Publications

This report analyzes the hidden costs of coal production, and suggests updates that the Department of the Interior could make to modernize the federal coal program and earn “fair market value” for taxpayers, as required by law.

Coal mining on federal lands accounts for more than 40 percent of all coal produced in the United States. But outdated policies, longstanding loopholes, and prevalent environmental externalities keep American taxpayers from receiving their fair share of value from federal coal leases.

Leasing federal lands for drilling and mining generates a huge amount of revenue for the United States, but the Department of the Interior, which oversees these leases, uses an antiquated fiscal system that deprives taxpayers of hundreds of millions of dollars. Our report analyzes how the fiscal terms for oil, gas, and coal leases could be modernized to ensure a fair return to the American public.

Methane, the primary component of natural gas, is a potent climate pollutant up to 86 times more powerful than carbon dioxide on a 20-year timeframe. Currently the United States loses at least 1 to 3 percent of its total natural gas production each year when methane is leaked or vented to the atmosphere. Federal regulations could reduce methane emissions by up to 50 percent at little or no net cost, using available technologies.

Consideration of real options is necessary to maximize economic return from non-renewable natural resource extraction. But ecisions over drilling are often framed as a now-or-never choice, so the option to wait (or “real option” value) is improperly treated in administrative processes that determine whether, when, and how offshore oil resources will be tapped.