Coal Distribution and Utilization Act of 1987

(Reported to Senate from the Committee on Energy and Natural Resources with amendment, S. Rept. 100-325)

Coal Distribution and Utilization Act of 1987 - Directs the Secretary of Energy to determine whether any proposed interstate coal pipeline distribution system is in the national interest (including any such system using a transport medium other than water). Requires the Secretary, in making such determination, to make findings concerning the extent to which the system would: (1) help meet national needs for coal distribution and utilization; (2) enhance competition; (3) contribute to national security; (4) reduce coal transportation costs; (5) reduce electric rates; (6) enhance the reliability of supplies of coal and electricity; and (7) affect the environment. Requires an applicant for a pipeline to offer to make available to small and independent producers the lesser of: (1) ten percent of the pipeline's capacity; or (2) the pipeline capacity necessary to satisfy such producers within the geographic region served by the pipeline. Defines a "small and independent producer" as one: (1) producing less than 200,000 tons of coal annually; or (2) not affiliated with another company.

Requires the Secretary: (1) to render a decision on a pipeline's application within 18 months of receipt of a completed application; and (2) to notify the Governor of each State in which the pipeline will be located. Directs the Attorney General to conduct an antitrust review of each application.

Prohibits the acquisition through eminent domain of: (1) water rights; and (2) historic sites or wildlife refuges, unless there is no feasible or prudent alternative.

Requires applications to list each instance where the proposed right-of-way crosses lands in which the United States maintains a mineral interest regarding coal. Requires the Secretary of the Interior to evaluate the effects of approval of such application upon U.S. ability to realize the value of such mineral interest as a result of the approval of the application. Directs the Secretary of the Interior to establish: (1) the fair market value of the Federal coal precluded from being recovered as a result of the proposed right-of-way; and (2) the amount of the reduction of the fair market value of Federal coal which will be more costly to recover as a result of the proposed right-of-way. Directs the Secretary of Energy to establish terms and conditions requiring an applicant to pay the amount established by the Secretary of the Interior.

Prohibits any person or governmental entity or any interstate coal pipeline distribution system from controlling, reserving, appropriating, diverting, acquiring, using, or claiming water for export or use within or outside the State granting or denying the export or use of water in an interstate coal pipeline distribution system, unless such control takes place pursuant to the State water law. Delegates to the States the power to regulate the use or export of water in interstate coal pipeline distribution systems.

States that this Act does not preempt State water law with respect to an interstate pipeline distribution system even if such law discriminates or has the effect of prohibiting the location, construction, operation, or maintenance of such pipeline.

Prohibits this Act from impairing the validity of or in any way preempting any State or local law pertaining to the location, construction, operation, or maintenance of an interstate coal pipeline distribution system except where such State or local law discriminates against interstate coal pipeline distribution systems.

Requires all coal pipelines granted Federal powers of eminent domain to be located underground, to the maximum extent practicable.

Prohibits this Act from requiring a State to approve an automatic passthrough of pipeline construction, operation, and maintenance costs.

Subjects any interstate pipeline distribution system authorized under this Act to the requirements of the Federal Water Pollution Control Act and any other applicable State and Federal environmental control laws.

Directs the Secretary of Energy to notify the Administrator of the Environmental Protection Agency of applications for an interstate coal pipeline distribution system using water as the transport medium.

Requires the Administrator to conduct a review of the ability of the proposed interstate coal pipeline distribution system to comply with Federal water discharge requirements. Prohibits the Secretary from issuing findings as to whether or not a pipeline is in the national interest unless the Administrator has reported that requirements of the Federal Water Pollution Control Act can be met.

Authorizes operators of certain interstate coal pipeline distribution systems to enter into contracts with coal shippers to provide transportation if the contract has been filed with the Federal Energy Regulatory Commission (FERC). Prohibits such operators from discriminating unreasonably by refusing to contract with other shippers under similar conditions. Obligates operators of interstate coal pipeline distribution systems to perform only the duties set forth in the contract. Sets forth grievance procedures under which FERC shall order an operator found to be in violation of this Act to provide the service contracted for.

Prohibits the FERC from approving any contract for pipeline transportation of coal if: (1) the total coal tonnage to be transported under contract exceeds the maximum capacity of the pipeline; or (2) the provision of coal transportation services under such contract would result in a destructive competitive practice.

Amends the Mineral Leasing Act to authorize a common carrier railroad company (or affiliated company) to hold coal deposit leases subject to specified conditions regarding: (1) lease bidding; (2) lease holdings; and (3) transportation of leased coal.

Prohibits a railroad or affiliated company from bidding for a lease of coal deposits adjacent to coal deposits owned by it in land granted by the United States to such railroad, affiliate, or predecessor unless the Secretary of the Interior has been notified before the lease sale of the railroad or affiliate's intention to bid. Prescribes conditions for such a bid. Sets forth conditions under which a railroad company whose coal deposit lease is situated within its exclusive service area may nevertheless enter into a coal transportation contract. Sets forth a complaint procedure for a coal producer who alleges that a railroad company's contract to haul its affiliate's coal from its exclusive service area is not identical in all material respects to the railroad's bid to haul the competing producer's coal. Authorizes a coal shipper or producer to file a complaint with the Interstate Commerce Commission based on grounds of: (1) unreasonable discrimination; or (2) destructive competitive practices.

Subjects any holder of a Federal coal lease (including a railroad or its affiliated company) to provisions regarding unlawful trusts under the Mineral Lands Leasing Act.