 

Mr. STEWART. Because of climate change concerns. Is that true? 

Ms. HUTZLER. Yes. 

Mr. STEWART. Yes. And, by the way, I thought that your testimony here, your entire written testimony, is one of the finer things 

that I have read as a synopsis of some of these concerns and some 

of these issues. 

The Edison Electric Institute expects, as I said, massive forced 

retirements in coal-fired power plants between now and 2022, 48 

gigawatts of power, 231 power plants. That is a number worth repeating. 

But my point is this. If your objective is to reduce global emissions, and it is global climate change, it is not U.S. climate change, 

it is something that has to be done on a global scale, or we are just 

simply beating our heads against the wall, then if your objective 

is to reduce climate emissions and we are going to drive up the cost 

of electricity for American consumers, for American businesses, for 

young families and working families at a cost of 50,000 direct jobs 

and 250,000 indirect jobs, then let’s say that we are successful at 

doing that, and we eliminate this 48 gigawatts of power, and we 

shut down 231 power plants. But in that same time period India 

and China build 231 coal-fired power plants or more, have we done 

42

any good at all in affecting emissions that affect global climate 

change? 

[No response.] 

Mr. STEWART. OK. Well, I think again, I think we made the 

point. This is something that, we can hurt our own economy. We 

can hurt families that live in America if we choose to. But we may 

not have any impact at all if we don’t attack this in a global economy and on a global scale. 

And I don’t know why this Administration would choose to hurt 

Americans when they are not engaging on the world market with 

China and India and Mexico and Russia and the Ukraine, and now 

France and Germany and many European nations that have 

turned back to coal as well, why we would put ourselves at that 

disadvantage, I don’t understand. 

With that, Mr. Chairman, I would like to yield the remainder of 

my time to, again, my colleague, Mrs. Lummis. 

Mrs. LUMMIS. I thank the gentleman. And I have some questions 

for Commissioner Coolidge, who is the Chairman of the Board of 

County Commissioners in Campbell County, Wyoming, which subsumes the vast majority of the Powder River Basin, as it appears 

in Wyoming. 

Sophia, could you put some reclamation photos up that we have 

here? This is reclaimed coal mine land. This land has been mined 

and reclaimed to the original contours and, in some cases, new 

amenities have been put in, such as the wetlands photo you saw 

in the last picture. 

Commissioner Coolidge, would you comment on your experience 

in Wyoming? Why do you live there? The balance between resource 

development and conservation, the amenities in Campbell County. 

Just paint us a picture. 

Mr. COOLIDGE. Well, actually, I would love to. No, we have got 

a great story to tell, and I always love to tell it. 

It is interesting, the comments about Montana from Mr. Daines. 

I was born and raised in Montana, and came to Wyoming because 

that is where the jobs were, that was where the mineral industry 

was flourishing. And, like Mr. Daines, I am an avid outdoorsman. 

I hunt, I fish. I backpack. I enjoy the outdoors. And what a great 

success story this is. 

I am third generation oil and gas, so I am well aware of the 

value of the mineral industry and the responsibility it has. And 

these pictures tell a great story, here. I think often times we get 

a perception of coal mining that isn’t accurate. Maybe we think 

about the underground mines and those types of things. And these 

pictures do tell the story. 

Our coal mines have been highly successful in the reclamation 

process. As I alluded to in my testimony, the land is actually better 

than they found it. So it is a habitat for wildlife, it is a great tool 

for our agriculture industry, and for the viewshed. 

Mrs. LUMMIS. Thank you, Mr. Chairman. If you go for a second 

round, I will have some additional questions. 

Mr. LAMBORN. OK. Then we will do that. I would like to now 

open our second round of questions. 

43

And, Commissioner Coolidge, how many direct jobs exist in your 

county due to coal mining, and how many indirect jobs, would you 

estimate? 

Mr. COOLIDGE. Direct jobs, at last count, is approximately 5,400. 

And those are jobs, employees, that work directly for the coal 

mines. In addition to that, you have got extensive service industry 

jobs that exist with maintenance of the equipment and electrical 

contractors. The list goes on and on, the services that are directly 

employed by the mines. 

