Outgoing New Mexico Senator Tom Udall and Sen. Chuck Grassley (R-Iowa) introduced the Fair Returns for Public Lands Act in February in an attempt to “modernize” the public lands royalty system and increase returns from federal land use by $200 million to federal and state taxpayers in the next 10 years. The proposed bill from February is getting more attention as Udall makes his exit from the national legislature and pens an op-ed in the New york Times with fellow Senator Chuck Grassley.
“Updating our oil and gas leasing laws is just the first step that the federal government should take to make sure taxpayers get a fair deal while protecting our public lands,” read the column. “We hope our colleagues in Congress agree and move expeditiously to pass our bill before this legislative session ends in January.”
The royalty rates oil and gas operators pay for energy development on federal land were set in 1920. The Act From Senators udall and Grassley would increase the rates and the share received by taxpayers to reflect market values. When the royalty rate of 12.5 percent of the value of what is extracted was set, the senators argued oil and gas industries were much smaller, as the automobile had yet to come into prominence, and the rate should be raised to reflect the industry’s growth. If passed, the Act would raise the royalty rate to 18.75 percent. Conspicuously absent from the op-ed is any consideration to what effect the rate change would have on the jobs and revenue for states like NM who depend on energy production for much of the state budget. Click HERE to read the Op-Ed