WHITE HOUSE COAL REPORT White House Report Highlights How Federal Lands Provide Significant Resources for the Coal Industry Market Share of Coal Produced from Federal Lands Analysis The procedures that currently dictate coal leasing on federal lands were last changed in the 1980’s Complaints with the current model of the coal- leasing program is that incentives are too high for producers and there is not a sufficient benefit returned to taxpayers. July 1, 2016 | Claire Carter Sources: Executive Office of the President, “The Economics of Coal Leasing on Federal Lands: Ensuring A Fair Return to Taxpayers,” White House, June 2016; Brittainy Patterson, “White House: Raising Federal Royalties Will Save GHG’s,” E & E Publishing, June 23, 2016; NounProject, David Chapman, Arthur Shlain 450 Million Tons Per Year $700 Million in Federal and State Revenue

WHITE HOUSE COAL REPORT Three Sources of Income from Coal Mined from Federal Land Lead to Almost $1 Billion a Year How the Federal Government Receives Revenues from Coal Leasing Program July 1, 2016 | Claire Carter Sources: Executive Office of the President, “The Economics of Coal Leasing on Federal Lands: Ensuring A Fair Return to Taxpayers,” White House, June 2016; Brittainy Patterson, “White House: Raising Federal Royalties Will Save GHG’s,” E & E Publishing, June 23, 2016; NounProject, David Chapman; NounProject, David Chapman. Bonus Bids First-price sealed-bid auction with a confidential minimum bid set by Department of Interior Minimum bid is the fair market value for the tract of land plus a $100 per acre fee Rental Fees Minimum rental fee of $3 per acre per year for use of federal lands Production Royalties Paid once coal is removed from the ground and is a percentage of the revenue at sales price Royalty rates are set by regulation and are fixed at 8% for underground mines and no less than 12.5% for surface mines

ROYALTY RATE RULE Royalty Rate Reform Aims to Prevent Selling Coal to Subsidiary/Affiliate Companies at Lower Than Market Rate New Rule From Department of Interior on Royalty Rates for Coal Leases July 1, 2016 | Claire Carter Sources: Timothy Cama, “Regulators Close ‘Loophole’ in Fees for Fossil Fuel Extraction,” The Hill, June 30, 2016; Matthew Daly, “Obama Admin Changing Coal Royalty Program to Boost Revenue,” U.S. News and World Reports, June 30, 2016; NounProject, David Chapman, Max Hancock, Luis Prado, Nakul Dhaka, Stephen Borengasser. Rule Since 1980’s Coal from Federal Lands Sale to Affiliate or Subsidiary Royalty Rate Set Final Sale of Coal “The Arms Reach Rule” New Rule Coal from Federal Lands Sale to Affiliate or Subsidiary Royalty Rate Set Final Sale of Coal Before the new rule, the final sale of coal was to foreign markets where the companies could get a much higher payment than initially paid to the subsidiary. The royalty rate is now be based off the price of sale to the first outside company.

ROYALTY RATE RULE Rule To Increase Royalty Rates for Coal from Federal Lands Comes After Three Years of Dramatic Drop in Coal Exports Imports and Exports of Coal in the United States from July 1, 2016 | Claire Carter Sources: Energy Information Administration, 2016; Timothy Cama, “Regulators Close ‘Loophole’ in Fees for Fossil Fuel Extraction,” The Hill, June 30, 2016; Matthew Daly, “Obama Admin Changing Coal Royalty Program to Boost Revenue,” U.S. News and World Reports, June 30, ■ Exports ■ Imports Short tons of coal, in millions Analysis The White House coal report said that doubling the royalty rate on each ton of coal extracted would have a minimal impact on coal mined from federal lands-a mere 7% decrease in extraction. The increase in the rate could bring as much as $730 million a year in new revenue. Coal miners and supporters of the coal industry have protested the moratorium and rule saying the industry is already suffering due to increased pollution regulations, competition from natural gas, and widespread bankruptcy.