Coal Royalty Reform: Impact on Prices, Production, and State Revenue

  • The Office of Natural Resources Revenue (ONRR) of the Department of Interior has proposed to reform the way federal coal is valued for federal royalty assessment.
  • ONRR’s proposed rule would use arm’s length transactions to value coal for royalties for both arm’s length and non-arm’s length sales. We find that this proposal would not affect revenue, prices, or production—nor increase transparency.
  • Headwaters Economics analyzed two additional reforms—utilizing the net delivered price and limiting transportation cost deductions. These reforms would have substantial revenue benefits for federal and state governments, limited impact on coal production or prices on federal lands, and increased transparency.

coal trail cars

Author:
Mark Haggerty

For more information about this topic contact:

Kelly Pohl