Bad Watchdog Season 2 launches June 20.


Transparency Efforts Expand in Public Natural Resource Management

This is the fourth in a series looking at the five most significant natural resource reforms made during the Obama administration and the five reforms the next administration needs to tackle.

If public lands are owned by the American people, shouldn’t taxpayers get their fair return on gas, oil, and minerals that private companies pull out of that ground and sell on global markets?

That’s the premise of the Project On Government Oversight’s work on holding the government accountable for the way it does business with companies that extract natural resources from public lands. Over the past eight years, the Obama administration has made some welcome progress on getting taxpayers more bang for the buck from natural resources, but there is still a long way to go.

Let’s look at one reform that was achieved in the past eight years and one that still needs to be made.

VICTORY: United States joins Extractive Industries Transparency Initiative (EITI)

As part of the U.S. National Action Plan for the Open Government Partnership, the President committed the United States to joining the EITI in 2011. The EITI is an international reporting standard that promotes greater transparency and accountability from companies that extract natural resources and from governments that collect royalties for their citizens.

For the United States, joining EITI is a pledge to increase transparency in the oil, gas, and mining industries through the collaboration of government, industry, and civil society. POGO Executive Director Danielle Brian has co-chaired the civil society sector since 2013, working to ensure that taxpayers receive a fair return for the natural resources extracted from public lands.

The United States released its first EITI report in 2015. The report is available online and includes downloadable and interactive data that allows taxpayers to follow the money.

THE FIGHT GOES ON: Be more transparent about lost natural gas

When companies extract oil and gas from federal lands, they lose millions of dollars in potential federal royalties every year from venting and flaring (burning) natural gas, as well as from unintentional gas leaks. Companies pay no royalties on these lost resources, and while a proposed rule from the Bureau of Land Management (BLM) requires companies to estimate or to measure lost natural gas after a set minimum amount, there is no centralized location where taxpayers can find data on how much natural gas is lost. The Government Accountability Office stated in a July 2016 report that the Department of the Interior “does not provide specific instructions on how to estimate natural gas emissions, which results in operators using varying estimation methods that may be difficult to verify.”

Given that the lost natural gas is a public resource, the BLM should take steps to minimize venting and flaring and to publicize aggregate data on lost natural gas. POGO and Taxpayers for Common Sense (TCS) wrote to Interior Secretary Sally Jewell about increasing transparency and oversight of this public resource, recommending monthly field data collection of lost natural gas. In their recent report, TCS calculated that the reported natural gas lost by oil and gas companies had a market value of more than $878 million between 2006 and 2015.

The BLM also should set up an online database allowing the public to view monthly aggregated data on lost natural gas, the same way it shares aggregate data for sale volumes, sales amounts, and royalties reported by federal lease holders.

Upcoming: The 2010 Dodd-Frank Act required companies to disclose natural resource payments, but companies should also be required to clean up after themselves.