One of my favorite places of refuge during the COVID-19 pandemic is a lovely wooded path near my Metro Detroit home. According to a plaque situated at the entrance, the path was funded by the federal Land and Water Conservation Fund.
That Fund was created with broad political support in 1965, drawing revenue from royalties placed on offshore oil and gas production. Some funds could be spent directly by the federal government to acquire land or water bodies for conservation. Other revenues were allocated to states, which could use them to preserve parks, forests, recreation areas, and cultural sites. This particular trail was supported through a federal grant to the Michigan Department of Natural Resources.
The money from this Fund has continued to flow–but with an uneven pace that periodically slows to a trickle, reflecting long-standing partisan divides. That is why the recent Senate passage of the Great American Outdoors Act–buoyed with overwhelming bipartisan support–is a remarkable achievement in these hyper-partisan times.
The legislation, which has since moved to the House, would approve permanent annual funding of $900 million without appropriations review. Revenue would be divided between federal and state governments, and also create a five-year fund to begin addressing the maintenance backlog in national parks. It would build on 2019 legislation named in honor of Michigan’s legendary congressman and conservation champion John Dingell, which established a permanent program reauthorization rather than leave it vulnerable to ongoing fluctuations and uncertainties.
This might well seem a political no-brainer, taking funds from drilling royalties and allocating substantial funds into visible parks and recreation areas. The very solution now before the House has long been evident and yet defied Congresses for decades, including multiple near-misses in the 1990s. As Colorado Republican Senator Cory Gardner, one of the architects of the Senate bill, has noted: “sometimes Washington, D.C., is the only place in the world where the more people agree on something, the less likely it is to happen.”
This Senate bill hardly constitutes a Profile in Courage moment. Yet we mustn’t underestimate the challenges involved in securing 75 supportive votes. Individual senators had to swallow hard to accept an allocation formula that might not be ideal for their state while relinquishing control over setting annual appropriations. They also had to agree to actually spend accumulated funds (exceeding $21 billion in 2018) rather than squirreling them away to make the federal deficit appear smaller.
Three significant factors converged to seal the deal, perhaps offering lessons for other policy areas:
Broad Revenue Distribution Works. Every state and congressional district receives some share of Land and Water Conservation Fund revenues, and 98 percent of all counties have been beneficiaries. Rather than concentrating revenue on the small set of states that border oil and gas production, or toward established national parks in Western states, this funding has broad distribution–even reaching my small Midwestern city of Plymouth. Benefits are highly visible and enduring, producing clear performance measures.
Workhorses Can Still Make a Difference. Building a broad coalition takes patience and particularly in-depth knowledge of policy particulars, especially when working across partisan and regional divides. Gardner drew on decades of accumulated LWCF knowledge that began with his project as a legislative assistant nearly 20 years ago to secure funds for a Colorado park. This broad understanding was supplemented with careful framing of how each colleague’s state might benefit from providing support, whether from a particular park, lake, or historic site. This experience suggests congressional workhorses still exist and can, at times, make a difference–even in the 2020s. And Gardner clearly hopes that his deeds produce a political boost in his uphill re-election bid.
Upstream Revenue Sources Remain Popular. The federal royalty system represents a long-standing charge placed upstream at the point of permanent extraction of non-renewable natural resources such as oil and gas. Rates have fluctuated between 12.5 and 18.75 percent both onshore and offshore. But Congress has never accepted industry pressure to eliminate them. Quite similarly, many state legislatures maintain severance taxes on natural resources once they screw up the political courage to confront extraction industries and adopt them. This durability provides an ongoing flow of revenue that now makes possible a broader political compromise over extended use for conservation.
Senate action is, of course, only the first step. Although the House appears inclined to provide support, this is hardly a done deal. After a dramatic presentation from Gardner and colleagues, President Trump said that he would sign such a bill–despite his proposed budget that would virtually eliminate the LWCF.
Meanwhile, the Interior Department appears to be expanding royalty relief from oil and gas producers during the pandemic, and revenues will drop alongside production as prices remain low. Interior has also eschewed Obama-era efforts to include wasted methane releases in royalty calculations, even as recent research finds Gulf of Mexico flaring rates greatly exceed reported levels. In turn, the very existence of the royalty-to-fund system raises the question of what happens once oil and gas production declines permanently and revenue erodes–just as offshore wind emerges as an increasingly viable and environmentally attractive alternative energy source. Permanent appropriation approval will not fix these enduring problems.
Nonetheless, the LWCF case offers some insights into how to link a fee or tax on resource extraction and eventual use with the provision of a broad public benefit. There are clear parallels here with how governments in the United States and beyond have begun to link some form of carbon pricing with financial support for various forms of energy transition. A case in point is Virginia’s recent entry into the Regional Greenhouse Gas Initiative cap-and-trade system with ten other states. Related legislation outlines plans to allocate auction revenues into designated funds for shoreline resiliency, energy efficiency support, renewable energy deployment, agricultural innovation, and a just transition for fossil fuel sector workers. Much like the LWCF, this funding plan recognizes that different parts of the Commonwealth face different challenges in mitigating and adapting to climate change and allocating carbon price revenue accordingly.
Unlike the LWCF experience, the Virginia legislation passed on a purely partisan basis, reliant on unified Democratic votes. Any future federal carbon pricing strategy–including the broad framework in the far-reaching climate proposal released recently by the House Select Committee on the Climate Crisis–raises the question of whether Republicans are prepared to participate constructively in those discussions, or should instead be assumed to be unalterably opposed.
Since the collapse of federal funding for water treatment systems decades ago, environmental policy has operated primarily without significant funding sources, leaving most implementation costs to states, localities, and the private sector. The LWCF serves as a reminder that funding from an earmarked source linked to fossil fuel extraction can be put to constructive purposes that can build broad political support and accomplish broad policy goals, even when dependent upon Congress.