trending Market Intelligence /marketintelligence/en/news-insights/trending/aujwkzsc2c2y0cwhx-2cfq2 content esgSubNav
In This List

Coal lobby spending drops in 2017; focus on regulations, taxes, overseas trade


Despite turmoil, project finance remains keen on offshore wind

Case Study

An Energy Company Assesses Datacenter Demand for Renewable Energy


Japan M&A By the Numbers: Q4 2023


See the Big Picture: Energy Transition in 2024

Coal lobby spending drops in 2017; focus on regulations, taxes, overseas trade

Regulations, tax reform and international trade options were among the major areas of focus for coal industry lobbyists under the first year of a new administration that has made helping the sector a priority.

The coal sector decreased its lobbying expenditures in 2017 compared to the years under the Obama administration and reported $8.8 million in spending, compared to $9.1 million in 2016 and $15.1 million in 2014.

Matt Grossmann, director of the Institute for Public Policy and Social Research at Michigan State University, said lobbyist spending tends to increase when an industry is perceived as under threat. "Most lobbying is counteractive or negative," he said.

Lobbying expenditures include, but are not limited to, travel expenses, office rent, salaries for in-house lobbyists, legal fees, association dues and funds paid to any outside service for lobbying services. Data compiled by S&P Global Market Intelligence was reported by the company or organization to the U.S. Senate Lobbying Disclosure Act Database.

Grossman said the decline in reported lobbying expenditures could be explained by the industry's focus on the Trump White House rather than Congress, making expenses harder to confirm under Congressional requirements.

"They're less likely to report if what they are doing is mostly on the executive branch," Grossmann said. "I wouldn't be surprised if we saw reported lobbying decline but White House visits go up or meetings with an executive agency go up. Both those things could be occurring."

SNL Image

Regulation blitz

Regulations including the Clean Water Act, the Waters of the U.S., or WOTUS rule, the U.S. Environmental Protection Agency's Clean Power Plan and the Mercury and Air Toxics Standards were among the regulations targeted by coal-sector lobbyists in the second half of 2017, drawing focus from entities such as Peabody Investments Corp., an affiliate of Peabody Energy Corp. Arch Coal Inc. the National Mining Association; and the American Coalition for Clean Coal Electricity.

According to a Peabody spokesperson, the coal producer "tracks proposed legislation and engages with governmental entities to advocate policies that protect affordable, reliable energy and ensure coal's continued role as part of a balanced global energy mix."

The industry has seen some progress on proposals to repeal Obama administration energy and environmental rules.

Uinta Basin producers Bowie Resource Partners LLC and Alton Coal Development LLC focused on federal lands permitting issues, with Alton working to secure a permit for its Coal Hollow project. Bowie also lobbied on renewable fuels credits.

Tax reform was a focus of lobbying by coal producers such as Peabody, Murray Energy Corp., and Drummond Co. Inc. during the year, with a number now reporting significant benefits from tax reform legislation passed in December.

While Murray Energy and a West Virginia Coal Association executive took issue with early versions of the tax reform legislation, Murray spokesperson Gary Broadbent said the coal producer is pleased that Congress has fully repealed the alternative minimum tax as well as other "necessary tax reforms."

Some sector supporters, including the United Mine Workers, also dedicated resources to protecting miner pension programs, which have been under threat in recent years. Lawmakers responded with legislation in August 2017 to protect some miner pension plans.

Looking to coal's future potential

Industry advocates looking for ways to prolong the life of coal for power generation, including Peabody and the UMWA, worked to support an extension for the 45Q tax credits that encourage carbon capture technology. Legislation supporting the credits passed Congress in February with widespread support among lawmakers and the coal industry.

Contura Energy Inc. lobbied for "any provisions to establish or incentivize federal demonstration sites for coal power generation technologies," while Cloud Peak Energy Resources LLC also lobbied for carbon capture incentives.

International coal trade also figured in several coal producers' lobbying efforts.

Lighthouse Resources Inc spent funds, mostly in the fourth quarter, to "educate members of Congress" on coal trading to Asian countries and on trade agreement issues, according to its lobbying reports. The coal producer is suing Washington state for denying permits to its subsidiary Millennium Bulk Terminals-Longview for a planned export facility. Lighthouse exports coal to Asia through Western Canadian facility Westshore Terminals LP.