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A pair of U.S. Senators has introduced legislation to increase royalty rates for oil and gas production on public lands by 50 percent. New Mexico Senator Tom Udall and Iowa Senator Chuck Grassley announced their intent in an opinion piece in the New York Times earlier this week, calling attention to the fact that current royalty rates have barely budged in the last hundred years, resulting in an "outrageous giveaway" to Big Oil, as Grassley says.
According to the Congressional Budget Office, the proposed increase would raise $200 million in federal revenue over the next 10 years as it is phased in, with an equivalent amount going to the states where the oil or gas is being extracted. Many states already collect a much higher royalty rate for extractive activities—the current federal royalty rate of 12.5 percent is half what it is in Texas.
Grassley and Udall said in their op-ed, “As senators from different parties, we have our share of policy differences. In this case, we agree that oil and gas companies should pay fair market value for the public resources they extract and sell. They aren’t doing that now — not even close — and the American public is the big loser.”
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Our wild areas are not assets to be exploited by a single generation — they are assets that need to be preserved and managed for future generations as well. Putting the politics of the moment into play is a formula for long-term disaster.”