And then, of course, even harder to quantify are the retail and 

hospitality jobs that exist because of the coal-mining industry. It is 

safe to say that not just specific to coal mining, but the mineral extraction business counts for 90-plus percent of the jobs in my community. 

Mr. LAMBORN. And, Commissioner, do you have any idea of the 

comparison between the revenue to a county or a State that a coal 

mine produces versus something like a wind turbine farm, a wind 

farm? 

Mr. COOLIDGE. Because we haven’t had any direct wind farm development in my county, I don’t feel like I could give expert testimony in that regard. But in talking to my colleagues across the 

State of Wyoming, those that have wind projects in their county, 

because of the subsidies and the tax holidays and what not, they 

don’t contribute near the revenues that either oil and gas or coal 

do. 

Mr. LAMBORN. OK, thank you. Chairman Old Coyote, I would 

like to ask you a question. 

Some have suggested that the Crow Nation should abandon its 

pursuit of coal development and, instead, focus on drawing investment in renewable energy, such as wind and solar. What thoughts 

or advice would you have in regards to that suggestion? 

Mr. OLD COYOTE. Well, as far as renewable energy for hydro and 

wind, that doesn’t produce a lot of jobs, and it would probably be 

about 80 percent unemployment if we did that. And we are working with renewable energy as well as fossil fuels right now, coal 

being our number one, bringing in the most money for the tribe. 

And all the revenues that we derive from the coal development, not 

only the jobs out at the mine, but also, 50 percent of our budget 

comes from the mining of coal. So if we just went strictly with renewable, I think our unemployment rate would go up to maybe 80 

to 90 percent. 

Mr. LAMBORN. OK, thank you. Ms. Hutzler, President Obama 

said, when he was campaigning for the presidency, that his policies 

would mean that the price of coal-generated electricity would necessarily skyrocket. If he succeeds in making the price of coal, excuse me, electricity generated from coal skyrocket, what would that 

do to the U.S. economy? 

Ms. HUTZLER. I don’t have the statistic handy to indicate how 

bad that impact would be. But, clearly, it would be extremely bad 

to have those prices skyrocket. 

I mean you can just consider what electricity prices at two or 

three times what we are paying now would mean, in terms of people’s electricity usage, and in terms of what would happen to the 

economy. I mean it would be devastating. 

44

Mr. LAMBORN. OK, thank you. And I would like to recognize Representative Huffman. 

Mr. HUFFMAN. Thank you, Mr. Chair. I want to go back to Acting 

Inspector General Kendall. Your report indicated that BLM does 

not believe that it has statutory authority to levy financial penalties on coal companies as part of its inspection and enforcement 

program. And you pointed out in your report that this may explain 

why there have only been 6 instances of non-compliance reported 

in over 8,100 inspections. And those were conducted during the 2-

year—3-year period from 2009 to 2011. 

What sort of potential violations are we talking about, here that 

would tend to get implicated by these types of inspections? 

Ms. KENDALL. I think we are talking primarily about safety violations. There may also be some production kinds of violation, reporting violations, in terms of what is being produced as opposed 

to what is reported to be produced. Although, when it comes to royalties, I think we mentioned in the report that BLM does have the 

option to work with the Office of Natural Resources revenues, to 

use their enforcement tools when it comes to royalties. 

Mr. HUFFMAN. And I think BLM has only 27 inspection and enforcement personnel for coal operations nationwide, is that correct? 

Ms. KENDALL. That is correct. 

Mr. HUFFMAN. OK. Chairman Old Coyote, I want to ask you a 

question about your carbon capture and sequestration program. I 

think many of us would love to see success in the technological endeavors toward carbon capture and sequestration, but I have been 

under the impression that it has never been done at a commercial 

scale cost-effectively. I think I heard you testify that you are doing 

it now. And so, I am curious to know more about the size of the 

project and the details of the project. 

I also know that the Administration recently put out a solicita- tion for $8 billion, in terms of loan guarantees for precisely this 

type of technological undertaking. And I wondered if you had 

looked into the possible application of that in your case. 

Mr. OLD COYOTE. Well, we did pursue coal-to-liquids. We have an 

agreement in place. But with the recession and gas prices going 

down, because of the economy we kind of put that on the back 

burner. But now, the technology, we have a partner that has done 

some work in Mongolia and various other places where this technology has been proven, carbon capture, diesel, and then also using 

the carbon, capturing the carbon into algae pools and then having 

biodiesel, using this technology. So it is proven technology that one 

of our partners has been working on. 

