Are Taxpayers Being Shortchanged from Natural Resources Revenue?

Senior White House official joins POGO, Taxpayers for Common Sense and others to discuss getting “better bang for the buck” from public lands

At a roundtable public discussion sponsored by the Project on Government Oversight (POGO) and Taxpayers for Common Sense, Ali Zaidi, Associate Director for Natural Resources, Energy, and Science Programs at the Office of Management and Budget (OMB) said, “If you care are about the federal taxpayer, there is strong evidence we’re undercharging [for natural resources extracted from federal land].”

“The regulations and administrative process that govern the leasing of coal, for example, were put in place in the 1970s and 80s,” he said. “Since then, the whole American energy landscape has changed and we haven’t caught up. Given this backdrop, [Interior] Secretary Jewell announced last week that we’re undertaking a comprehensive review of the federal coal program and pausing new leases. There’s a lack of true competition when we make federal coal leases and that’s a big deal since [the federal government] is responsible for 40% of coal produced in the US.”

The panel, held at the Carnegie Institute for Science in Washington, DC also included: Dan Bucks, former Director of Revenue for the State of Montana; Patrick Rucker, Energy Policy Reporter at Reuters; Nan Swift, Federal Affairs Manager at the National Taxpayers Union; and Ryan Alexander, President of Taxpayers for Common Sense. The discussion was moderated by Danielle Brian, Executive Director of POGO.

“Historically, the federal government has significantly undercharged companies for natural resources extracted on land owned by the American people,” said Brian. “The Government Accountability Office and Interior’s Inspector General have said for years that oil, gas and coal rules are in need of reform. Also, the Interior Department has a history of corruption with managing public resources.”

Bucks said “royalties from public lands are underpaid and undervalued.”

“The real problem is secrecy. The public has no idea what the value is of the [resources] they own. Secrecy has never served the American people well,” he added, citing examples from what he said are 95 years worth of underpaid and undervalued royalties.

According to Alexander, the head of Taxpayers for Common Sense, one of the keys to solving the problem is transparency. She said greater transparency about natural resource revenues is clearly in the public interest.“Who doesn’t have an interest in transparency? The companies who’ve learned to game the system,” she said.

A video recording of the entire discussion will be available soon on