Coal companies have invested a lot of time building a network of subsidiaries which they have effectively and legally used to work around the federal royalty system. Here’s how it works: The coal companies sell coal to an affiliated company at artificially low prices -- paying the public a deflated royalty -- then turn around to sell the coal at a higher profit, and pocket the difference -- without paying any more royalties on the markup.
This royalty loophole is a big deal because the vast majority of coal mined in Wyoming is done on public lands, and the federal royalties that are paid help fund schools, highway improvements, and local infrastructure. As a Sheridan County District #2 Board member, I know firsthand how important federal mineral royalty funds are to our kids and families here in the Cowboy State. Our communities deserve a fair return when our minerals are developed.
Fortunately, the Department of Interior is considering updated regulations to close the loophole and ensure royalties are paid on the true value of coal. The comment period for these rules just closed on May 8th, and over 200,000 citizens from across the nation – including many from here in Wyoming- weighed in and supported the rules. I hope the Department finalizes its proposal soon, which will bring much-needed income to our state’s coffers.