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ACA criticises White House coal report

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World Coal,

The American Coal Council has become the latest organisation to criticise a report on the economics of federal coal leasing from the White House’s Council of Economic Advisors (CEA), accusing it of failing to understand the workings of the coal market.

“As an example of the problematic nature of the report, one of the CEA’s conclusions is that increasing the cost to produce coal under federal leases, which mainly occurs in the Powder River Basin, through higher royalty payments will raise the market price of coal nationally,” the ACA said.

“This conclusion is incorrect, and it demonstrates a failure to appropriately analyze the competitive market forces at play in the various coal-producing regions of the US, as well as the greater energy marketplace.”

The ACA continued that is would be a “grave mistake for American taxpayers to believe that increasing royalty rates under this programme will be beneficial for them.”

“It would reduce coal investment and decrease the amount of coal mined on federal lands,” the ACA concluded. “That means fewer federal and state revenue dollars and a lower, not higher, return for taxpayers. And while not improving the lives of everyday Americans, such a policy change would be devastating to an industry already burdened by weak markets and oppressive governmental regulation.”

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