U.S. News & World Report

COMMENTARY

The Department of the Interior is on the verge of selling public lands for a fraction of their worth.

By Jayni Hein Opinion contributorJune 6, 2018, at 10:26 a.m.
U.S. News & World Report

Pushing for the Public Interest

In December, the Trump administration scaled back federal protections on millions of acres of land in two national monuments in Utah, including Bears Ears National Monument. (KATHERINE FREY/THE WASHINGTON POST/GETTY IMAGES)

PUBLICLY OWNED LANDS IN the United States contain many of the country’s most iconic natural areas as well as a wealth of natural resources. But these taxpayer-owned assets are on the verge of being given away for a fraction of their true value in an effort to prop up the uneconomical mining and drilling operations of some fossil-fuel companies, who clearly have the Department of the Interior’s ear.

Interior is required by law to earn “fair market value” for the use and development of public natural resources, including coal, oil and natural gas. Royalties are a significant source of revenue for the federal treasury and for states with mineral production, which receive a share of federal royalties.

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An antiquated system established in the 1920’s has allowed the fossil fuel industry to underpay royalties for decades and deprive taxpayers of revenue that could support infrastructure projects, public schools, and environmental protection. The Obama administration took several steps to improve the system, including by closing a costly loophole that allowed coal firms to underpay royalties by selling coal to their subsidiaries at artificially low prices. The change was expected to save taxpayers up to $78 million every year.

But the Trump administration is working to undo these improvements. Today, the Department of Interior’s Royalty Policy Committee, a fraternity largely comprised of those with close ties to the fossil fuel industry, will meet in New Mexico for a regularly scheduled meeting where they will vote on policy recommendations.
The committee’s charter directs it to ensure that the “public receives the full value of all natural resources produced from Federal lands,” but the Committee appears intent on doing exactly the opposite. Instead, it is myopically focused on advancing the interests of fossil fuel companies at the expense of the public and our federal natural resources. In sessions led by coal executives, the committee has focused on reinstating the coal valuation loophole, in order to avoid paying royalties that are owed to the public.

One of the committee’s most significant recommendations to-date was a proposal to lower the deepwater offshore royalty rate, diverting more public money to fossil fuel companies. This proposal was seen as so biased and unreasonable that Interior Secretary Ryan Zinke, who chose the committee members, rejected their recommendation following political pressure and probingas to what data could support such a federal giveaway. Taxpayers may have dodged that bullet, but at today’s meeting, the committee will discuss how Interior may be able to skirt the legal requirements of the National Environmental Policy Act in order to accelerate drilling, and how to encourage more discretionary royalty rate reductions for late-stage and “challenging” leases. These moves would further open the door to environmental damage, government giveaways and industry self-dealing.

The committee’s fossil fuel industry members are clearly looking out for themselves, but who is looking out for the public?

When Secretary Zinke first announced the creation of the Royalty Policy Committee, he had the potential to convene a diverse, informed group of stakeholders. Instead, he stacked the committee’s 20 primary and 18 alternate members with executives from fossil fuel industries, representatives from Republican states, and fossil fuel industry-connected members of Native American tribes. In a striking effort to exclude the public interest, Interior did not name a single representative from an environmental, conservation or taxpayer advocacy group, even as these organizations have been engaged in policy debates about fossil fuel leasing policies and fiscal reform for years. These groups have repeatedly commented on the need for more public interest participation on the committee; but adding insult to injury, Interior quietly added two individuals to a subcommittee to “represent the public interest” from the Heritage Foundation and Americans for Tax Reform, two organizations strongly opposed to regulation.

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The make-up and focus of the Royalty Policy Committee is part of a troubling pattern by this administration that seeks to elevate fossil-fuel interests over the public interest. Secretary Zinke has established other committees to craft policies that can enrich their own bottom line, such as the “Made in America” Recreation Committee whose representatives overwhelmingly hail from hotel, vehicle and hunting industries. Absent from this roster are any outdoor recreation businesses that support conservation, like Patagonia and REI, both of which have publicly opposed President Trump’s unprecedented reduction of national monuments.

Interior is required to balance fossil fuel development with other equally important uses, including preservation, recreation and renewable energy development. But instead of considering these important values, the committee has recommended conducting new oil and gas lease sales in the pristine Arctic National Wildlife Refuge, a recommendation that Interior recently embraced.

Ultimately, the Royalty Policy Committee’s focus on “energy dominance” has translated into proposals that would reduce or avoid royalty payments, provide inefficient royalty rate reductions, and pave the way for drilling in our most sensitive public lands, without properly compensating the American people for the use of their resources. This is not government by the people, for the people; it is self-dealing in plain sight.

Jayni Hein, Opinion contributor

Jayni Hein is the policy director at the Institute for Policy Integrity at New York University  READ MORE  »

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