Amid pandemic, US coal industry seeks lower taxes, royalties

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Amid pandemic, US coal industry seeks lower taxes, royalties

In this Nov. 15, 2016, file photo, a haul truck with a 250-ton capacity carries coal from the Spring Creek strip mine near Decker, Mont. The lobbying arm of the U.S. coal industry is asking for hundreds of millions of dollars in royalty relief, tax cuts and other breaks to help companies ride out financial crisis brought on by the corona virus pandemic. 

The lobbying arm of the U.S. coal industry is asking for hundreds of millions of dollars in royalty relief, tax cuts and other breaks to help companies ride out the financial crisis brought on by the coronavirus pandemic.

National Mining Association President Rich Nolan made the request in a letter sent this week to the White House and the leaders of the House and Senate.

The benefits that Nolan asked Congress to provide could total more than $800 million a year for coal companies, based on last year’s payments by the industry to the federal government.

The request includes a $220 million cut to a tax aimed at covering beneficiary payments for black lung disease in miners, a 50% cut in mine reclamation fees that would be worth $75 million, and suspending or eliminating royalty payments that totaled $527 million last year, according to the association.

Even before the current economic upheaval, the coal mining industry was in sharp decline as utilities across the nation switch to cleaner-burning natural gas and renewable energy sources.

With financial institutions under pressure from environmentalists to divest from coal, Nolan also said more access to credit was needed to help companies keep mines open. He described it as a matter of national security and said that without easier access to credit, operations at hundreds of mines employing tens of thousands of miners could be threatened.

“The coal industry is absolutely critical to securing a domestic, secure supply of affordable energy,” he said. “As global supply chains are disrupted…American-mined coal is here when it is needed.”

The request was blasted by conservationists who said it amounted to a corporate giveaway and would sharply reduce revenue for coal mining states that get a share of all royalty payments.

“CEOs are seeking to manipulate a global public health crisis for private gain. We should use funds to help workers and communities, not give sweetheart deals to massive coal companies,” said Ellen Pfister, a Montana rancher and member of the Northern Plains Resource Council who lives next to a large coal mine north of Billings.

The volume of coal mined in the U.S. has been dropping for the past decade, although burning the fuel still accounts for almost one-quarter of all U.S. electricity generation.

Coal production in 2020 totals just over 124 million tons to date, down by almost 18 percent compared to the same point in 2019, according to the Energy Information Administration.

The decline has hit all major coal states, including Wyoming, West Virginia, Kentucky, Virginia, Montana and Illinois. About half of coal royalty revenues collected by the federal government is returned to the states where the fuel was mined.

White House spokesman Judd Deere declined to comment on the specific breaks requested by the coal industry but said the Trump administration was going to look out for private companies.

“We are going to ensure that we take care of all Americans, including affected industries and small businesses, and that we emerge from this challenge stronger and with a prosperous and growing economy,” Deere said in an emailed statement.

Representatives of House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell did not immediately respond to requests for comment.


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