Add this report, on “Federal Coal Leasing in the Powder River Basin,” to the long list of taxpayer-funded corporate welfare going to fossil fuel companies. As David Roberts of Grist wrote in 2011, “fossil fuels have gotten the bulk of government help — 70 percent to renewables’ 10 percent, for a total of $594 billion in fossil-fuel subsidies over the last 60 years.” But that only counts direct subsidies, not “externalities” or other indirect subsidies that are difficult, if not impossible, to measure. For instance, as this new report explains, coal leasing in Wyoming’s Powder River Basin is a really “bad deal for taxpayers.” Here’s an excerpt:
While it is evident that Powder River Basin coal is a major contributor to U.S. climate change and carbon pollution, what is less apparent are the real economic and social costs of burning this coal—and the true cost borne by U.S. taxpayers, which has long been overlooked by policymakers.
All in all, depressed market valuations, an anti-competitive leasing program, low royalty rates that have not changed in decades, and unaccounted for social and environmental costs all mean that U.S. taxpayers are paying heavily to sell, mine, and burn Powder River Basin coal. When the social cost of carbon for burning this coal at $62 per short ton is taken into account, the federal government is not only foregoing billions of dollars in lost revenue but is also selling publicly owned coal at a net social loss of at least $49 per short ton…
Even using BLM’s lower estimate of 388 million tons of federal coal sold from the Powder River Basin in 2012, the total net social loss that year was more than $19 billion dollars. These losses will continue to reach into the hundreds of billions of dollars if Powder River Basin coal remains so highly undervalued and production continues at similar levels to today.
The bottom line is that the government is selling federal coal at a huge loss, subsidizing an industry to produce carbon pollution, and seemingly has no meaningful plan to change course. In its current form, the federal coal-leasing program in the Powder River Basin is—from top to bottom—a bad deal for U.S. taxpayers.
By the way, the next time anyone from the fossil fuel industry, or one of their paid flacks, tries to tell you that renewable energy can only survive if it is heavily subsidized, you might want to point them to this new study on taxpayer-funded corporate welfare to Power River Basin coal, and to numerous other studies telling the same basic story for other fossil fuel industries – coal mined in the rest of the country, “fracked” natural gas, oil, etc. Our guess is that they won’t have a response to this information, at least a response that makes the least bit of sense.