Mr. HUFFMAN. And I want to applaud you for that kind of creative exploration. But what I wanted to clarify, is that project up 

and running, or——

Mr. OLD COYOTE. No. Right now we are working with our energy 

partners to take some of the risk, because it is pretty pricey. And 

then we are pursuing this technology, and we want to diversify the 

coal development. So this is one area that we are looking at diversifying because domestically, coal is being attacked, it is kind of a 

bad, four-letter word back here in DC, coal. But when they turn on 

their lights and their light bills are going up, then they use the actual four-letter word. 

45

[Laughter.] 

Mr. OLD COYOTE. But the coal, we use coal as a way to bring jobs 

and bring opportunities. And then this will diversify and bring 

more opportunities for not only us, but for America. 

Mr. HUFFMAN. I appreciate that. 

Mr. OLD COYOTE. Because it is going to help. 

Mr. HUFFMAN. There has also been a three-letter word that has 

been keeping those electricity prices low, and that is gas, and 

cheap, natural gas, which maybe is as much of a concern to the 

coal industry as some of these other things we have been talking 

about in the bigger picture. 

But I want to applaud you for looking at geologic carbon capture 

and sequestration. I think all of us would like to see continued efforts in that direction. Perhaps the Administration’s loan guarantee 

announcement of $8 billion may coincide with your interest in that, 

and could be of some benefit to you. 

Thank you again for your testimony. 

Mr. LAMBORN. Representative Lummis. 

Mrs. LUMMIS. Thank you, Mr. Chairman. Just a quick question. 

Ms. Kendall, wouldn’t safety violations be an MSHA matter, rather 

than a BLM matter? You mentioned safety violations. 

Ms. KENDALL. I am not familiar with MSHA. I know that it is 

the mining oversight body. But I think BLM also has safety jurisdiction. 

Mrs. LUMMIS. Quick question. Another quick question. Where is 

the point of valuation for coal under a Federal mineral royalty? Is 

it the mine mouth? Is it the tipple? Is it FOB mine? Is it the inlet 

of the plant, the electric power plant? 

Ms. KENDALL. I have no idea. 

Mrs. LUMMIS. Well, wouldn’t that matter, if allegations are being 

made that we should be getting more royalty for coal that goes 

overseas, if it is valued for royalty purposes at the mouth of the 

mine, then regardless of where it is sold, the value is the same. 

Anyway, we will talk about that another time. And we should, 

because I am really mystified by some of the arguments that are 

being raised. 

I want to switch to Mr. Coolidge. Could you talk for a moment 

more about some quality-of-life issues in your community? When 

you have got a single mother who can drive down to a coal mine 

and run a coal truck that is as big as a building, and make a fabulous livable-wage job while her kids are in some of the finest public 

schools in America, what does that do for Campbell County? What 

does that do for the average American single mom? What will that 

do for the average member of the Crow tribe, if they get their mine 

going? 

Mr. COOLIDGE. Thank you, and that is a very good question. You 

know, that is the beautiful thing about Gillette, Wyoming. When 

I moved there I wasn’t too excited about the prospect of living 

there, because, quite frankly, it had the reputation of any boom 

town. And thought I would spend a couple years there and move 

on. And, quite frankly, everybody that lives there has that same 

story. And it is a wonderful community because of the revenues we 

have there. We have got a great school system. We have got the 

ability for all residents in the county to not only have a good-payVerDate 0ct 09 2002 13:35 Sep 05, 2014 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6602 X:\01ENER~1\01JY09~1\7-9-13~1\81894_~1 MARK
46

ing job, but also experience the benefits of what local government 

can provide because of the tax revenues. We just recently completed a $52 million rec center, in coopera- tion with the school district. We have just recently completed a $44 

million multi-events facility. And the list goes on and on. We have 

been able to replace all of our infrastructure and provide all these 

quality of life things for our residents. 

And I often tell the story that we do pride ourselves in Campbell 

County and in the whole State of Wyoming as being ultra-conservative and staunch Republicans. But I often joke, and it is tongue 

in cheek, but, quite frankly, in Campbell County, Wyoming, we are 

almost Socialistic with the things that we do for our citizens, and 

the expectations that are there with our human service agencies, 

whether it be the senior citizen center or our homeless shelter. And 

the list goes on and on. So, it just makes for a great place to live. 

