Rep. Lowenthal demanding oil companies pay fair share to use public lands

Congressmember Alan Lowenthal (CA-47, Long Beach), a member of the House Natural Resources Committee, is requesting immediate action to modernize oil and gas rental and royalty rates on federal lands, rates that remain below other comparable land owners and which are shortchanging the American public while benefiting petroleum companies, according to a press release issued by his office.
In a letter to the Interior Department cosigned by 42 of his House colleagues, the Congressman urges the Interior Department to update the outdated federal onshore royalty and rental rates for oil and gas, the fees that petroleum companies pay to extract the public’s natural resources.
Petroleum companies operating on federal public lands currently pay the Interior Department 12.5 percent of the value of the oil and gas they produce as a royalty to the taxpayer, a rate which has not been updated in nearly a century.
“The current federal royalty rate is not close to what others charge and needs updating,” Lowenthal said. “Not only is this less than our Western states charge, and what is charged for offshore oil and gas royalties, but it is one of the lowest rates of any country in the world. These lands belong to the public, and this current royalty rate system is neither fair nor equitable for the American taxpayer.”
The Department of Interior’s own studies have estimated that updating onshore royalty rates could increase revenue collections by about $1.25 billion over 10 years.
The Department of the Interior has the ability to administratively change both the royalty and rental rates charged on federal lands.
In addition, rental rates, which petroleum companies pay just to reserve the right to use certain tracts of federal land, have not been raised since the 1980s, and like royalty rates, are exceedingly low.
A new report just released by the Center for Western Priorities titled “A Renters Market: Outdated Oil and Gas Rental Rates Fail Taxpayers,” highlights the Interior Department’s badly outdated rental system in which oil and gas companies pay only $1.50 per acre, per year– basically less than the cost of a cup of coffee per acre– to rent federal public lands.
“A fair return on public lands is not too much for the American public to expect,” Lowenthal said.

Source: Rep. Lowenthal’s office

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