Autumn Hanna, vice president of Taxpayers for Common Sense had the following statement on the introduction of the Ending Taxpayer Welfare for Oil and Gas Companies Act of 2021:
“We applaud Representative Katie Porter (D-CA) for introducing the Ending Taxpayer Welfare for Oil and Gas Companies Act of 2021. It’s well past time to get our country’s federal oil and gas programs in order.
The oil and gas leasing system has been broken for more than a century and it is high time taxpayers receive a fair return on the oil and gas resources we all own. From 100-year-old royalty rates to Reagan-era rental and minimum bid rates, these fiscal policies governing oil and gas leasing and production on federal lands desperately need to be brought into the 21st century.
Our analysis found that from 2011 to 2020 taxpayers lost $12.2 billion from century old royalty rates and from 2009-2019, over $30 million in outdated rental rates. And in 2019 and 2020 alone, 660,000 acres of federal land were leased for minimum bid amount of $2 per acre. Had the rate of $5 per acre been used, taxpayers could have gotten $2 million in additional revenue.
Rep. Porter’s bill would increase the federal onshore oil and gas royalty rate from 12.5 percent to 18.75 percent – in line with the federal rate for offshore drilling – and correct the rental rates for the effect of inflation. The bill would also raise the minimum bid amount from $2 per acre to $5 per acre and requires the Secretary of the Interior to adjust the minimum bid and rental rate to inflation every four years.
Rep. Porter’s reforms will generate millions of dollars in much needed taxpayer revenue. For more information on federal oil and gas leasing system and why it needs reform, visit our page on leasing reform or this fact sheet.