Mrs. LUMMIS. Could you talk for a little bit about carbon capture 

activities in Wyoming? 

Mr. COOLIDGE. I would love to. And, actually, I was disappointed 

that question was directed to my colleague, because I had things 

to say about that. And, granted, Mr. Huffman, we in Wyoming 

don’t have a commercial capture and sequestration going on, either, 

but we have taken the necessary steps. We pride ourselves in Wyoming as being proactive. And if we feel like there are problems that 

exist, or regulations coming down the pike, we take the bull by the 

horns, so to speak, and deal with it. And we have been very 

proactive in our State legislature with our carbon capture legislation, and the whole sequestration issue, and mineral ownership 

and storage and those types of things. 

But truth be known, it goes beyond just sequestration. We actually have a huge benefit from carbon dioxide in Wyoming, and otherwise referred to as CO2. We utilize CO2 for tertiary recovery 

projects. We pump that CO2 into the hydrocarbon, the oil-bearing 

formation, and realize great returns from that tertiary recovery. As 

a matter of fact, near the naval petroleum reserve, the old Teapot 

Dome we all know so much about, the Salt Creek Oil Field, which 

is still the largest sweet oil field in the continental United States, 

and that production has almost tripled in the last 10 years because 

of the CO2. So our answer to CO2 is send us more, we can use all 

of it, and we can do good things with it. 

Mrs. LUMMIS. Quick question for Ms. Hutzler about an announcement just made regarding Pennsylvania power plants closing because of the EPA regulations. 

Ms. HUTZLER. Yes. First Energy Corporation is closing two of 

their coal-fired power plants, and that is 10 percent of their capacity. And it is going to affect 380 employees, and that is due to EPA 

regulations. 

Mrs. LUMMIS. Thank you. And, Mr. Chairman, I yield back. 

Mr. LAMBORN. Thank you. Representative Daines? 

Mr. DAINES. I want to go back to a point that the gentlelady from 

Wyoming brought up a little earlier. And this is probably for Ms. 

Kendall. Looking at these blind bids for fair market value, and as 

someone who, as I think every Member here on both sides would 

agree, want to make sure we are looking out for the taxpayers of 

this country, those of us who are Americans looking out for Federal 

47

lands, to make sure we get a good return on lands that we own collectively here as a Nation, looking at the data here, over the course 

of the last about 23 years, since 1990, there have been 21 accepted 

bids that were over the minimum price. 

And again, back to the gentlelady from Wyoming’s point, it is a 

blind bidding process. And so I assume that it would be very rare, 

in fact, it would be extraordinary, if one of the companies bidding 

would actually hit precisely the number, in terms of what is it, 

based on dollars per ton? 

So, I understand 21 were accepted over the minimum price. 

There were 12 that were rejected, I assume because they were 

below the minimum price. But nine of those were rebid and then 

later accepted. So that would be 21 plus 9. Let’s see, there would 

be 30 bids. Did you ever see a situation where they hit the number 

precisely? Because I assume if it is below it, you will reject it. 

Ms. KENDALL. For the sample that we saw, we found four that 

they accepted below. And I am simply not familiar with the numbers that you are citing, and would be happy to get back with you 

and Congresswoman Lummis on those numbers, if we have them. 

Mr. DAINES. OK. And, Mr. Chairman, I would like to submit this 

for the record. We have got the data here on the history of the bids, 

and the price. 

And these are, as the gentlelady from Wyoming mentioned, these 

are very, very large numbers. I mean, for example, in a recent bid 

2012, when I convert the dollars per ton times the tonnage and so 

forth to absolute dollars, the rejected bid was $361 million, and 

then accepted later for $446 million. That is an $85 million increase, I am assuming, because one was below the blind fair market value target, the other one was above it, which would suggest 

that, more likely than not, and I am a chemical engineer by degree, 

but I am not necessarily a gambler, but I would assume odds are 

bids that are accepted are going to be above the fair market value. 

Would that be an accurate statement? 

Ms. KENDALL. I would not disagree with that. 

