16 Nat. Resources J. 415 (1976)
Coal Taxation in the Western States: The Need for a Regional Tax Policy

handle is hein.journals/narj16 and id is 433 raw text is: COAL TAXATION IN THE WESTERN STATES:
THE NEED FOR A REGIONAL TAX POLICY
Coal is the most abundant and potentially the most valuable mineral
energy resource of the United States. The decline in domestic crude
oil production, growing shortages of natural gas, and rising prices
and reduced availability of foreign oil all point to an increased re-
liance on coal as an energy source.1
More than half of the estimated identified coal resources remain-
ing in the ground in the United States as of January 1, 1972, were
located in the ten states of the Western Governors' Energy Confer-
ence.2 The coal in this region is the only low-sulfur strippable coal in
the United States? The purpose of this Comment is to encourage
these states to cooperate in the formation and implementation of a
regional tax policy for coal extraction. The goals of resource taxation
as they relate to coal and the theory of the taxation of coal will be
examined. Then a survey will be made of the taxes imposed on the
coal industry in these states. Last, a proposal will be made for a
regional coal taxation scheme which could result in Pareto
optimality' -the optimum condition for a comparative tax structure.
GOALS OF RESOURCE TAXATION
The most important goal of a regional tax policy should be to
assist each state in realizing its state tax goals. This will be a relatively
simple task if state tax goals are uniform. The search for uniform tax
1. Leistritz & Voelker, Coal Resource Ownership: Patterns, Problems, and Suggested
Solutions, 15 Nat. Res. J. 643 (1975). See also Habicht, The Northern Plains Coal Re-
source-Case Study in Public Nonpolicy, in Energy: Demand, Conservation, and Institu-
tional Problems 249 (M. Macrakis ed. 1974).
2. Averitt, Coal, in United States Mineral Resources 133, 135, 137 (1973) (hereinafter
cited as Averitt). The ten states in the conference are Arizona, Colorado, Montana, Nebras-
ka, Nevada, New Mexico, North Dakota, South Dakota, Utah and Wyoming. There are no
coal resources located in Nebraska or Nevada. South Dakota's resources are negligible, and
there is no major mining. Therefore, those states will not be considered in this note.
3. Id. Sulfur is an undesirable element in coal. It lowers the quality of coke and of the
resulting iron and steel products. It contributes to corrosion, to the formation of boiler
deposits, and to air pollution. Its presence in spoil banks inhibits the growth of vegetation.
As sulfuric acid, it is the main deleterious compound in acid mine waters, which contribute
to stream pollution. Id at 135.
4. Pareto optimality is a criterion of welfare economics, named after Vilfredo Pareto
(1848-1923), the Italian scientist who pioneered in developing the concept of economic
efficiency. Pareto optimality is more fully discussed under the Heading Optimum Tax.

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