Investing in American communities and natural resources

The Senate Committee on Energy and Natural Resources (SENR) has a busy couple of weeks planned with two scheduled hearings related to accessing our nation’s rich natural gas and oil resources, and investing the resulting revenue back into our communities, national parks and natural resources.

We are proud of the fact that royalties from federal natural gas and oil production fund conservation programs in all 50 states. As decisions made in these hearings could decide how well-funded public land conservation and protection programs and services will be in the future, we hope to see great support for continuing the funding flow directly from federal energy revenues to these services that are relied upon by American communities.

Up first is a hearing to examine deferred maintenance needs and potential solutions on federal lands administered by the Department of the Interior and the USDA Forest Service. Included in the discussion is a bill that could serve as a solution, S. 3172, the “Restore Our Parks Act.” The bipartisan measure would create a fund that draws 50 percent of energy leasing revenue – including natural gas, oil, coal and renewables accessed both on- and offshore – and would utilize that revenue to address the maintenance backlog afflicting our National Parks.

Expanded access for natural gas and oil production through increased lease sales and production brings tangible benefits, like newly paved roads, upgraded school buildings, better funded land, and – as with the proposed bill – funds to maintain our nation’s magnificent National Parks. Just this year, New Mexico received more than $970 million during a lease sale – a biproduct of the U.S. energy revolution and the vast technically recoverable resources identified in the Permian Basin, dubbed by the U.S. Geological Survey (USGS) as the “largest continuous oil and gas assessments ever released.”

In addition to 48 percent of lease sale revenue, the state where the lease is receives half of all revenues from the natural gas and oil production royalties paid on the lease. It’s also worth noting that the agency in charge of the sales, the U.S. Bureau of Land Management (BLM), only offers lease sales in areas that have had environmental review performed and a public comment period before leases are made available for exploration and development.

The committee’s second hearing, scheduled for next week, will review the implementation of the Land and Water Conservation Fund (LWCF). Offshore natural gas and oil production is the primary source of revenue for the LWCF, which helps protect and conserve public lands and improve outdoor recreation opportunities. As API Vice President of Upstream and Industry Operations Erik Milito recently pointed out:

“Offshore oil and natural gas revenues flow directly from production, and future production depends upon expanded opportunities for offshore leasing and revenue sharing. Proposals that seek to ban offshore oil and natural gas exploration and development directly attack the primary funding source of future LWCF funding and would serve to increase our reliance on foreign energy sources.”

The permanent reauthorization of the LWCF was signed into law on March 12, 2019, after passing the Senate and House with overwhelming bipartisan majorities. Energy revenue disbursements are often the second-highest federal revenue generator after taxes, and fund important conservation programs across the nation. Federal offshore revenues that fund LWCF grants are just a portion of the economic benefits to U.S. consumers afforded by offshore natural gas and oil development. 

The petroleum industry has a long history of public-private partnerships aimed at finding cooperative solutions to environmental, educational and community issues. Protecting the environment is a core industry value and this commitment is bolstered by industry investments powering conservation and outdoor recreation from coast to coast. The development of natural gas and oil, both onshore and offshore, allows the U.S. to lead the way – investing resources back in our communities and our environment.

Carrie Domnitch is Senior Director of Federal Relations for API.