Mr. DAINES. OK, which suggests that the issue is probably not 

that the American taxpayer is not getting at least fair market 

value. Odds are, we are getting something well above the fair market value, based on the fact that you wouldn’t accept a bid unless 

it were above the fair market value. 

Ms. KENDALL. Well, in fact, when I first saw the results of this 

evaluation, I was questioning why it would be a blind bid, quite 

frankly, because I would think that the companies, if they know 

what the valuation that BLM put on as fair market value, would 

then try to outbid one another above that. 

But this is the process, I understand, that has been in place for 

BLM as long as they have been in charge of the coal program. 

Mr. DAINES. OK. Well, again, I will submit this into the record. 

Mr. LAMBORN. If there is no objection, so ordered. 

[The information submitted for the record by Mr. Daines follows:]

48

Federal Coal Lease Sale Information From 1990–2013 for the Powder River Basin 

[For Congresswoman Lummis, July 8, 2013] 

State Lease Serial Number Sale No. for Lease Sale Date Number of Qualified Bids Received Acres Millions of Tons Bonus Bid Accepted Value ($/Acre) Value ($/Ton) Successful Bidder Associated Mine Name Date Tract was Reoffered, Sold, or Case Closed Plans for Reoffering the Tract, No Bid Re- ceived, or Explanation for Not Reoffering 

WY WYW117924 1 26-Sep-91 1 1,708.62 102.60 $20,110,457 $11,770 $0.196 Kerr McGee Jacobs Ranch N/A N/A WY WYW118907 1 12-Aug-92 1 3,492.50 481.00 $71,898,842 $20,587 $0.149 Thunder Basin Black Thunder N/A N/A WY WYW119554 1 28-Sep-92 1 3,064.00 370.00 $86,986,960 $28,390 $0.235 Powder River NARO N/A N/A WY 1WYW122586 1 3-Dec-92 N/A 463.21 55.00 $14,220,185 $30,700 $0.259 N/A N/A January 7, 1993; 

Sold 

Bid did not meet 

FMV; reoffer 

requested 

WY 2WYW122586 2 7-Jan-93 1 463.21 55.00 $16,500,001 $35,621 $0.300 Northwestern 

Resources 

Rocky Butte N/A N/A 

WY WYW124783 1 5-Apr-95 1 1,059.18 166.40 $18,470,400 $17,438 $0.111 AMAX Land Co. Eagle Butte N/A N/A 

MT 1MTM80697 1 9-Aug-95 N/A 2,061.00 35.60 $206,100 $100 $0.006 N/A N/A June 2, 1997; May 

7, 1998; and Sold 

June 16, 1999 

Bid did not meet 

FMV; reoffer 

requested 

WY 1WYW128322 1 18-Sep-96 N/A 617.20 60.36 $6,645,045 $10,766 $0.110 N/A N/A December 4, 1996; 

Sold 

Bid did not meet 

FMV; reoffer 

requested 

WY 2WYW128322 2 4-Dec-96 1 617.20 60.36 $9,054,600 $14,670 $0.150 Antelope Coal 

Co. 

Antelope N/A N/A 

MT 3MTM83859 1 10-Jan-97 N/A 320.00 3.52 $1,760,000 $5,500 $0.500 N/A N/A November 13, 

1997; Closed 

Bid failed to meet 

FMV, tract reoffered on November 

13, 1997

MT 1MTM80697 2 2-Jul-97 N/A 2,061.00 35.60 $360,675 $175 $0.010 N/A N/A May 7, 1998; and 

Sold June 16, 1999 

Bid failed to meet 

FMV; tract 

reoffered 

WY 1WYW127221 1 29-Jul-97 N/A 1,481.93 157.61 $26,860,000 $18,125 $0.170 N/A N/A September 25, 

1997; Sold 

Bid did not meet 

FMV; reoffer 

requested 

WY 2WYW127221 2 25-Sep-97 1 1,481.93 157.61 $30,576,340 $20,633 $0.194 Triton North Rochelle N/A N/A 

49

MT 3MTM83859 2 13-Nov-97 N/A 320.00 3.52 $2,464,000 $7,700 $0.700 N/A N/A Bid Rejected; 

Closed 

Bid failed to meet 

FMV, applicant not 

interested in a 

reoffer, case was 

closed 

MT 1MTM80697 3 7-May-98 N/A 2,061.00 35.60 $2,848,000 $1,382 $0.080 N/A N/A Sold June 16, 1999 Bid did not meet 

FMV; reoffer 

requested 

WY WYW136142 1 30-Jun-98 1 4,224.23 532.00 $109,596,500 $25,945 $0.206 Powder River 

Coal Co. 

