Economic Implication of Coal Taxation

Throughout the past 40 years we have been drawing inevitably closer to the conclusion that coal will be our chief source of energy. Our reserves of natural gas and petroleum, on which we depend, are dwindling. Knowing that we will soon reach our physically extractable limit of these energy sources. The US government has created many incentives to encourage energy companies to transfer technology and resources from natural gas and petroleum to coal. Such encouragement is stimulated through taxation methods. Coal mining engineers deal mainly with production, which involves planning and design throughout the acquisition, exploration, development, production, and reclamation of a mine. Though taxation is not one of the areas analyzed by the engineer, it should be considered and understood as it is involved in the mine life cycle. This paper will discuss coal taxation in the five stages of mining and will explore certain tax saving decisions.