Interior Won’t Admit a “Game Changing” Conservation Program Relies on Oil and Natural Gas Royalties

​During a Senate hearing this week officials from the Biden Administration extolled the conservation benefits from the Great American Outdoors Act (GAOA). However, they failed to acknowledge the program is funded almost entirely by revenues generated from oil and natural gas production on public lands. If they did, they’d risk running afoul of Interior Sec. Deb Haaland, who’s keeping the financial benefits of federal oil and natural gas leasing on the down low while working to eliminate the program.
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​Testifying before the Senate Energy and Natural Resources Subcommittee on National Parks, Shannon Estenoz, the assistant secretary for Fish and Wildlife and Parks, celebrated the achievements possible under GAOA. She said the law combines “an historic financial commitment to conservation and recreation.” Speaking specifically about national parks funding, she called GAOA’s new Legacy Restoration Fund (LRF) “a game changing investment program that is helping us to make meaningful progress on protecting high-priority assets”

Chris French, deputy chief of the National Forest System, praised LRF for helping the Forest Service stabilize and reduce the backlog of deferred maintenance projects that have grown because of a record number of visitors in recent years.
 
Conspicuously absent from both of their remarks was any acknowledgement of the considerable contribution from federal oil and natural gas revenues to GAOA’s $2.8 billion annual funding.
 
“Historic” Investment in Public Lands

In 2020, GAOA established a new National Park and Public Lands Legacy Restoration Fund (LRF) that authorized up to $1.9 billion annually to address the $20 billion maintenance backlog in national parks and other public lands. LRF is funded from 50% of the revenues generated from energy development on public lands, up to $1.9 million annually.
 
While the exact funding source data have not been released by Interior, the relative size of leasing and royalty revenue is the best proxy for LRF contributions. Data from the Office of Natural Resources Revenue (ONRR) for 2021 breakdown as follows:

• Oil and natural gas $4 billion (91.3%)
• Coal $364 million (8.2%)
• Geothermal $18 million (0.4%)
• Wind $5 million (0.1%).

 
GAOA also fully funds the popular Land and Water Conservation Fund (LWCF) at $900 million annually, which derives revenues exclusively from offshore oil and natural gas.
 
Interior’s Contradictory Comments
 
The comments by Estenoz and French illustrate the ongoing contradiction we hear from Sec. Haaland and other agency leaders. Interior officials are quick to promote the conservation projects oil and natural gas revenues fund, but they fail to give credit where it’s due.
 
For example, in April 2021 when Interior announced the first-ever allocation of conservation grants under GAOA, the agency’s press release called LRF an “unprecedented investment” that will “support an estimated 18,851 jobs and contribute $2 billion to the nation’s gross domestic product in 2021.” Sec. Haaland remarked at the time, “Through the Great American Outdoors Act, we are investing in the American people, and in the future of our public lands and sacred spaces.” The release, however, did not mention any sources of the new conservation funds.
 
In contrast, when speaking about federal oil and natural gas leases that fund GAOA, Sec. Haaland and Interior leaders repeatedly say the American taxpayer isn’t getting a “fair return” from the federal program. They dedicated a major portion of Interior’s long-awaited interim report to the idea, consistently write press releases making the point, and comment about it in Beltway media. The talking point is central to Interior’s justification for proposing several new regulations on federal oil and natural gas development.
 
It's unclear how an estimated 91.3% in public lands conservation funding that’s generated from oil and natural gas revenues isn’t providing the “fair return” Sec. Haaland is seeking, especially when Interior boasts about results that are “game changing” and “historic.”

Historic Conservation Funding at Risk
 
Thankfully, Sen. Steve Daines (R-MT) was willing to say what the hearing witnesses, Sec. Haaland, and other Interior leaders won’t.

During his opening remarks, Sen. Daines stated, “The Legacy Restoration Fund and LWCF are funded almost entirely from oil and natural gas revenues from public lands. The Great American Outdoors Act was successful because it took the revenue generated from public lands and waters from oil and gas development and reinvested back into conserving and restoring these same public lands.”

Sen. Daines’ also astutely pointed to the long-term threat to conservation funding posed by President’s Biden’s policies, including the ongoing ban on new federal oil and natural gas leases. Looking ahead, Interior officials should heed the senator’s warning that “the administration is threatening the funding for this important program.”

“Just yesterday, the administration could not commit to holding a lease sale in Montana despite a federal judge requiring them to do so over seven months ago,” Sen. Daines explained. “Lease sales alone generate millions of dollars in bonus bids and rentals each year. That money is split between local communities and the Treasury and is having a real, meaningful impact on states like Montana and the money is available for conservation.
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“I’m concerned and disappointed in the administration’s anti-energy policies and urge the Department of the Interior to resume leasing so these programs can continue long into the future,” Sen. Daines concluded.

Author

Aaron Johnson, Vice President of Public Affairs