NARO N/A N/A 

MT 2MTM080697 4 16-Jun-99 1 1,401.00 27.60 $4,416,000 $3,152 $0.160 Western Energy 

Co. 

Rosebud N/A N/A 

WY WYW136458 1 1-Oct-98 2 3,545.50 412.00 $158,000,009 $44,563 $0.383 Arch Coal Black Thunder N/A N/A WY WYW141435 1 7-Sep-00 1 2,818.70 275.58 $91,220,121 $32,363 $0.331 Kennecott Energy Antelope N/A N/A 

MT MTM88405 1 27-Nov-00 1 150.00 15.40 $1,740,200 $11,601 $0.113 Spring Creek 

Coal Co. 

Spring Creek N/A N/A 

WY 3WYW151133 1 11-Oct-01 N/A 243.61 31.40 $6,443,280 $26,449 $0.205 N/A N/A October 12, 2001, 

bid rejected; November 27, 2002, 

case closed. 

Bid failed to meet 

FMV 

WY WYW146744 1 16-Jan-02 2 4,982.24 537.54 $379,504,652 $76,171 $0.706 Kennecott Energy Jacobs Ranch N/A N/A WY WYW154001 1 29-Jun-04 1 2,956.73 297.47 $274,117,684 $92,710 $0.922 Peabody-BTU 

Western Resources, Inc. 

NARO N/A N/A 

WY 1WYW150210 1 31-Aug-04 N/A 2,369.38 324.63 $237,464,650 $100,222 $0.731 N/A N/A December 29, 

2004; Sold 

Bid did not meet 

FMV; reoffer 

requested 

WY WYW150318 1 22-Sep-04 1 5,083.50 718.72 $610,999,950 $120,193 $0.850 Ark Land LT 

Incorporated 

Black Thunder N/A N/A 

WY 1WYW151134 1 27-Oct-04 N/A 2,812.51 327.19 $220,035,392 $78,235 $0.673 N/A N/A February 16, 2005; 

Sold 

Bid did not meet 

FMV; reoffer 

requested 

WY WYW151634 1 17-Nov-04 1 921.16 142.70 $42,809,400 $46,473 $0.300 Kiewit Mining 

Group 

Buckskin N/A N/A 

WY WYW151643 1 15-Dec-04 1 2,809.13 194.96 $146,311,000 $52,084 $0.750 Antelope Coal 

Co. 

Antelope N/A N/A 

WY 2WYW150210 2 29-Dec-04 1 2,369.38 324.63 $299,143,785 $126,254 $0.922 BTU Western 

Resources, Inc. 

NARO N/A N/A 

50

Federal Coal Lease Sale Information From 1990–2013 for the Powder River Basin—Continued

[For Congresswoman Lummis, July 8, 2013] 

State Lease Serial Number Sale No. for Lease Sale Date Number of Qualified Bids Received Acres Millions of Tons Bonus Bid Accepted Value ($/Acre) Value ($/Ton) Successful Bidder Associated Mine Name Date Tract was Reoffered, Sold, or Case Closed Plans for Reoffering the Tract, No Bid Re- ceived, or Explanation for Not Reoffering 

WY 2WYW151134 2 16-Feb-05 2 2,812.51 327.19 $317,697,610 $112,959 $0.971 BTU Western 

Resources, Inc. 

School Creek N/A N/A 

MT MTM094378 1 17-Apr-07 1 1,117.70 108.60 $19,902,200 $17,806 $0.183 Spring Creek 

Coal Co. 

