ENERGYWIRE | A new analysis predicts taxpayers will reap fewer dollars after the Trump administration slashed the royalty rate for onshore oil and gas production by 25 percent last year.

More than six months after the lower rate went into effect, the nonprofit Taxpayers for Common Sense said it has not caused more industry interest and will cost taxpayers close to half a billion dollars over the coming years.

The watchdog group analyzed 22 lease sales across 11 states held by the Bureau of Land Management last year. More than half of those were held after July 4, when President Donald Trump signed the Republican megalaw that lowered the portion of revenue that oil drillers must pay the government to extract from public land.

"We believe that the 12.5 percent royalty rate will cost taxpayers revenue in the long run, and if leasing continues at a larger scale under these weaker fiscal terms, the taxpayer costs are going to compound," Tyler Work, a policy analyst at the group, said in an interview.

Unlike some environmental groups that object to new oil and gas development altogether, Taxpayers for Common Sense says it does not oppose new drilling but wants taxpayers to receive a fair return for the use of public resources.

The group's analysis found that more than 244,000 acres of federal land was leased at the 12.5 percent level last year, which it said could cost taxpayers $489 million in lost revenue over the life of wells produced on those leases.

But Taxpayers for Common Sense and other groups found little evidence that lower royalty rates led to greater interest from companies. The watchdog argued in its analysis that preliminary data from the last three years indicates that royalty rates are not a "deciding factor" in lease sale results.

"It doesn't create new demand, it simply guarantees lower public return where demand already exists," Work said, adding that the federal rates are significantly lower than what state governments charge for production on their land.

"Companies bid based on long-term production economics, not short-term statutory changes in royalty rates," she said.