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Committee Proposes Cut in Royalties Paid to Drill on Public Lands

More oil and gas drilling on public lands in Montana can be expected if the Interior Department cuts royalty rates. (Roy Luck/Flickr)
More oil and gas drilling on public lands in Montana can be expected if the Interior Department cuts royalty rates. (Roy Luck/Flickr)
March 1, 2018

HELENA, Mont. – A U.S. Interior Department advisory committee proposed on Wednesday that companies pay less in royalties to taxpayers for the right to drill and dig on public lands.

The Royalty Policy Committee is made up of fossil fuel industry representatives and delegates from top energy producing states. There's also smaller representation for tribes and academics, some of whom have been tied to oil and gas companies.

Members were appointed by Interior Secretary Ryan Zinke. Dan Bucks, former director of revenue for Montana, says the committee has largely met in secret up to this point and that energy companies have been driving the process.

"Companies are seeking various measures that make it easier for them to pay less in royalties, to lease federal minerals at bargain basement prices, and to not be as diligent in meeting their environmental responsibilities," says Bucks.

The energy industry says lower royalty rates are needed so they can do more business on federal lands – thus bringing in more royalties for the federal government. Most of the top energy producing states and public land acreage is in the Mountain West.

Bucks says the Interior Department uses the concept of energy dominance to defend more extraction of fossil fuels. However, he says energy dominance flies in the face of the multiple use policy on public lands enacted by Congress, which says lands must also be set aside for recreation, wildlife, clean air and water, and other uses.

He says the Interior Department has set up a "rigged lottery" for the fossil fuel industry.

"It's really contrary to the law that says you're supposed to not pick a winner in advance and you're supposed to consider all of the competing uses for the land and pursue development in a balanced way," he says.

The committee also proposed cutting the royalty rate for offshore drilling to the lowest rate possible under federal law.

Eric Tegethoff, Public News Service - MT