Spring Creek N/A N/A 

WY 1WYW154432 1 18-Oct-07 N/A 445.89 54.70 $21,001,419 $47,100 $0.384 N/A N/A March 19, 2008; 

January 28, 2009; 

Sold 

Bid did not meet 

FMV; reoffer 

requested 

WY 1WYW174407 1 29-Nov-07 N/A 2,900.24 288.10 $121,987,050 $42,061 $0.423 N/A N/A Apirl 22, 2008; 

Sold 

Bid did not meet 

FMV; reoffer 

requested 

WY WYW155132 1 20-Feb-08 1 1,428.00 255.00 $180,540,000 $126,429 $0.708 Foundation 

Coal West Inc. 

Eagle Butte N/A N/A 

WY 1WYW154432 2 19-Mar-08 N/A 445.89 54.70 $43,797,200 $98,224 $0.801 N/A N/A January 28, 2009; 

Sold 

Bid did not meet 

FMV; reoffer 

requested 

WY 2WYW174407 2 22-Apr-08 1 2,900.24 288.10 $250,800,000 $86,476 $0.871 Cordero Mining 

Co. 

Cordero Rojo N/A N/A 

WY 2WYW154432 3 28-Jan-09 1 445.89 54.66 $48,098,424 $107,871 $0.880 Cordero Mining 

Co. 

Cordero Rojo N/A N/A 

WY WYW163340 1 11-May-11 1 2,837.63 350.263 $297,723,228 $104,920 $0.850 Antelpole Coal 

LLC 

Antelope N/A N/A 

WY WYW177903 1 15-Jun-11 1 1,908.60 56.36 $49,311,500 $25,836 $0.875 Antelpole Coal 

LLC 

Antelope N/A N/A 

WY WYW161248 1 13-Jul-11 2 1,671.03 221.73 $210,648,060 $126,059 $0.950 BTU Western 

Resources 

Caballo N/A N/A 

WY WYW172657 1 17-Aug-11 2 1,023.99 130.20 $143,417,404 $140,057 $1.102 Alpha Coal 

West 

Belle Ayr N/A N/A 

WY WYW174596 1 14-Dec-11 1 1,976.69 222.68 $300,001,012 $151,769 $1.347 ARK LAND

CO-South 

Black Thunder N/A N/A 

WY 1WYW176095 1 29-Feb-12 N/A 3,243.03 401.83 $361,647,000 $111,515 $0.900 N/A N/A May 17, 2012; 

Sold 

Bid failed to meet 

FMV; tract 

reoffered 

51

WY 2WYW176095 2 17-May-12 1 3,243.03 401.83 $446,031,864 $137,536 $1.110 BTU Western 

Resources 

NARO N/A N/A 

WY WYW173408 1 28-Jun-12 1 6,364.28 721.15 $793,270,319 $124,644 $1.100 BTU Western 

Resources 

NARO N/A N/A 

1 Sales where bids were rejected as insufficient and the tracts were successfully leased later. 2 Tracts that were successfully leased after previous bid rejections. 3 Sales where bids were rejected as insufficient and the tracts were not later leased. 

52

Mr. DAINES. All right, thank you. And just to state the fact that 

this issue, I think, came up earlier. But just looking at the data 

here, assuming that the fair market value is the fair market value 

that the American taxpayer is being looked out for, given that the 

bids that are being accepted are above fair market value. Thank 

you. 

Mr. LAMBORN. Well, that concludes our questioning. Members of 

the Committee may have additional questions for the record. I 

would ask that you respond to those in writing. 

On a final note, there has been a lot of discussion today about 

the potential loss of revenues, regardless of the fact that the IG report questioned only 3⁄10 of 1 percent of the revenue generated from 

coal. This is a rate that we would hope every Federal program 

could emulate. 

However, if my colleagues on the other side of the aisle are truly 

concerned about generating more revenue to the Federal treasury 

from coal mining, I would urge them to join with me in support of 

opening more coal mines on Federal and tribal lands. If we really 

want more revenue from resource development, I stand ready to 

help develop more of this resource. It not only allows for more revenue to the Federal treasury, but also to local, State, and tribal 

governments. It provides employment opportunities for many working families and rural communities, and they are high-paying, family wage jobs with benefits. 

But to get this revenue, we must stop the Administration’s reckless war on jobs and coal, promote more mining, encourage more 

exports, and stop regulations from this Administration that will kill 

jobs and revenue, nationwide. 

If there is no further business, without objection, the Committee 

stands adjourned. 

[Whereupon, at 3:33 p.m., the Subcommittee was adjourned.]

Æ