Interior's Plan to Cut Underground-Coal Royalties Criticized
The Interior Department plans to seek a reduction in federal royalties on coal from underground mines, against the advice of department economists who say that the action cannot be justified.</br></br>The department's Land and Minerals Management division is expected to propose within weeks that the royalty rate, now 8 percent for most underground mines, be reassessed and dropped to as low as 5 percent.</br></br>Michael A. Poling, the deputy assistant secretary for land and minerals management, said the action was being taken at the request of coal companies, which complained that the current royalty rate is "onerous." "It makes underground coal uncompetitive with coal from surface mines and other sources," Poling said. "We've had a lot of concern expressed by our constituents in the coal industry."</br></br>But critics described the effort as a "farewell gift" to the coal industry, and said the change is likely to increase pressure for royalty reductions at surface mines as well.</br></br>"Everyone involved knows it's just a step to reduce rates across the board," said one source, who also said that the proposal is being expedited to assure that it takes effect before the Reagan administration leaves office.