FOR IMMEDIATE RELEASE
SEPTEMBER 10, 2015
DENVER—A new analysis from the Center for Western Priorities finds American taxpayers could lose more than half a billion dollars over the next decade if Congress lifts the ban on exporting crude oil while leaving intact century-old royalty rates on oil and gas extracted from national public lands.
As a House subcommittee prepares to vote on lifting the oil export ban today, CWP is urging lawmakers to update those royalty rates so taxpayers get their fair share from American oil development.Using data from the Energy Information Administration and a report commissioned by the American Petroleum Institute, CWP calculated the difference between expected royalties under the existing antiquated 12.5 percent royalty rate and the 18.75 percent royalty rate that’s currently assessed on oil from offshore leases.
“Using the oil industry’s most conservative estimates for new production if the export ban is lifted, we found that taxpayers will miss out on at least 47 million dollars over the next ten years,” said Policy Director Greg Zimmerman. “If production increases to the oil industry’s high-end estimates, we’re looking at hundreds of millions of dollars at stake, even if oil prices stay low.”
TAXPAYER REVENUE LOST BY LIFTING EXPORT BAN WITHOUT MODERNIZING ONSHORE ROYALTY RATES, ESTIMATED FOR 2016-2025
The current oil and gas royalty rates on public lands were set in 1920. The outdated 12.5 percent rate falls well short of the royalty rates on oil extracted from state-owned lands, which range from 16.67 to 25 percent. Last year, oil companies produced nearly 150 million barrels of oil from national public lands—the most production since 2003 and an increase of nearly 50 percent over the last 12 years.
“If our elected officials are serious about being good fiscal stewards for the American people, Congress must use this opportunity to bring royalty rates into the 21st century,” said Executive Director Jennifer Rokala. “In its haste to hand oil companies a major policy victory, Congress risks overlooking a simple and long-overdue fix to guarantee we’re capturing the economic upside of oil drilling.”
The full analysis is available for download at westernpriorities.org. Greg Zimmerman and Jennifer Rokala are available for video and audio interviews. For more information or to schedule an interview, contact Aaron Weiss at 720-279-0019.