Restoring Fiscal Responsibility to Oil and Gas Leasing on Our Public Lands

WASHINGTON, D.C. — The National Wildlife Federation commends Senator Tom Udall (D-NM) and Senator Charles Grassley (R-Iowa) for introducing a bill to modernize oil and gas fiscal policies on America’s public lands. The “Fair Returns for Public Lands Act” is a common-sense approach to ensure the oil and gas industry pays its fair share.

“For decades, oil and gas companies have enjoyed an unfair advantage, paying far below market value to lease and develop energy on our public lands. This short changes American taxpayers as it pads the bottom line of oil and gas companies,” said Tracy Stone-Manning, associate vice president for public lands at the National Wildlife Federation. “Our public lands deserve better. This fair and long-overdue legislation brings rates in line with state rates.”

“Taxpayers for Common Sense have concluded that here in New Mexico, taxpayers have lost more than $5 billion dollars in revenue over the past decade because of outdated leasing and royalty rates,” said Jesse Deubel, executive director of the New Mexico Wildlife Federation.  “This bill puts an end to the outrageously low prices that oil and gas companies have been paying for decades.”

The Government Accountability Office has concluded that improved royalty rates could increase federal revenues by $20 -$38 million per year with negligible impacts to production.  The “Fair Returns for Public Lands Act” would increase royalty rates to 18.75% (up from 12.5% and the same as rates for offshore drilling), increase minimum bids from $2 per acre to $10 per acre and raise rental rates from $1.50 per acre to $3 per acre.  According to the GAO, Colorado and Texas have raised state royalty rates in recent years without a significant effect on production on state lands.

The recently released Colorado College Conservation in the West Poll showed strong public support for a legislative fix to update this broken system.  An overwhelming majority (69%) of Western voters said they want royalty rates for oil and gas production on public lands to be increased to 25%, which is well above the increase to 18.75% included in the Senators’ bill. 

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