Coal companies sell coal to themselves to boost profits

(Image credit: Luke Sharrett/Getty Images)

last updated 11 January 2015

Some coal mining companies have found a way to game the system in Washington, D.C. Because much mining is done on federal lands, coal companies are required to pay royalties to the government for land use. However, those payments aren't a flat fee; they're a percentage of the money made from the coal the land produces. So coal miners create subsidiary companies to which they "sell" their coal at a discounted rate — which lowers their royalty fees — and then resell the coal at market value later on.

Coal companies are already the beneficiaries of numerous federal subsidies in the form of grants, direct monetary transfers, loan guarantees, and assistance with cleanup following environmental damage.

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Bonnie Kristian was a deputy editor and acting editor-in-chief of TheWeek.com. She is a columnist at Christianity Today and author of Untrustworthy: The Knowledge Crisis Breaking Our Brains, Polluting Our Politics, and Corrupting Christian Community (forthcoming 2022) and A Flexible Faith: Rethinking What It Means to Follow Jesus Today (2018). Her writing has also appeared at Time Magazine, CNN, USA Today, Newsweek, the Los Angeles Times, and The American Conservative, among other outlets.