Protect Taxpayers from Millions in Lost Royalty Revenue: Vote No on H.J.Res.36

Letter to the HillProtect Taxpayers from Millions in Lost Royalty Revenue: Vote No on H.J.Res.36

Energy & Natural Resources  | Quick Takes
May 10, 2017  | 3 min read

Dear Senator,

The Senate will soon consider H.J.Res.36, a resolution of disapproval under the Congressional Review Act (CRA) for the Bureau of Land Management (BLM) Methane Waste Rule. We urge you to protect taxpayers and VOTE NO on H.J.Res.36.

The BLM is the only agency that has authority to charge royalties on lost methane gas. If the rule is thrown out under the CRA, Department of the Interior actions to collect royalties and stop methane waste will – at best – be thrown into a legal morass, and could be stopped entirely. In the meantime, taxpayers will lose millions of dollars in royalties from natural gas wasted during drilling on federal lands. Instead we urge you to work with the Trump Administration and Secretary Zinke, who is already reviewing the rule, to make any changes.

Repeal under the CRA will lock taxpayers into the decades-old rules that have been completely ineffective at getting taxpayers the royalties we are due. Because the CRA prevents any subsequent rule “similar in substance,” a congressional repeal will mean the continuation of increasing losses of natural gas from federal lands. In 2014 alone, $444 million worth of natural gas was vented or flared from federal and tribal lands.

This leaked, vented, or flared gas represents a significant loss of royalty revenue from development of a taxpayer-owned resource. The royalty value of the gas currently being vented or flared is roughly $50 million a year, an amount that will likely increase as production continues to grow and natural gas prices increase from their historic lows.

The old rule from 1979, known as the Notice to Federal Lessees (NTL-4a), is outdated, vague, and has allowed for gross inconsistencies in royalty collection. A Taxpayers for Common Sense analysis of government data reported by the oil and gas industry found that the industry did not pay royalties on more than 90 percent of all gas lost in the past decade.

The problem of increasing losses of natural gas on federal lands needs to be addressed, and only the BLM has the authority to manage these natural resources and charge royalties on them on behalf of taxpayers. If the Senate votes to repeal the methane waste rule, it will make this problem worse and cost taxpayers millions of dollars in lost revenue. Again, we urge you to VOTE NO on H.J.Res.36.

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Sincerely,

Ryan Alexander
President
Taxpayers for Common Sense