White House Fiscal Year 2011 Budget Proposal Calls for
Massive Coal Mining Tax Hikes; Cap-and-Trade Bill

President Obama this month unveiled a Fiscal Year (FY) 2011 budget proposal that would hit coal mining operations with over $2 billion in new taxes.

Specifically, the president’s budget proposes to raise $2.3 billion over 10 years by eliminating existing tax deductions for coal that the White House staff says “run counter to the national priority (of creating) a clean fuel economy.”

The White House’s budget proposal calls on Congress to repeal tax provisions covering the expensing of exploration and development costs, percentage depletion for coal and “hard mineral fossil fuels,” capital gains treatment for royalties and the domestic manufacturing deduction for coal fuels.

National Mining Association President and CEO Hal Quinn issued a statement following release of the president’s budget proposal warning that “increasing taxes for America’s most affordable energy source – coal – threatens good-paying mining jobs and jobs in small businesses and manufacturing that depend on reliable and affordable energy to meet payrolls and remain competitive in a global economy.”

“At a time when all Americans are focused on the need to keep the jobs we have and to create new ones, these budget proposals will only result in higher costs for half the electricity used in this country and generated from coal,” said Quinn.

“The more than 375,000 people who work in America’s mines are the backbone of our economy and are essential to our recovery,” he added. “They are not asking for a hand-out, rather they are ready to work to rebuild America. Their efforts should not be stopped by new taxes that will cost jobs and hurt our economy.”

The budget proposal also predicts that Congress will address climate change by passing a cap-and-trade bill that would help fund a range of clean energy programs.

However, the FY 2011 proposal did not specify the level of emissions permits that would be auctioned or the revenue such auctions would generate.

Last year, the administration’s budget proposal called for a full auction of carbon credits that would generate $650 billion in revenue over 10 years.

Coal-State House Members Launch Congressional
Coal Caucus

A bipartisan group of 68 House members representing coal-producing states and states that rely heavily on coal for energy have launched a new congressional caucus to provide a voice for coal communities in Congress.

“Coal is a critical component to our nation’s energy future,” said Rep. Shelley Moore Capito, (R-W.Va.) in a release detailing the new caucus.

“Whether it’s on a cap-and-trade bill or on clean coal technology, this caucus will give coal-states a forum to highlight their priorities and present a unified voice,” said Capito.

“As a Congress, it is vitally important that we continue to support the development of clean coal technologies,“ Rep. Jason Altmire, D-Pa., said. “I am proud to help launch this caucus, and I look forward to working with my colleagues to help enact policies that will maximize America’s coal resources.”

More information is available at: Congressional Coal Caucus.

Wall Street Journal Spotlights Dangers of Delayed Mining Permits

A recent Wall Street Journal chronicled the economic damage America is suffering as a result of a mine permitting system that on average takes seven years to approve a permit.

“So despite having vast underground stores of raw materials, the U.S. is one of the last places miners go to start a project,” the Journal reported on Feb. 8.

The story chronicled the difficult road faced by the proposed Kennecott Eagle nickel mine in Michigan’s Upper Peninsula. The company has been waiting more than seven years to get the green light to begin operations.

The story cited a ranking from a leading mining advisory group that tied the U.S. with Papua Guinea for the longest approval process among the 25 top mining countries in the world.

In contrast, permitting in Australia, one of the largest mining nations, takes an average of one to two years.

The story can be accessed here: Permits Drag on U.S. Mining Projects.

Reno Paper Takes Aim at Proposed Nevada Mining Tax

Efforts by a coalition of environmentalists and labor leaders to impose a massive new tax on Nevada’s mining industry through a possible ballot initiative this November drew a sharp rebuke from the editorial board at the Reno Gazette Journal.

In examining the attempt to saddle Nevada mining with a new tax, the paper concluded in a Jan. 27 editorial that “it’s wrong to target any one group of people or businesses for a tax increase while others escape scot-free.”

“Asking the voters to pick winners and losers in the tax wars is a poor way to make such important policy decisions,” the paper said.

The editorial can be accessed here: Nevada needs to overhaul its taxes, not target one industry.

USGS Highlights Economic Impact of Minerals Mining

The U.S. Geological Survey (USGS) recently released its Mineral Commodity Summaries 2009 report, which contains detailed information demonstrating the economic impact of mineral production in the U.S., as well as documenting the nation’s growing dependence on imported minerals. The report found that the value added to America’s GDP by major industries that consume mineral materials stood at nearly $1.9 trillion in 2009, down from 2.3 trillion in 2008 and representing about 13 percent of U.S. GDP

More information is available at: Mineral Commodity Summaries 2010.

White House Launches New Carbon Capture and Storage
Task Force

The White House on Feb. 3 announced a new interagency task force designed to accelerate the development and use of carbon capture and storage (CCS) and other clean coal technologies.

“The Task Force shall develop a proposed plan to overcome the barriers to the widespread, cost-effective deployment of CCS within 10 years, with a goal of bringing 5 to 10 commercial demonstration projects online by 2016,” the White House said when announcing the new taskforce.

National Mining Association President and CEO Hal Quinn said the taskforce is an acknowledgement “by the administration not only of the importance of this technology for controlling global greenhouse gas emissions, but also of the vital role played by coal in supplying affordable electricity to America and a growing world economy.”

“U.S. mining is eager to cooperate with the task force in furthering the development and deployment of CCS and other advanced clean coal technologies,” said Quinn.

More information is available at: White House CCS Taskforce.

Peabody Energy Honors Five Innovative St. Louis Educators

The Peabody Energy/Lagos Leaders in Education Awards program on Feb. 17 honored five St. Louis, Mo., educators for teaching and mentoring excellence that extends beyond the classroom.

“Each of these educators is harnessing the power of education to connect with and engage students in lessons that extend beyond the classroom,“ said Dr. David Thomas, chief executive of the Lagos School.

“Whether through music, creativity or innovation, these mentors are leaving lasting impressions and serving as true leaders in our schools and our communities.“

Peabody Energy has pledged $450,000 over three years to support the Peabody/Logos Leaders in Education awards and benefit the mission of the Logos School. The program recognizes exceptional mentors who transform the lives of students and includes a $1,000 grant.

Any employee at a St. Louis-area, Missouri or Illinois public, charter or private school serving students in kindergarten through grade 12 can qualify.

More information is available at: Peabody Education Award.