The battle over coal has a new front: the royalties companies pay for mining on federal lands.

Environmental and watchdog groups have flagged what they say is a loophole in the Interior Department's coal program that allows coal companies to stiff the state and federal governments.

But the coal industry and its allies contend critics haven't pointed to any significant underpayments on the 12.5 percent fee they are supposed to pay the government for mining on federal land.

They also say opponents aren't concerned about righting alleged wrongs done to taxpayers. Detractors are mainly worried about climate change, they say, and thus are promoting policies that would raise mining costs to ensure coal isn't mined and burned.

"If you go back to what they are now saying, and you won't see it, but it's all part and parcel — it's all about global warming, it's all about carbon dioxide, it's all about leaving it all in the ground," said Dan Kish, vice president of the conservative Institute for Energy Research. "Just step back from this and ask yourself, 'Is the government going to make more money if the stuff stays in the ground?'"

The Interior Department proposed a rule in January that would end a practice in which mining companies sell coal to subsidiaries that they own, which then flip it to international customers at a higher price, mostly in Asia. The issue, critics say, is that the royalty is assessed on the first sale, which is lower than the value at the point of use.

The issue is starting to receive more attention from environmentalists and progressives. Several groups have prodded President Obama to ban fossil fuel extraction on federal land, though he has avoided that strategy.

But when asked how the next president could go further on climate change, environmentalists often mention stomping out federal coal, oil and natural gas first.

"Keep it in the ground. Obama has been great at keeping down demand for carbon, but he hasn't taken on supply," R.L. Miller, co-founder of political action committee Climate Hawks Vote, said in a recent interview.

The proposed rule is the latest example of momentum against the coal industry, which is in a dire financial position due to a combination of coal mines drying up, competition from cheap natural gas in the power sector and environmental regulations.

A coalition of groups led by the left-leaning Center for American Progress said the proposal would have a negligible impact on demand for federal coal and would boost government revenue.

They pointed to a May report by Headwaters Economics that assessed a more aggressive version of a proposed Interior rule to change how royalties are calculated. The study of the alternate rule, which was devised by the Center for American Progress, said power-sector demand for federal coal would drop 1 percent while royalty revenue split between the federal government and the states would increase $512 million annually.

The disparity in price between federal coal in the Powder River Basin in Wyoming and Montana and the coal mined on non-federal land in Appalachia points to a market distortion, said Matt Lee-Ashley, a senior fellow and director of public lands with the Center for American Progress.

Powder River Basin coal fetches about $13 per ton, compared with upwards of $55 for Appalachian coal. But it's nearly impossible to determine how much of the disparity is due to federal policies or supposed flouting of royalty obligations, largely because the royalty payment system is a "black box," Lee-Ashley said.

"We are interested in this at the core because it's a fiscal responsibility issue. It's about getting a fair return for taxpayers," Lee-Ashley said.

If finalized — the comment period for the rule ended May 8 — the rule could hinder development in the Powder River Basin, said Sen. John Barrasso, R-Wyo. The prolific coal region produced 382 million short tons in 2014, accounting for 38 percent of U.S. coal production.

"This is part of the overall government's war on affordable energy," he told the Washington Examiner.

The National Mining Association said the proposed rule would raise costs on the industry and decrease revenue going to states. Some of the deductions for transportation and processing costs given to companies are also vague, coal companies say.

Luke Popovich, a spokesman with the National Mining Association, said the Center for American Progress analysis was flawed.

"CAP's analysis rests on an utterly false premise: federal lease policy is not a factor in the movement of production to the [Powder River Basin] from the Eastern coalfields, let alone an equal factor as they claim. The [Powder River Basin]'s decisive advantages are: an enormous coal resource, geologically advantageous and relatively inexpensive to mine," he said in an email.

The royalties fight is brewing as the federal coal-leasing program has come under fire. A 2013 report by the department's internal watchdog found those tracts often received bids from only one company, thereby undervaluing the land and costing taxpayers money.

Sen. Maria Cantwell, D-Wash., soon will introduce a bill to change the federal leasing program. She said her bill would go further than the Interior royalties proposal, possibly in a nod to groups who think the proposal is too lenient because it allows companies to deduct transportation and some processing costs.

"Let's put it this way — that was one step, but we'd like to see more," Cantwell, the top Democrat on the Energy and Natural Resources Committee, told the Examiner.

The multi-pronged approach is a shrewd way of making the regulatory push seem less ambitious than it actually is, said Rick Curtsinger, a spokesman with Cloud Peak Energy, one of the biggest companies in the Powder River Basin. Taken together, the steps advocated by coal critics could significantly affect production, he said.

"That's one of the things the opponents have done, they've broken apart the revenue pie for the federal and state governments and pointed to individual pieces of the pie instead of looking the revenue as a whole," Curtsinger said.

CORRECTION: An earlier version of this story misidentified the name of the Center for American Progress. The Washington Examiner regrets the error.