coal subsidies

Self-Bonding in an Era of Coal Bankruptcy: Recommendations for Reform

Federal law requires coal companies to reclaim and restore land and water resources that have been degraded by mining. But at many sites, reclamation occurs slowly, if it all. Mining companies are required to post performance bonds to ensure the successful completion of reclamation efforts should they become insolvent, but regulators have discretion to accept “self-bonds,” which allow many companies to operate without posting any surety or collateral.

Illuminating the Hidden Costs of Coal: How the Interior Department Can Use Economic Tools to Modernize the Federal Coal Program

This report aims to illuminate some of the hidden costs of coal production, which Interior should account for in order to modernize the federal coal program and earn a more fair return. If Interior had used a higher royalty rate that accounts for even a fraction of the public costs of mining, it could have earned an additional $2 billion from 2009 to 2013, from coal production in four western states-Wyoming, Colorado, Montana, and Utah.

To modernize the coal program and earn a more fair return, Interior should:

A Framework for Assessing Thermal Coal Production Subsidies

There has been much discussion of fossil fuel subsidies as both an inefficient use of public tax dollars and a barrier to the scaling up of low- and no-carbon energy sources. As "green" incentives are reduced, the phase-out of fossil fuel subsidies becomes even more urgent in order to reduce market distortions and ensure a level playing field in energy markets. Developing-world subsidies to fossil fuel consumption have attracted the most attention to date. However, fossil fuels also benefit from production subsidies in both developed and developing countries.

Mining's little messes and the trouble with self-bonding

For many decades, natural resource industries would work their land, sell their minerals, and abandon their sites for somebody else to deal with.  There are tens of thousands of such sites around the US, associated with both energy and non-energy minerals; here's a sampling, compiled by the enormously important NGO, Earthworks.  But the costs of these sites can run into the billions, and neither public taxpayers, nor government entities "hosting" the mess, were particularly happy to i

Estimating U.S. Government Spending on Coal: 2002 - 2010

This analysis identifies a number of federal programs supporting coal, including some that while not directly targeted at coal provide significant benefit to the coal sector.  In total these subsidies provided approximately $25.4 billion in financial support for coal production, transport, use, or waste disposal during the period 2002-2010. The majority of these dollars - $16.2 billion - are attributable to tax benefits. Of these tax benefits, the single largest category was the non-conventional fuels tax credit, providing $12.22 billion to coal.

Coal in Australia: A broader view of costs and benefits

Harvard economics Professor David Glaeser has an interesting editorial on the role of mining in Australia, published yesterday by Bloomberg.  The basic thrust of his argument is that capital-intensive coal and iron ore industries dominate Australian exports, but harm long-term competitiveness.  He mentions two main causes.  The first is the role of natural-resource-led exports bidding up the value of Australian dollars (sometimes referred to as the "Dutch Disease"), making it more difficult for other sectors to be competitive.  This dynamic is important, but is not particularly novel:  it h

State funding of DKRW coal-to-liquids plant: financially risky, contrary to purpose of Mineral Trust Fund

Houston-based DKRW Advanced Fuels has a dream:  they want to turn a chunk of Wyoming's vast coal reserves into 10,600 barrels of gasoline per day.  They want to capture most of the carbon emitted in the process and sell it to the state's oil and gas industry, which will use the CO2 to inject into wells, increasing oil and gas production.  In one fell swoop, the firm hopes to boost production of all of the state's major fossil fuels.  The facility would be located near Medicine Bow, a town that presently has about 300 people.

Dreaming with somebody else's money

Full cost accounting for the life cycle of coal

Each stage in the life cycle of coal—extraction, transport, processing, and combustion—generates a waste stream and carries multiple hazards for health and the environment. These costs are external to the coal industry and are thus often considered “externalities.”We estimate that the life cycle effects of coal and the waste stream generated are costing the U.S. public a third to over one-half of a trillion dollars annually.Many of these so-called externalities are, moreover, cumulative.

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