The Build Back Better Act: Giving Americans a Fair Return from the Fossil Fuel Industry
Over the past several months, the Biden administration has been working hand in hand with Congress to put together an historic spending plan that will deliver transformative growth for our economy by creating jobs, cutting taxes, and lowering cost for families: The Build Back Better Agenda.
The much-needed investments we’re making as part of the Build Back Better Act will create a stronger, more sustainable economy that will deliver significant returns over time. But even so, some still want to know: How are we paying for these investments right now?
Fortunately, the House Natural Resources Committee has several answers to that question. Within the Committee’s jurisdiction, there are several ways in which the U.S. government can raise billions of dollars to pay for these investments while also moving us toward a cleaner energy future.
This Thursday, Sept. 2, at 10:00 a.m. Eastern time, the House Natural Resources Committee will hold a markup on the portion of Build Back Better Act that falls under the Committee’s jurisdiction. At the markup, the Committee will decide on provisions in the bill that will raise revenue and protect American taxpayers from unnecessary industry subsidies and giveaways.
Revenue Raiser #1: American taxpayers will get a fair return from fossil fuel companies that drill and mine on our public lands and oceans.
The Natural Resources Committee oversees the federal agencies at the Department of the Interior (DOI) that steward our nation’s public lands, waters and oceans. One of the major challenges for these agencies is handling the extraction and production of energy resources by the fossil fuel industry that happens on our public lands and waters. This includes managing all of the leases and royalty payments for these resources.
Over the past two decades, the nonpartisan U.S. Government Accountability Office and other watchdog organizations have documented many shortcomings in how these agencies manage the extraction and production of fossil fuels — oil, gas, and coal — on federal lands.
For far too long, outdated laws and regulations have harmed taxpayers while allowing the fossil fuel industry to take advantage of massive government giveaways in the form of rock-bottom royalty rates, limited fees, and easy access to public lands and waters.
The fossil fuel industry is taking advantage of subsidies and giveaways that cost American taxpayers billions in lost potential revenues each year. The Build Back Better plan changes this by:
- Increasing outdated royalty rates and extending royalties to methane emissions
- Ending noncompetitive leasing and charging annual fees for the extraction of public resources
- Strengthening bonding standards and charging fees on offshore pipelines and idled oil and gas wells; and
- Eliminating royalty relief and requiring companies pay for annual inspection costs.
With these changes, the Build Back Better plan could protect taxpayers and raise billions of dollars over the next decade.
Revenue Raiser #2: American taxpayers will stop giving away money to the heavily polluting hardrock mining industry.
Hardrock minerals are things like copper, gold, and silver. The law governing how these materials are mined on public lands is nearly 150 years old. The law is so old that huge, multinational mining companies that dominate this industry aren’t required to pay federal public royalties or pay to clean up abandoned mine lands. Not even the oil, gas, or coal industries have this kind of arrangement.
These massive loopholes and subsidies for the mining industry mean that the full cost of cleaning up industry’s mess falls on the American people. There are approximately half a million abandoned hardrock mines across just 12 Western states that need cleanup. Making matters worse, hardrock mines that are Superfund sites are the most expensive Superfund sites to clean up, costing an average of $750,000 per site annually.
Our economy is not benefiting from the way the hardrock mining industry uses our public lands to make its profits. The Build Back Better plan changes this by:
- Establishing a hardrock mineral royalty, which could raise around $2 billion over 10 years
- Establishing a reclamation fee for abandoned mining lands, which could raise around $200 million over 10 years
- Increasing the annual claim maintenance fee, which could raise nearly $600 million over ten years
With these changes, the Build Back Better plan could raise nearly $3 billion over the next ten years.
Revenue Raiser #3: Americans will finally reap the benefits of expanding sustainable, carbon-free offshore wind energy.
Offshore wind holds potential to bring in significant revenue for the U.S. government. It’s a largely untapped source of sustainable, carbon-free energy for Americans. From the only seven competitive offshore wind lease sales that have been held on the Outer Continental Shelf to date, DOI raised $473 million in bonus bids.
Despite the fact that offshore wind is viable on nearly every single coastline of the United States, DOI is arbitrarily prohibited from offering offshore wind lease sales in certain areas well suited for wind energy, holding back the potential for a clean, sustainable source of revenue. The Build Back Better plan changes this by:
- Directing DOI to hold offshore wind lease sales in federal waters around American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands
- Restoring DOI’s authority to hold offshore wind lease sales in federal waters in the Eastern Gulf of Mexico and off the coasts of North Carolina, South Carolina, Georgia, and Florida
Making these revenue-raising provisions part of the Build Back Better plan will make sure polluting industries are paying their fair share into our economy so we can have the financial resources we need to create jobs, cut taxes, and lower costs for working families. This is a big part of our push forward into a stronger, more sustainable economy.
