Home Gas effect Ending Big Oil’s Public Land Scam

Ending Big Oil’s Public Land Scam

0

Colorado’s public lands are part of what makes our state a special place to live and why so many visitors come here from around the world. Unfortunately, the oil and gas industry exploits our public lands using outdated lease rules to reap profits using a buy low, sell high business model at the expense of everyday Coloradans.

The federal onshore royalty rate — the amount companies are required to pay for the resources they extract from our public lands when they drill — was put in place more than 100 years ago. According to a new report from budget watchdog group Taxpayers for Common Sense, this stagnant rate, set at a minimum of 12.5%, has led our state to lose up to $371 million in revenue from oil and gas produced on federal lands of Colorado from 2012 to 2021. , we all missed up to $13.1 billion during that time.

Get morning headlines delivered to your inbox

If the Department of the Interior had updated its outdated royalty rate to 18.75%, which is more in line with the rates that many states, including Colorado, charge for resource extraction on land in the state, our communities would not have lost essential income to fund schools. , health care and infrastructure projects.

The Department recently announced that it would resume leasing oil and gas on federal lands and that any leases sold in future sales will require a royalty rate of 18.75%. The people of Colorado deserve at least that for the use of our public lands, and the increased rate will not hamper industry interest as it still lags behind our 20% state rate. .

That’s why the increase in the federal royalty rate required for leases sold on Colorado’s public lands this month should be made permanent.

Congress and the Department of the Interior now have the opportunity to protect taxpayers from the greed of these oil CEOs by fixing the outdated system that subsidizes the oil and gas industry.

Raising the rate oil and gas companies must pay to drill on our public lands will ensure that Coloradons receive a greater share when oil companies extract our public resources. These companies have posted huge profits over the past year, while we have been losing. Raising the royalty rate for oil and gas development on our public lands will ensure that the oil and gas industry is not the only one to benefit from the next boom.

While making record profits, oil and gas CEOs will falsely claim that this change will end up costing you at the pump. But raising the onshore federal royalty rate would increase taxpayer revenue without having any impact on retail gasoline prices. We can examine our own state oil and gas policies to understand why: The Colorado State Land Board increased its royalty rate for new oil and gas leases on state lands first by 12.5% to 16.67% in 2011, then to 20% in 2016. , and there was no noticeable decrease in the desire for state leases or reduced production since.

Additionally, the Independent Congressional Budget Office found that increasing the onshore royalty rate to 18.75% would generate approximately $400 million in the first decade, while the effect on oil and gas production gas on federal lands would be “negligible”.

Congress and the Department of the Interior now have the opportunity to protect taxpayers from the greed of these oil CEOs by fixing the outdated system that subsidizes the oil and gas industry, including permanently raising the federal royalty rate. Modernizing the royalty rate will have little to no effect on oil and gas production and Coloradans will finally receive a fairer share of the revenue from drilling on public lands that we all benefit from.