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Publications

Viewing all publications in Natural Resources
  • Mineral Royalties
    Academic Article/Working Paper

    Mineral Royalties

    Historical Uses and Justifications

    By Jayni Foley Hein and Caroline Cecot
    February 28, 2018

    Governments and private landowners have collected royalties on mineral resources for centuries. When comprehensive measures to account for the environmental externalities of mineral extraction are politically or practically unavailable, federal and state governments may consider adjusting royalty rates as an expedient way to account for these externalities and benefit society. One key policy question that has not received attention, however, is whether a royalty rate can and should be manipulated in this way, assuming statutory discretion to do so.

    This article, published in the Duke Environmental Law & Policy Forum, fills that gap by evaluating the argument for increasing federal or state fossil fuel royalty rates through historical, theoretical, and practical lenses. To that end, this article in turn considers the meaning of royalties, the economic justifications for royalties, the legislative history of the implementation of federal royalties, and the considerations that private landowners have relied upon in setting royalties. This article concludes that it would be appropriate for governments to adjust mineral royalty rates to account for negative externalities not otherwise addressed by regulation or to otherwise promote public welfare. Such use of royalties is consistent with the historical record. Royalties have been used as pragmatic policy tools from almost their inception, and federal and state governments have often exercised their existing statutory discretion to adjust mineral royalty rates to promote public welfare.

  • Muddying the Waters
    Report

    Muddying the Waters

    How the Trump administration is obscuring the value of wetlands protection from the Clean Water Rule

    By Jason Schwartz and Jeffrey Shrader
    September 28, 2017

    In 2015, the Environmental Protection Agency and Army Corps of Engineers revised the definition of the “waters of the United States” as part of the Clean Water Rule. This revised definition was expected to increase the wetland area subject to protection under the Clean Water Act, and an economic analysis conducted by the agencies at the time showed that the benefits of the rule would substantially outweigh the costs. Under the Trump administration, the agencies now propose to repeal the 2015 Clean Water Rule and have issued a revised economic analysis in support of that decision. In the new analysis, the agencies now claim that the majority of the benefits in the 2015 analysis cannot be quantified, making it appear that the Clean Water Rule is not cost-benefit justified. The agencies have violated many of their own requirements for conducting economic analysis to arrive at this conclusion, and a more comprehensive assessment of the evidence shows that the 2015 Clean Water Rule is still cost-benefit justified. Repealing the 2015 Rule would forgo substantial environmental and economic benefits.

  • Coal Royalties
    Report

    Coal Royalties

    Historical Uses and Justifications

    By Jayni Foley Hein and Caroline Cecot
    September 26, 2016

    Royalties have been used as a policy lever to influence behavior and meet national goals for centuries. For example, royalties have been set at specific rates in order to: encourage resource production; encourage westward expansion; maintain the incentive to create new inventions; and deter socially undesirable behavior, to name just a few. This report concludes that it would be reasonable for Interior to adjust coal royalty rates to account for negative externalities that are not otherwise addressed by regulation. Historical uses, accepted economic justifications, legislative history, and examples of royalty use by private actors and in other industries discussed in the paper all support the determination that it would be reasonable for Interior to increase coal royalty rates to account for externality costs and to better align the federal coal program with national climate change priorities.

  • Self-Bonding in an Era of Coal Bankruptcy
    Report

    Self-Bonding in an Era of Coal Bankruptcy

    Recommendations for Reform

    By Jayni Foley Hein, Ben Snow, Sean Stefanik, and Lauren Webb
    August 3, 2016

    Federal law requires coal companies to reclaim and restore land and water resources that have been degraded by mining. But at many sites, reclamation occurs slowly, if it all. Mining companies are required to post performance bonds to ensure the successful completion of reclamation efforts should they become insolvent, but regulators have discretion to accept “self-bonds,” which allow many companies to operate without posting any surety or collateral. As the coal industry experiences financial distress and coal companies declare bankruptcy, the viability of future reclamation work is endangered. This report offers recommendations to help regulators better assess coal companies’ financial health and take steps to curtail self-bonding.

  • Next Steps to Reform the Regulations Governing Offshore Oil and Gas Planning and Leasing
    Academic Article/Working Paper

    Next Steps to Reform the Regulations Governing Offshore Oil and Gas Planning and Leasing

    By Andrew Hartsig, Michael Levine, Jayni Foley Hein, and Jason Schwartz,
    June 22, 2016

    In this Article, we argue that fundamental reform is necessary and highlight a series of key themes and topics that must be addressed to improve the regulatory process and promote better, more consistent management outcomes. While the Article draws on examples from frontier areas-in particular the U.S. Arctic Ocean-the recommended changes would apply to and benefit all areas of the OCS.