An adviser to President-elect Donald Trump has now promised that the incoming administration will collect “hundreds of billions of dollars” in revenue by “opening up” federal lands and oceans to oil, gas, and coal development.
But the fact is that vast majority of federal fossil fuel resources are already open to energy companies for mining and drilling. Opening more lands won’t significantly increase revenues, but could put sensitive habitats, human health, and the recreation business at risk.
“We think we can raise significant amounts of revenues for the federal government by opening up more of our federal lands for leases for oil and gas development and coal development,” Stephen Moore, one of Trump’s economic advisers, said in an interview with NPR.
“And the energy companies will actually pay the federal government to be allowed to drill and mine on some of these lands. We’re not talking about environmentally sensitive lands, but lands that just have been taken off the grid. We think we could raise hundreds of billions of dollars over the next 10 years,” he said.
In reality, oil companies recently cut back on drilling because of an oil glut and correspondingly low global prices. Coal companies are failing because of declining demand for their high-pollution product and competition from cheaper and cleaner alternatives.
Both of these industries are already sitting on millions of acres of public lands they are leasing, but not using. The oil and gas industry currently has 36 million acres of public land in leases locked up — but only 35 percent of that is under production. Further, by acreage, oil and gas companies only purchased about half the leases available for sale in 2015 and 2016
In addition, Moore’s statement conflicts with the reality that tens of millions of acres of public lands — the vast majority — are already open for energy development: 90 percent of public lands managed by the Bureau of Land Management (BLM) are open to oil and gas development, while only 10 percent have a focus on conservation, recreation, and other activities. In Utah alone, 12 times more acres of public lands have been leased for oil and gas as have been protected.
To achieve anything near the revenue figures the Trump team is promoting would require opening up all public lands including national parks, forests, wilderness, and wildlife refuges. Many of the lands that Moore describes as “taken off the grid,” are in fact critical wildlife habitat and have high conservation value. Moore’s predicted earnings also say nothing of the costs of unfettered extraction, including the costs of pollution from dirty energy and climate change.
Instead, lifting restrictions on drilling and mining in national parks, wildlife refuges — or off the coasts of California and the Southeast — would likely yield only modest new energy supplies or revenues for the country, while incurring significant costs to wildlife, the $646 billion outdoor recreation industry, and air and water quality.
If the President-elect’s team were interested in creating additional revenue from federal fossil fuels programs, there are ample opportunities for reform that would deliver returns to taxpayers — as well as environmental benefits (which come with their own significant economic benefits).
When coal companies mine on federal lands, for example, they pay an effective royalty rate of 4.9 percent, rather than the 12.5 percent required by law. As a consequence, American taxpayers are being shorted an estimated $1 billion every year. Earlier this year the Obama administration placed a “pause” on new coal leases and began the process of revamping the program to provide a fairer return for taxpayers. Opening up more lands without reforming the system only increase losses to taxpayers.
But continued reform of the federal coal program is unlikely under the new administration. Trump himself has promised that he will enable access to vast reserves of “untapped energy” on federal lands, which he estimates is worth $50 trillion and could provide power for hundreds of years.
Trump’s numbers are unsubstantiated, but scientists have concluded that the vast majority of fossil fuel reserves need to remain unburned to avoid the most catastrophic — both in terms of human life and the economy — outcomes from climate change.