Sens. Chuck Grassley (R-Iowa) and Jacky Rosen (D-Nev.) introduced the
bipartisan Fair Returns for Public Lands Act, legislation to update the
nation’s outdated public lands royalty system and ensure that taxpayers and
rural communities get fair returns on leases of public lands for oil and gas
Oil continues to take advantage of low royalty rates on federal lands. Congress
has not addressed this issue for over 100 years and since then, these oil
companies have deprived the treasury and the American people of billions of
dollars. This is not right. It’s time for my colleagues in Congress to end this
oil company loophole, end the corporate welfare and bring oil leasing into the
21st century,” Grassley said.
current federal oil and gas program is broken, and fails to protect our public
lands and the American people,” Rosen said. “I’m introducing this
bipartisan, common-sense legislation that will require oil and gas companies to
pay increased royalties for drilling, ensuring that our state and local
governments in Nevada and across the nation receive fair compensation to fund
critical education, infrastructure, and public health projects.”
one hundred years ago, Congress passed the Mineral
Leasing Act of 1920, setting up a system in which companies could lease
public lands to wrest valuable oil and gas from the ground. In the century
since, the royalties and rent that those corporations pay to the American
people for access have remained essentially unchanged even as the scale of development
and profits has grown.
Fair Returns for Public Lands Act
would set a uniform federal royalty at
18.75 percent, applied to new oil and gas leases. The Congressional Budget Office estimated
that this royalty
would raise $200 million in federal revenue over the next 10 years, with an
equivalent amount returned to the states where the oil or gas is being
extracted. Reductions in production would be small or even negligible over that
period. This bill will also increase the rates for reinstated oil and gas
leases, which will discourage oil and gas developers from holding onto leases
on public lands they do not intend to actually explore or develop.
the Fair Returns for Public Lands Act would:
Increase the royalty rate for oil and gas leases, from 12.5
percent to 18.75 percent.
Increase the rental rate for oil and gas leases, from $1.50 per
acre for the first five years and $2.00 per acre for the remainder of the
lease, to $3.00 per acre for the first five years and $5.00 per acre for the
Increase the national minimum bid for oil and gas
from $2.00 per acre to $10.00 per acre, with discretion for the Secretary of
the Interior to set a higher minimum bid for individual lease sales or lease
parcels as needed.
Increase the rental and royalty rates for reinstated
for oil and gas leases, by establishing a rental rate of $20 per acre and a
royalty rate of 25 percent that applies uniformly to all reinstated leases.
Establish a fee for expressions of interest, by requiring parties
who wish to nominate public lands for oil and gas leasing to pay a fee
sufficient to reimburse administrative costs of at least $15 per acre.
Require regular adjustments, by directing the
Secretary of the Interior to adjust these rates for inflation at least every
four years, or earlier if necessary to enhance financial returns or promote
more efficient management of oil and gas resources.
Require a study, which must be completed in 3 to 5 years
and will evaluate the efficacy of the Interior Department’s implementation of