Report: Taxpayers Not Getting Fair Share of Fossil Fuels, Hardrock Mining

A worker treats the heavy-metal-laced discharge from the Gold King Mine in a settlement pond prior to its release into Cement Creek.
A worker treats the heavy-metal-laced discharge from the Gold King Mine in a settlement pond prior to its release into Cement Creek.
Eric Vance/EPA

It can often be difficult to assess the true costs of mineral extraction and energy production across the West. Take, for example, the massive blowout  from the much-neglected Gold King Mine earlier this month, which sent three million gallons of metal-laced, toxic water into the Animas River, an orange plume that traveled across four states. The Environmental Protection Agency is still sorting through the supposedly corrective measures its contractors took that triggered the blowout, the convoluted history of rising water and pressure in abandoned mines in the area, and the long-term impacts on the affected rivers and their users. 

Gold King hasn't been a viable mining operation for decades. The folks who extracted gold from that claim, and others like it in southwest Colorado, are long gone. So who gets the bill for these long-deferred (and yet to be determined) costs of post-production maintenance and remediation? We do, of course.

A rigorous accounting of mining and drilling activities across the West would have to include the costs of environmental clean-up. And the impact of methane and other emissions from gas and oil wells on air quality and climate change.  And other "external costs" associated with public health issues and disruption of wildlife habitat. Not an easy set of calculations, certainly, but the folks at the conservation-minded Center for Western Priorities and the Center for American Progress, a nonpartisan but distinctly progressive-leaning think tank, have taken a crack at it. Their new report, Fair Share Scorecard, looks specifically at the costs associated with drilling and mining on public lands and what kind of return American taxpayers are getting for the exploitation of public resources.

Not surprisingly, the report finds that hardrock mining is the worst deal of all. The industry still enjoys the largesse of the 1872 General Mining Law, which allows mining companies to stake claims on public lands for less than five dollars an acre and pay no royalties at all. "Analysts have estimated that taxpayers lose out on at least $100 million annually in royalties on the mining of more than $1 billion worth of hardrock minerals, such as gold, silver, uranium, copper, and iron," the report notes. 

But the scorecard is about more than just bargain-basement royalty deals. The report also looks at whether information about the industry and its operations on public lands is accessible (transparency), other negative impacts to taxpayers (like, say, a blowout at an "abandoned" mine), and whether there is much of a move to reform current working arrangements. Here's the gist:

Report: Taxpayers Not Getting Fair Share of Fossil Fuels, Hardrock Mining

Considering the source, you might think the report would be more bullish on solar and wind farms on public lands. But the federal government is still thrashing out regulations to ensure taxpayers get a fair return, including megawatt capacity fees, similar to royalties on oil and gas production. Secretary of the Interior Sally Jewell has pledged far-reaching reforms in the way the government handles energy leases and royalty collection (a massive headache and source of scandal for many previous Interior chiefs, including Ken Salazar). But the scorecard suggests we still have a long way to go. 


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