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Interior Department rescinds Obama-era coal rule


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WASHINGTON, Aug 7 (Reuters) - The U.S. Department of the Interior said on Monday it has rescinded an Obama-era rule that reformed how energy companies value sales of oil, gas and coal extracted from federal and tribal land to protect taxpayers because it caused "confusion and uncertainty" for energy companies.

Interior Secretary Ryan Zinke said the department's newly formed royalty policy committee would propose alternatives to the rule and "remain committed to collecting every dollar due."

"Repealing the valuation rule provides a clean slate to create workable valuation regulations," Zinke said in a statement.

RELATED: Coal mining in America

The valuation rule was proposed by former Interior Secretary Sally Jewell last year to close a loophole that enabled companies to dodge royalty payments when mining on taxpayer-owned public land. It required energy companies to pay royalties on sales to the first unaffiliated customer, known as an arm's-length sale, as the fuel moves to market.

A Reuters investigation found in 2012 that coal companies were using affiliated brokers to settle royalty payments on exports to Asia at much lower domestic prices.

Zinke said the valuation rule had increased costs for coal, oil and gas companies, which hampered production on federal lands, "making us rely more and more on foreign imports of oil and gas."

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Industry stakeholders and trade associations filed three lawsuits challenging the Obama-era rule.

Meanwhile, the Institute for Energy Economics and Financial Analysis, a taxpayer watchdog group, found that taxpayers missed out on nearly $30 billion in revenues over three decades because of the loophole.

The repeal of the valuation Rule was published in the Federal Register on Aug. 7 and will become effective on Sept. 6. (Reporting by Valerie Volcovici; Editing by Sandra Maler)

Coal mining in America

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  • Scranton Miners
    circa 1935: Two miners at work in an anthracite mine near Scranton, Pennsylvania. (Photo by MPI/Getty Images)
  • Coal Miner at Day's End
    Blaine Sergent, coal leader, putting up his check at end of day's work. Lejunior, Harlan Co., Ky. Sept. 13, 1946. | Location: Lejunior, Kentucky, USA. (Photo by � CORBIS/Corbis via Getty Images)
  • Row of Coal miners shanties on Elk River at Bream, W. Va.
    Row of Coal miners shanties on Elk River at Bream, W. Va. Location: Bream, West Virginia (Photo by Lewis W. Hine/Buyenlarge/Getty Images)
  • Coal Miner And Family On Porch
    A coal miner stands on his front porch with his wife and their two children, in Bertha Hill, West Virginia, September, 1938. (Photo via Smith Collection/Gado/Getty Images).
  • View of Coal Mine Strikers in West Virginia
    (Original Caption) One of the earliest battlegrounds in the current strike of Miners of the steel companies 'captive' coal mines is pictured here. The scene is the captive mine of the united States Coal and Coke Company in Gary, West Virginia. Various weapons were brought into play, as members of an Independent Miner's Union engaged in a free for all with striking United Mine worker's pickets who sought to bar their entry. Two men were shot here. A skirmish is shown in progress on the battleground, as the men in the center of the photograph are being wetted down by a stream of water from a fire hose directed from inside the building.
  • Breaker Boys
    Group portrait of boys working in #9 Breaker Pennsylvania Coal Company, Hughestown Borough, Pittston, PA, 1908. (Photo by Lewis W. Hine/Buyenlarge/Getty Images)
  • Breaker Boys and Woodward Coal Breakers.
    Photograph of Breaker Boys and Woodward Coal Breakers, Kingston, Pennsylvania. Dated 1906. (Photo by: Universal History Archive/UIG via Getty Images)
  • Undercutting at the coal face, Foxyards Pit, Staffordshire, c 1890s.
    UNITED KINGDOM - MAY 31: Photograph by Herbert William Hughes (d 1937). Hughes was elected a member of the Royal Photographic Society in 1893, and became a fellow two years later. (Photo by SSPL/Getty Images)
  • Coal Miners Using Automatic Conveyor
    Coal Miners Using Automatic Conveyor (Photo by George Rinhart/Corbis via Getty Images)
  • Boys Working In Coal Mine
    (Original Caption) Coal mining: Young boys working in Pennsylvania coal mine before the introduction of the child labor laws. Photograph ca. 1895 shows them standing with horses at mine entrances.
  • Coal Strike in West Virginia
    Red Jacket, West Virginia. Miner and wife with 5 children outside of tent.
  • Three Coal Breaker Boys, Woodward Coal Mines, Kingston, Pennsylvania, USA, circa 1890
    Three Coal Breaker Boys, Woodward Coal Mines, Kingston, Pennsylvania, USA, circa 1890. (Photo by: Universal History Archive/UIG via Getty Images)
  • Boy Working at a Mine
    (Original Caption) Mine 'Tipple Boy', West Virginia coal mine. Photograph by Lewis Hine, 1908. BPA 2 #3116.
  • Portrait of 15-year Old Boy Working as Trapper at Coal Mine, His only Job is to Open and Close the Door, West Virginia, USA, circa 1908
    Portrait of 15-year Old Boy Working as Trapper at Coal Mine, His only Job is to Open and Close the Door, West Virginia, USA, circa 1908. (Photo by: Universal History Archive/UIG via Getty Images)
  • Coal Miners Returning to Work After Strike
    Striking coal miners return to work at the Haveco Mine in West Virginia. (Photo by Library of Congress/Corbis/VCG via Getty Images)
  • John Lewis Covered with Coal Dust
    (Original Caption) 12/29/1951-West Frankfurt, IL- Weary and covered with coal dust after spending eight hours in the New Orient mine at West Frankfort, IL, John L. Lewis, United Mine Workers' head, pauses to answer reporters' questions. Lewis and other investigators are seeking the cause of the blast which recently took the lives of 119 miners.

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