How Revenue Works
Private individuals and corporations as well as the federal, state, and local governments can own the land and the resources beneath it. This makes the U.S. different from nearly every other country. In many places, oil, gas, coal, and other minerals belong to the government. But in the U.S. there is widespread private ownership of these resources.
Learn about the process of natural resource extraction in the U.S. from land ownership to disbursement of revenue. Learn what processes ensure accuracy.
Natural resource extraction in the U.S. is governed by laws and regulations tied primarily to land ownership and the commodities being extracted.
How our data fits together
Ownership
The data on this website is for energy and minerals on federal lands, Native American lands, and the Outer Continental Shelf. Private individuals, corporations, and state and local governments can also buy and own land. Whomever owns the land also owns the oil, gas, coal, and other minerals found below the surface.
Leasing
The Bureau of Ocean Energy Management (BOEM) manages offshore leasing. The Bureau of Land Management (BLM) manages onshore leasing. BOEM and BLM award leases through a competitive bidding process. The Bureau of Indian Affairs (BIA), in consultation with BLM, manages leases on Native American lands.
Production
Once a piece of leased land starts producing a commodity, like oil, the producer generally sells it. Though, the producer may also use it on the lease or disposes of it. The proceeds of selling the commodity are subject to royalties, which result in revenue to the government.
Revenue
ONRR collects revenues for leases, sales, and production and then disburses them. ONRR reports revenue data in an accounting year, which is every sale that is accounted for in a given period regardless of when the sale took place. Company revenue includes revenues by revenue type and commodity by company. This dataset includes revenues for U.S. federal lands and offshore areas.
Disbursements
ONRR distributes the collected revenue. Disbursements are in accordance to federal laws and regulations. Federal agencies, funds, and local governments receive disbursements.
Who owns natural resources in the U.S.?
Ownership
The following entities can own land and the oil, gas, coal, and other minerals found below the surface:
- Private individuals
- Corporations
- Federal, state, local, and Native American governments
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.
Federal reforms
The government reforms laws and regulations by:
- Enacting new legislation
- Proposing new rules for implementation
How are natural resources on Native American land governed?
Ownership and governance
Native American land ownership is complex. It involves a patchwork of titles, restrictions, obligations, statutes, and regulations.
Production
Extracting natural resources on Native American land involves unique processes and multiple stakeholders.
Revenue
Natural resources are a key source of income for many Native American tribes. The Department of the Interior collects revenue from production on Native American land.
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.
Coal
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.
Nonenergy minerals
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
Renewable energy resources include:
- Geothermal
- Solar
- Wind
- Biomass
- Hydrokinetic energy
Understanding federal revenues
How revenue works
Companies pay the federal government to extract natural resources on federal lands and waters. The Office of Natural Resources Revenue collects this revenue. Most revenue are 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 work
The Office of Natural Resources Revenue collects revenue from extraction on federal lands and waters. It then 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. This fund supports conservation, outdoor recreation, and the needs of local communities.
Historic Preservation Fund
When authorized, the Historic Preservation Fund receives disbursements from offshore oil and gas revenue. This funds the conservation of cultural and historic sites.
Reclamation Fund
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.