CASPER, Wyo. - A report released today delves into the federal royalty system for coal mining on public land - and finds that the Office of Natural Resources Revenue is right in considering changes.

The Headwaters Economics calculations found that loopholes in the current system have meant about $850 million in royalty income was not collected from 2008 to 2012. Report author Mark Haggerty said the coal market also has changed.

"We might want to weigh higher royalty collections more heavily against wanting to provide cheap coal for market to Asia," he said.

Haggerty said federal coal leasing has several objectives, including a fair return for taxpayers, jobs and inexpensive domestic energy. A decision on changes in the royalty system is expected this spring.

Haggerty's report makes a recommendation for changing the royalty calculations as well as closing the biggest loophole, which allows brokers, sometimes affiliated with the mine owners, to sell the coal for a higher price without paying royalties.

"So, we think there's actually a more simple and elegant way to do it - move the point of royalty valuation from the mine to the market," he said.

The changes also may include reducing the deduction for transportation costs - currently at 100 percent. By comparison, oil and gas transportation deductions are at 50 percent. The federal royalties are split with states, so changes would mean more money for Wyoming, although the state also would see less money in severance and other taxes - but the report predicts the end result would be in the positive column for states.

The economic report is online at headwaterseconomics.org.


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Conservation groups are rejoicing over the decision Friday by the Biden administration to reject a proposed mining road in Alaska.

The 211-mile Ambler Road would have sliced through the Gates of the Arctic National Park and Preserve, severing the migration route for a Western Arctic Caribou herd.

Alex Johnson, interior Alaska director for the National Parks Conservation Association, said it was important for the feds to take a stand in Alaska so mining interests do not start eyeing other national parks.

"This is a very expensive, destructive and just highly speculative project that does not in any way support our clean energy goals as a country," Johnson contended. "And ultimately would permanently threaten the health and well-being of local communities and the tribes."

Alaska Sen. Lisa Murkowski slammed the decision, warning it could limit jobs and tax revenues for Alaska by preventing exploration for minerals she said are important to national security, like copper, cobalt, gallium and germanium.

Jayme Dittmar, a photographer and filmmaker from Fairbanks, said the road would have been very disruptive to the 66 Native American villages along the proposed route.

"That'd be 168 trucks passing through close vicinity to the villages," Dittmar pointed out. "There would be hundreds of bridges built. It would dismantle a subsistence livelihood that's been in place for thousands and thousands of years."

The road was seen as a negative for tourism to the Brooks Range area. According to the Alaska Travel Industry Association, Californians make up 9% of visitors to Alaska.

Arizona conservation groups and sportsmen alike say they're pleased the Bureau of Land Management will now recognize conservation as an integral part of public lands management.

The agency's new rule puts protecting the environment on par with other land-use priorities.

Scott Garlid, executive director of the Arizona Wildlife Federation, said historically the BLM has done what he termed a "pretty good job," not only managing about 12 million acres of public lands in Arizona, but also protecting natural resources.

"They've got a tough job," Garlid acknowledged. "I think this rule helps make their job a little bit easier because it gives them some tools to balance those different demands on the 12 million acres that they manage."

Garlid predicted the rule will raise what he terms "harder-to-quantify conservation values" to the same level of importance as more extractive land uses like oil and gas exploration and mining. He thinks most Arizonans will recognize the new rule as a positive. A solid majority of Arizona voters across party lines say they are conservationists and use public lands for recreation.

To Garlid, the rule makes it clear the BLM is recognizing certain parts of federal lands, in Arizona and around the West, have been degraded. He contended restoration leases will be a good tool, allowing the BLM to lease acres to groups specifically to improve the conditions on a given landscape. He noted opponents of the new rule might see the leases as a way to "lock up" land but he argued it is not true.

"One example could be a nonprofit, like the Arizona Wildlife Federation," Garlid pointed out. "We could get a conservation lease from the Bureau of Land Management to do riparian restoration work, or work to remove invasive species along a creek bank."

According to the BLM, while a restoration or mitigation lease is in place, casual uses of the leased lands like recreation, hunting, fishing and research activities would generally continue.

Support for this reporting was provided by The Pew Charitable Trusts.

State and federal agencies are collaborating to increase the use of prescribed fires in the Northwest.

Prescribed fire is the controlled use of burns to minimize the larger risks of wildfires and smoke. It is seen as an increasingly important strategy as wildfire seasons pose greater threats to the Northwest.

Casey Sixkiller, Northwest regional administrator for the U.S. Environmental Protection Agency, said authorities want to work together to maintain forest habitats.

"Prescribed burn is one of the best tools we have for making our forests more resilient against catastrophic wildfires and they help to manage and target hazardous fuels and make for healthier forests," Sixkiller explained.

Sixkiller pointed out the EPA is involved because wildfire smoke poses risks to people's health. The collaboration is between federal agencies, departments in Oregon and Washington, and tribal governments.

Sixkiller noted the collaboration needed a formal agreement to move forward.

"That is what we've been able to do here with this agreement," Sixkiller emphasized. "To get federal land managers and states and us all in the same room, making sure that we're all on the same page about what success looks like."

Sixkiller added the collaboration has another advantage: It helps drive engagement with communities potentially in the path of prescribed burns.

"They have the confidence that the effort that's gone into planning that activity has been thought out from soup to nuts," Sixkiller acknowledged. "And that they have a seat at the table and are being engaged and their concerns are being addressed as we go forward with that activity."


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