Public getting raw deal on royalties

Op-EdPublic getting raw deal on royalties

Energy & Natural Resources  | Quick Takes
Oct 23, 2017  | By  | 3 min read

Last week, I was offered the opportunity to present public comments to the Department of the Interior regarding the newly re-established Royalty Policy Committee.

What I witnessed at that meeting was troubling. Every New Mexican should be concerned that on a committee of 38 people, tasked with ensuring that taxpayers are getting their fair return from drilling on our public lands, there is not one person from a public interest group representing the federal taxpayer. In fact, most of the committee consists of officials from energy industries that are at the table to protect their own special interest. The truth is that for too long, taxpayers in New Mexico have lost billions of dollars in revenue because of an outdated system that benefits industry instead of everyday Americans.

For decades, industry has been picking up land for pennies on the dollar, thanks to outdated Bureau of Land Management rental and royalty rates that allow oil and gas companies to rent federal lands at $1.50 per acre and pay outdated royalties that are far lower than many western states, including New Mexico, charge. These rates date back to 1920 in some cases, and have not been adjusted for inflation. American taxpayers are losing out on millions of dollars in revenue each year because of these outdated policies that favor the oil and gas industry’s bottom line over the best interest of the American people.

On top of receiving cut-rate prices on oil and gas leases, industry has been stockpiling leases without taking the next step and developing on these lands. A new report released by Taxpayers for Common Sense on Oct. 3 titled “Locked Up” outlines how oil and gas companies are sitting on millions of acres of idle public lands, therefore preventing taxpayers in New Mexico from receiving revenues from other activities on these lands. In New Mexico alone there are nearly 110,000 acres of federal lands that were leased for less than $10 an acre, or are otherwise considered speculative, and are not being developed.

In their first meeting, the members of the Royalty Policy Committee were told they were to consider themselves the “executives” of energy production leading the way toward achieving American energy dominance, instead of fiduciaries for American taxpayers, as the committee’s charter indicates. Despite all of this, the committee has an opportunity to change course, put taxpayers first, and advance our royalty system into the 21st century. Taxpayers in New Mexico and local communities have been denied a fair return on the resource they own for too long.

An Early Christmas Gift to Oil, Gas, and Coal Companies

We hope that the new committee will recognize how the current system is in dire need of reform and takes steps to ensure that New Mexicans are receiving the money they deserve when industry drills, mines and produces on our public lands.

Originally published on November 9, 2017 in Albuquerque Journal