This week, Secretary of the Interior Ryan Zinke fields questions from Members of Congress over his agency’s proposed budget. The Department of Interior’s particular piece of Trump’s dirty energy expansion puzzle is an industry buildout of fossil fuel extraction, production, and infrastructure on the public lands and waters that collectively belong to all Americans.
The White House claims that a central goal of the DOI’s dirty energy budget is “ensuring taxpayers receive a fair return from the development of these public resources.” But the idea that opening up more public lands and waters for fossil fuel production will result in a windfall for America is wrong. The only windfall from federal fossil fuel production is enjoyed by oil, gas, and coal executives.
The Federal government already hands fossil fuel companies more than $7 billion a year in corporate subsidies related to their production on federal lands and waters. For onshore oil, gas, and coal production, that includes a giveaway of more than $3.3 billion from below-market royalty rates, unpaid and foregone royalties, inadequate permitting fees, and below-market lease rental rates. And American taxpayers are cheated out of $2.2 billion each year in lost royalties from offshore drilling because of “royalty relief,” which exempts roughly 20% of oil and gas production in the Outer Continental Shelf from paying royalties.
The annual $7 billion figure does not include industry freebies like publicly funded infrastructure for fossil fuel development on our shared land, inadequate financial protections to pay for coal mining cleanup, or decommissioning costs for offshore drilling. Even without Zinke’s planned offshore drilling expansion, the Government Accountability Office estimates that taxpayers’ contingent liability in the Gulf of Mexico for decommissioning costs could be as much as $35 billion.
If the Trump Administration were serious about properly stewarding our shared national energy resources, it would take action immediately to protect America’s public lands and residents:
- Reduce the large, unfunded liabilities that currently sit on the shoulders of American taxpayers, including the $35.3 billion of contingent liabilities in the Gulf of Mexico, and the untold billions in costs to clean up abandoned coal mine sites not covered by fees collected to date.
- Halt all new oil, gas, and coal leasing on federal lands and waters in light of the environmental, public health, and financial costs of continued fossil fuel production.
- Modernize royalty rates that have been stagnant at 12.5% for onshore production since 1920, and lease rates that haven’t changed since 1987, to better reflect the costs of fossil fuel extraction on federal lands.
The American public needs Congress have to reject Sec. Zinke’s dirty energy budget and resist Trump’s fossil fuel expansion agenda.
For more on why the Interior Department’s budget is a massive giveaway to big polluters and a direct attack on renewables, see our recent blog: “Interior budget boosts fossil fuels, cuts renewable funding.”
For more on the $7 billion per year in taxpayer money currently being given away to the oil, gas, and coal industries to extract on public lands, see our recent report: “Unequal Exchange: How Taxpayers Shoulder the Burden of Fossil Fuel Development on Federal Lands.”