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GAO: BLM Coal Leasing Problems Identified

PHOTO: The Government Accountability Office (GAO) has issued a report on the federal coal management program at the Bureau of Land Management. It notes problems relating to competition, and oversight to determine fair market value. Photo courtesy of mt.gov
PHOTO: The Government Accountability Office (GAO) has issued a report on the federal coal management program at the Bureau of Land Management. It notes problems relating to competition, and oversight to determine fair market value. Photo courtesy of mt.gov
February 5, 2014

BILLINGS, Mont. - A Government Accountability Office report on the federal Bureau of Land Management’s coal-management program has outlined a number of problems related to competition, and oversight in determining fair market value of federal coal leases.

In 90 percent of leases reviewed, there was only one bidder, the report found - and almost every time, that bid was accepted even though federal law requires competitive bidding.

Steve Charter, chairman of the Northern Plains Resource Council, said the bottom line is that Montana isn't seeing the money it should from coal leases.

"We've been following it for a long time and nobody's paid much attention,” he said, “and here just in the last year, it has finally been scrutinized."

Another criticism was aimed at not valuing coal accurately under the new model of demand - which is coal for export. Sen. Edward Markey, D-Mass., is calling for a halt to new sales until changes are made. He estimated that recent sales across the nation have been undervalued by around $200 million.

The timing is right to stop new leases and revamp policies, Charter said, noting that would not stop existing leases or production.

"There's kind of questionable demand for coal right now,” he said. “Generally, it would be a good time to pause, step back and examine the whole program."

In addition, the GAO report found that the Interior Department is not providing full information to the public about leases.

The report is online at gao.gov.

Deborah Courson Smith/Deb Courson Smith, Public News Service - MT