How Revenue Works
In the U.S., land and the resources beneath it can be owned by private individuals and corporations or by federal, state, local, and Native American governments. This makes the U.S. different from nearly every other country; in many places oil, gas, coal, and other minerals simply belong to the government, but in the U.S. there is widespread private ownership of these resources.
Natural resource extraction in the U.S. is governed by laws and regulations tied primarily to land ownership and the commodities being extracted.
Who owns natural resources in the U.S.?
Private individuals and corporations, as well as federal, state, local, and Native American governments, can own land and the oil, gas, coal, and other minerals found below the surface.
What laws and regulations govern natural resource extraction in the U.S.?
Federal laws and regulations
The legislative branch has passed many laws governing natural resource extraction on federal lands.
The government reforms laws and regulations by enacting new legislation and proposing new rules for implementation.
How are natural resources on Native American land governed?
Ownership and governance
Native American land ownership involves a complex patchwork of titles, restrictions, obligations, statutes, and regulations.
Extracting natural resources on Native American land involves unique processes and multiple stakeholders.
Natural resources are increasingly a key source of income for many Native American tribes. Several organizations within the Department of the Interior have roles and responsibilities in collecting revenue from production on Native American land.
Extraction affects Native American economies in a number of ways, though effects vary widely depending on the level of extraction on and details of lease agreements.
How do natural resources result in federal revenue?
The production process
Oil and gas
Oil and gas (or natural gas) are fossil fuels that form underground on land and under the ocean. The U.S. is among the world's top producers of oil and gas.
Miners extract coal through surface and subsurface mining. Most of the coal produced on federal land in the U.S. is mined in the Powder River Basin of Wyoming.
Gold, copper, and iron are the main sources of nonenergy mineral revenues. The Mining Law of 1872 is the major federal law governing locatable minerals.
Renewable energy resources include geothermal, solar, wind, biomass, and hydrokinetic energy.
Understanding federal revenues
How revenue works
Companies pay the federal government to extract natural resources on federal lands and waters. This revenue is collected by the Office of Natural Resources Revenue, mostly as bonuses, rent, and royalties.
Abandoned Mine Land (AML) Reclamation Program
This program uses fees from present-day coal mining companies to reclaim coal mines abandoned before 1977.
Coal Excise Tax
Coal producers pay a federal excise tax, which originated in 1977 with the Black Lung Revenue Act, when they mine coal in the U.S.
Understanding federal disbursements
How disbursements works
The Office of Natural Resources Revenue collects revenue from natural resources extraction on federal lands and waters and distributes that revenue according to federal law. This process is called "disbursement."
Land and Water Conservation Fund
The Land and Water Conservation Fund receives disbursements from offshore oil and gas revenue to support conservation, outdoor recreation, and the needs of local communities.
National Parks and Public Land Legacy Restoration Fund
To address priority deferred maintenance projects, the National Parks and Public Land Legacy Restoration Fund receives disbursements from federal energy development revenues for five years starting in Fiscal Year (FY) 2021.
Historic Preservation Fund
When authorized, the Historic Preservation Fund receives disbursements from offshore oil and gas revenue to fund the conservation of cultural and historic sites.
The Reclamation Fund receives revenue from onshore natural resources extraction. The fund supports the construction, operation, and maintenance of irrigation and hydropower projects.
Gulf of Mexico Energy Security Act (GOMESA)
The Gulf of Mexico Energy Security Act (GOMESA) created a revenue-sharing model for gulf states. Four states receive a portion of the revenue from oil and gas production in the Gulf of Mexico.
How does the U.S. ensure accuracy and accountability in natural resource revenue?
Audits and assurances
Data about revenue from the extractive industries is subject to a number of controls, standards, and regulations.