"A federal judge yesterday struck down Obama-era regulations on royalty valuations for coal mined from public lands but kept parts of the rule related to oil and gas payments.
The 2016 rule by the Interior Department’s Office of Natural Resources Revenue aimed to rein in mining companies’ practice of selling coal at a discounted rate to their own subsidiaries, deflating the royalty fees owed to taxpayers for developing publicly owned fossil fuels.
The rule placed the royalty valuation on the first "arm’s length" sale of coal, or when the mining company sells it to an unaffiliated organization.
Sometimes companies or cooperatives both produce the coal and sell it to an affiliate that burns it at a power plant — meaning arm’s-length transactions don’t exist.
In those cases, the Obama rule proposed basing the value of the coal on the sale of electricity. Chief Judge Scott Skavdahl of the U.S. District Court for the District of Wyoming disagreed with that methodology."
James Marshall and Pamela King report for E&E News September 9, 2021.
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