HOW COAL IS SUBSIDIZED

Top Three Ways That American Taxpayers Subsidize Dirty Coal Development Jessica Goad and Stephen Lacey, April 13, 2012 (Climate Progress)

"Environmentalists and public health advocates often talk about… externalities…[whose] total economically quantifiable costs…[are estimated at] some $345.3 billion, adding close to 17.8¢/kWh of electricity generated from coal….borne by the general public…[M]ore tangible ways the coal industry is being subsidized by the American taxpayer…[include] tax breaks, public land loopholes, and subsidized railroads that help them continue being ‘cheap.’

"…1. Tax breaks…[include] three tax preferences for coal would save $2.6 billion between 2013-2022…Expensing of exploration and development costs…incurred by locating coal ore deposits…Percentage Depletion for Hard Mineral Fossil Fuels…[that] cover the costs of investments in mines…[and] Capital Gains Treatment for Royalties…so they are taxed at a lower rate."

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"…2. Public land loopholes…43.2 percent of U.S. coal comes from public lands. However, the coal industry benefits from a number of loopholes that make obtaining leases on public lands easier and cheaper…[T]he nation’s largest coal producing region, the Powder River Basin in Wyoming, is not legally classified as a ‘coal-producing region’…which shortchanges taxpayers for the value of the land and the coal underneath it…[Also,] the non-public process by which the Bureau of Land Management determines fair market value for coal on public lands…[puts the value]…much lower than would the market would command…

"…3. Subsidized railroads…Coal is…47 percent of tonnage and 25 percent of revenue for U.S. railroads…U.S. railroads get loans and loan guarantees from government agencies like the Department of Transportation/Federal Railroad Administration and have received numerous tax incentives for investments in new infrastructure…[Also, trains carry coal for export] to Asian countries…[suggesting that] American taxpayers [are] subsidizing the coal boom in countries like China…"