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Interior Secretary Highlights Need for Coal Royalty Reform

The federal government needs to improve the way it manages natural resources on public lands, according to Sally Jewell, the Secretary of the Interior.

Jewell spoke yesterday at the Center for Strategic and International Studies in Washington, DC, where she laid out the Department’s energy priorities for the next two years. Among these priorities is “ensuring that the American taxpayer is getting a fair return for the use of natural resources on public lands,” according to Jewell.

Pointing to recent reports from the Government Accountability Office and the Interior Inspector General, as well as to bipartisan concern from Congress, Jewell noted that the federal coal program is especially in need of reform.

Her remarks come as the Department’s Office of Natural Resources Revenue is proposing new regulations on how companies value natural resources on federal and Indian lands. The regulations would close loopholes that allow coal companies to pay royalties to the federal government and to tribes and individual native people at below market value.

These loopholes mean that the federal government—and ultimately, the American taxpayer—is losing out on tens of millions of dollars each month, according to recent analysis by the Center for American Progress. Because the federal government doesn’t release data on the royalties that companies pay to extract minerals from Indian lands, it is difficult to calculate how much additional money tribes and individual native people are not being paid.

Jewell’s support of coal royalty reform is an important step in the right direction, but neither her speech nor Interior’s proposed regulations address lost royalties from another category of natural resources known as hardrock minerals.

Under a law from 1872 that’s still on the books, companies do not pay any royalties for the extraction of hardrock minerals, such as gold and copper, from public lands. Instead, companies pay an annual fee of only $155 for each land claim, according to the White House’s 2016 budget proposal. If the proposal passes Congress, the American taxpayer will finally start receiving royalties from certain hardrock minerals being mined from public lands.

Americans deserve a fair return on all public natural resources. As Jewell said, “We need to improve the way we do business as a federal government, plain and simple.”

Read Jewell’s entire speech here.

Image from Flickr user eastcolfax.

By: Mia Steinle
Investigator, POGO

Mia Steinle, Investigator Mia Steinle is an investigator for the Project On Government Oversight and the civil society coordinator for the U.S. Extractive Industries Transparency Initiative. Her work focuses on government management of the oil, gas, and mining industries.

Topics: Energy and Natural Resources

Related Content: Department of Interior Oversight

Authors: Mia Steinle

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