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Will Interior Secretary Zinke live up to expectation on oil and gas?

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Original Publication: The Hill, July 18, 2017
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July 19, 2017
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As the new Secretary of the Interior, Ryan Zinke is responsible for managing all federal lands and waters along with the development of the resources on and underneath them. 

After only four months, Zinke has not wasted any time issuing 10 secretarial orders, considering more than a dozen rule changes and posting almost 300 notices. But the challenge and opportunity at the Department of Interior is tackling the well-documented shortcomings of our nation’s energy and mineral management programs. For now, the jury is still out on whether these and other actions by Zinke will help fix the agency and get taxpayers the fair return we are due.

When it comes to how the department manages energy and natural resource development on federal lands, evidence of the system’s flaws is almost overwhelming. The Government Accountability Office (GAO), Congress’s investigative arm, has issued dozens of reports on the department’s oil and gas portfolio alone, detailing problems with general oversight of onshore and offshore oil and gas production, production volume verification, liabilities, permit processing, bonding, royalty rates, general revenue, natural gas emissions and more.

In our own analysis of industry-reported data, we found that the amount of natural gas vented or flared on federal lands more than tripled from 2006 to 2015. Of all gas wasted in that time period, moreover, more than 90 percent was not charged a royalty.

The department’s track record has been so precarious that in 2011, the GAO added “Management of Federal Oil and Gas Resources” to its “High Risk List,” which catalogs government programs that are vulnerable to “fraud, waste, abuse and mismanagement, or are most in need of transformation.” After evaluating the department’s progress in addressing the issue, the GAO noted that two 2016 rulemakings – one by the Bureau of Land Management addressing venting and flaring of natural gas, and one by the Office of Natural Resources Revenue addressing oil, gas and coal valuation – would have taken some steps in the right direction.

However, under Zinke, the department has repealed the valuation rule and put the natural gas waste rule on hold, leaving the fate of efforts to reform federal oil and gas management in doubt. The same has been true of the department’s actions regarding the federal coal system, where a comprehensive review of the federal coal program was in process. There are a number of problems with the federal coal program that merited such a review, such as the lack of competition in the leasing process, and the inadequacy of certain bonding requirements, just to name two.

Zinke has voiced support for managing oil, gas, coal and other natural resources with taxpayers in mind. This spring Zinke announced the chartering of a new Royalty Policy Committee to examine how the department can get fair market value for all federal resources. In a written statement, Zinke noted, “It's important that taxpayers get the full value of traditional and renewable energy produced on public lands.”

But whether or not the new committee will lead to concrete proposals to reform energy and natural resource management remains to be seen. The secretary’s words suggest he has the right intention when it comes to getting a fair return for taxpayers, but only time will tell if his intentions lead to meaningful changes. In the meantime, taxpayers await a verdict.

Ryan Alexander is president of Taxpayers for Common Sense. She testifies regularly in Congress on a wide range of topics relating to federal spending, subsidies, and fiscal policy. 

Original Publication URL: http://thehill.com/blogs/pundits-blog/energy-environment/342581-will-interior-secretary-zinke-live-up-to-expectation-on#.WW61MQfKNM8.twitter

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