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Bipartisan Legislation will Bring Fiscal Responsibility to the Oil and Gas Leasing Process

WASHINGTON, D.C. — The Fair Returns for Public Lands Act of 2021 will modernize an outdated federal oil and gas leasing system by ensuring that energy companies pay fair market prices. The bipartisan legislation, sponsored by Senators Charles Grassley (R-Iowa) and Jacky Rosen (D-Nev.), will raise royalty and rental rates to bring them in line with state rates, generating more money for struggling communities.

“The common-sense proposals in the Fair Returns for Public Lands Act will modernize leasing rates that haven’t changed in four decades and update royalty rates which haven’t changed in 100 years. It’s long past time to make sure that Americans are getting a fair deal when their public lands are leased for energy development. This bill will do just that,” said David Willms, senior director of Western wildlife and conservation at the National Wildlife Federation.

“We thank Senator Rosen for joining Senator Grassley in this important bipartisan effort to make sure the federal oil and gas leasing system works for local communities, does not undercut taxpayers, and does not harm wildlife habitat,” said Russell Kuhlman, executive director of the Nevada Wildlife Federation. “It is completely illogical to continue using century-old policies to manage our public lands—policies that have cost Nevada’s communities tens of millions of dollars in revenue over the years. This common-sense fix goes hand in hand with the Biden administration’s commitment to ensuring federal land management works for wildlife and local economies, not just oil and gas companies.”

The Fair Returns for Public Lands Act would increase royalty rates from 12.5 percent to 18.75 percent (making it the same rate as offshore drilling), increase minimum bids from $2 per acre to $10 per acre, and raise rental rates from $1.50 to $3 per acre for the first five years and from $2 to $5 per acre for the remainder of the lease. The Government Accountability Office has concluded that improved royalty rates could increase federal revenues by $20-$38 million per year with negligible impacts on production. 

 

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