Recently, I introduced legislation that would stop the Department of the Interior (DOI) from enacting another cumbersome rule that would change the way coal is valued when mined from public land. The end result would be increased uncertainty for an industry that is constantly battling this administration’s war on fossil fuels. There has been a lot of misinformation about this issue and I wanted to set the record straight because Montana coal workers and the Crow Nation deserve a fighting chance.
Currently coal is valued (for royalty purposes) when it’s sold, however the new rule would value it based on when it’s turned into electricity. This could not only cause long gaps but also create huge levels of uncertainty because utility rates fluctuate so much. This may seem like a small change in the process, but it would have huge repercussions in Montana, especially counties supported by mines like Big Horn, Yellowstone and Musselshell, as well as the Crow Nation. By blocking this new rule from going into effect, the amendment will prevent uncertainty from taking over the market, which would lead to fewer jobs and less revenue for local governments who collect royalties.
Opponents who don’t understand the issue argue this is a tax break for coal companies and that it would reduce revenues for local governments. This could not be farther from the truth. In fact, the non-partisan Congressional Budget Office determined the rule to be deficit neutral. And a group of bipartisan local governments and stakeholders oppose the change because it would kill jobs and put royalty and tax revenues in jeopardy.
In a letter to the DOI, the Yellowstone County Board of Commissioners wrote: “… it is our understanding that the rule creates more uncertainty and complexity, which could lead to reduced production and thus a decrease in royalty and tax revenues, impacting our county directly… The uncertainty created by this expansion of power also threatens to lower production.”
And Gov. Steve Bullock agrees, writing: “Coal production is an important part of the Montana economy, as well as that of the Crow Nation. We benefit not only from our share of the royalty payments, but also from the associated jobs, economic development, and tax revenues … These provisions, which provide broad discretion to retroactively set federal coal royalties, coupled with an unreasonable and unacceptable lag in the timing of royalty audits (sometimes as long as eight years), could stifle new investment by creating too much uncertainty.”
Montana is estimated to have more than 25 percent of America’s recoverable coal reserves. Yet, the Crow People suffer from unemployment rates as high as 50 percent – despite having over a billion dollars in coal on their own land. Similar situations play out in communities across America. In the words of Crow Chairman Old Coyote, “A war on coal is a war on the Crow people.”
Republicans and Democrats agree – we all want clean air and water and affordable power. Thankfully, advances in clean-coal technology have made it possible to have both, allowing us to use our vast reserves to power American homes and our industrial complex. We can’t power the economy on pixie dust and hope; it takes innovation and investment in areas like clean coal. Unfortunately, this Administration is fighting a more aggressive war against American coal than it is against ISIS.
We all know of the countless attempts to kill coal with regulations, cap-and-trade and carbon taxes. The DOI’s ill-conceived plan is just the latest example that will create an unpredictable and unstable market that threatens the livelihoods of our local communities and tribes. I have no doubt that if the DOI progresses with their plan, it will result in massive job loss for Montana. I find that unacceptable when the opportunity for growth is so great.
The national labor participation rate is the lowest it has been in the past 30 years. Wages are stagnant, the cost of living is going up, and energy prices for home heating and manufacturing are skyrocketing. Our communities cannot afford another federal assault on the economy.
These are real jobs at stake. I’ve been to the Rosebud mine in Colstrip where International Union of Operating Engineers Local 400 earn their paychecks to provide for their families. Across our state, more than 1,200 Montanans are employed in the coal industry.
Coal remains Montana’s and our nation’s largest source of electricity because it is affordable and readily available. Whether the coal is mined in Montana or turned into electricity to build cars in Michigan, coal is an important part of the American economy.
In the words of Chairman Old Coyote: “For the Crow people, there are no jobs that compare to a coal job – the wages and benefits exceed anything else that is available.” I will continue to defend Montana coal workers as long as I represent them and their families in Congress.
Ryan Zinke is a U.S. congressman from Whitefish.