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Transparency on Oil, Gas, Coal Revenues Moving Forward

The United States came one step closer to greater natural resources revenue transparency last week when representatives from industry, government, and civil society came together for the second time at the Department of the Interior.

On the table for the May 1 and 2 meetings was which natural resources, types of lands, and revenues will be subject to heightened accountability standards under the Extractive Industries Transparency Initiative (EITI), a voluntary, global effort the United States joined this year.

Oil, gas, and coal royalties on federal lands are in. Hardrock minerals (such as uranium and gold), saleable minerals (such as gravel and sand), renewable energies (such as solar and wind), and forestry are still up for discussion. Also in limbo are state, tribal, and private lands, as well as various payments, such as rents and property taxes.

The decisions were made by a committee—featuring representatives from industry, government and civil society—that is tasked with establishing the scope of EITI in the United States (USEITI). Rhea Suh, the assistant secretary for policy, management and budget at Interior, is leading this effort on behalf of the U.S. government. Danielle Brian, executive director of the Project On Government Oversight, and Veronika Kohler of the National Mining Association are, respectively, the committee’s civil society and industry co-chairs.

Interior’s Office of Natural Resources Revenue (ONRR) already collects much of the data the committee decided to include in USEITI scope last week. However, Interior’s oversight of these programs has been plagued by controversy and mismanagement for years. By including oil, gas, and coal royalties on federal lands in the USEITI’s scope, Interior—and industry—will be held to a higher standard by an international community of transparency advocates.

Ultimately, industry and the government will be responsible for regularly disclosing detailed information about the resources, lands, and revenues the committee decides fall under the scope of USEITI. A third party auditor will review and reconcile this data to ensure that U.S. taxpayers are getting their fair share of revenues from resources that are extracted from U.S. lands.

Central to EITI’s mission and the effectiveness of the U.S. effort to implement this initiative is public involvement. Prior to last week’s meetings, POGO asked our readers for their questions and comments about USEITI, only to learn that many members of the public are unaware that the extractives industries pay the U.S. government to drill and mine on public lands. Last year, these companies paid almost $12 billion to Interior, and the Department divided this money among the U.S. Treasury, state and tribal governments, and various federal environmental funds.

Interior noted in its fiscal year 2014 budget request that USEITI “helps ensure the full and fair return to the American people” from public resources. And Interior’s Suh said at the meeting, “Revenue transparency is a fundamental tenet of economic growth.”

This is exactly the reason your input on this process is so crucial. The next USEITI meeting isn’t until next month, but you can send your questions and comments to POGO’s Danielle Brian any time by emailing her at [email protected].