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One hundred years ago today, President Woodrow Wilson signed the Mineral Leasing Act of 1920 into law, providing a framework for oil and gas companies to lease public lands and compensate taxpayers for the extraction of publicly-owned resources. Through massive lobbying efforts from oil and gas trade associations and corporations to keep the status quo, the law has largely remained intact since then; the latest significant update was in 1987.
The result? Oil and gas companies have taken advantage of a wildly outdated system, snapping up leases on public lands at bargain rates, paying virtually nothing to sit on idle leases, and depriving U.S. taxpayers of billions in royalties thanks to low royalty rates. A comparison of royalty rates by the Center for Western Priorities shows that taxpayers could have received more than $10 billion in royalties over the last five years if higher royalty rates had been in place.
One thing is clear—on the 100th anniversary of the Mineral Leasing Act, the laws governing oil and gas production on our public lands are in desperate need of reform.
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Some companies thought they could file a thousand drilling permits, lock up land and then try to sell it — that formula isn’t working any more.”
