Interior Dept Panel: Further Short-Change Taxpayers

A powerful advisory group stocked with oil, gas and coal company representatives and sympathizers yesterday recommended a suite of fee reductions that would further short-change the public for taxpayer-owned fossil fuels.

The recommendations by the obscurely named Royalty Policy Committee include:

Cutting royalty rates on oil and gas drawn from public waters to the lowest amount legally allowed: from 18.75 % to 12.5%.

We’re talking real money here. For example, in 2011, companies earned $98.6 billion from production on federal leases and paid the federal government $10.5 billion in royalties. In that case, if the Royalty Committee gets its way, the taxpayers would lose $3.5 billion. Although the government is supposed to receive “fair market value” for these publicly owned assets, one analysis found that since 1983 royalties collected from drilling in the Gulf of Mexico dropped 95.7% from $9,067 an acre to $391.

Fast-tracking drilling in the Arctic Wildlife Refuge. The panel called for selling off oil and gas from the fragile ecosystem in 2-3 years, faster than the 4 years Congress dictated in its last budget agreement.

Allowing coal companies to pay the lowest possible royalties for coal mined from taxpayer-owned land. This is rich, considering the federal coal leasing program has short-changed taxpayers more than $30 billion over the last three decades.

The recommendations must be approved by Interior Secretary Ryan Zinke, who appears to be using the handpicked committee and its proposals as ‘stakeholder input’ cover for pushing his oil-gas-and-coal at any cost agenda.

To understand what royalties are, think of them this way: If I allow you to take and sell milk from my cows, then you have to pay me a portion of what you get for that milk.

As some in Congress have pointed out, the Royalty Policy Committee’s recommendations go well beyond their purview. Their charter states the committee is to “provide advice…on the fair market value of and on the collection of revenues derived from, the development of energy and mineral resources on Federal and Indian lands.”

Unfortunately, the recommendations aren’t all that surprising considering they come from a group made up of coal, oil and gas industry execs and allies,  and no public interest organizations.

As Congressman Raúl M. Grijalva of Arizona, the ranking Democrat on the U.S. House Natural Resources Committee noted: “This isn’t about increasing taxpayer returns, it’s about looting public resources, opening up more of everything for drilling, charging the industry less, and pretending it’s all coming from outside experts.”