It’s time oil and gas companies drilling on public lands pay their fair share

This opinion column was submitted by Christi Cabrera-Georgeson, director of policy and advocacy for the Nevada Conservation League and a Reno native.

As Nevada families struggle to afford some of the highest gas prices in the nation, oil and gas companies post record profits and seek to exploit the federal oil and gas rental program by pushing for a better access to our public lands for drilling. More drilling will do nothing to lower gas prices; however, it will help oil executives rake in even more profits by abusing the federal government’s failing leasing system and putting Nevada’s public lands, natural resources and communities at risk.

The federal onshore oil and gas royalty rate was established over 100 years ago under the Mineral Leasing Act of 1920 and has not been increased since. This rate, along with other tax rates and conditions for renting and drilling on our public lands, has never been adjusted for inflation, advances in drilling technology, or even just to match the federal rate. offshore. As a result, oil companies are allowed to lease our public lands for pennies on the dollar and unfairly profit at the expense of taxpayers. While oil and gas CEOs rake in record profits, taxpayers lost at least $13.1 billion in revenue between 2012 and 2021, according to a recent analysis by Taxpayers for Common Sense.

Oil and gas leasing is bad business for Nevada, forcing us to auction large amounts of our outdoor spaces at a price that does not reflect the true value of our public lands – a fact that is all the more egregious. that our state rarely produces oil and gas to begin with.

That’s why the Department of the Interior’s decisions in recent federal oil and gas lease sales to limit leasing to only areas near existing development and to require a long-overdue increase in the royalty rate for any lease sold. were policy changes so significant that made sense. The industry has said an 18.75% royalty rate would be too high, but sales results — including in Nevada, where oil and gas companies have bought up half the acreage on offer for lease — prove that the new rate has not deterred corporations from plundering public lands. This rate must now become permanent, so that taxpayers do not continue to lose significant revenue that could be used in our communities.

Updating the royalty rate to require oil and gas companies to pay their fair share for drilling on public lands is one of many changes needed to reform the federal oil and gas program. Even after oil and gas CEOs spent months asking to lease more public land for sweetheart deals, the industry still left land on the table that was made available for lease. Land that the industry chose to give up in the June sales is now available for non-competitive leasing – a harmful practice that fosters speculation and allows companies to buy up unsold leases at discounted prices for up to two years later. the auction. Uncompetitive renting is already a serious problem in our state; these behind-the-scenes deals rarely generate benefits for taxpayers, and instead lock our public lands into leases and prevent proper management of our exterior for other important uses like wildlife habitat and conservation.

Congress also has the ability to curb speculative leasing and update tax rates and terms for leasing and drilling on public lands to ensure taxpayers get their fair share. The Nevada congressional delegation was among the first leaders to take action to advance these reforms. Last year, Senators Jacky Rosen and Chuch Grassley introduced the Fair Returns for Public Lands Act to, along with other significant updates, increase the royalty rate from 12.5% ​​to 18 .75%, which could generate around $400 million in additional revenue over the next decade. U.S. Senator Catherine Cortez Masto (D-NV) introduced the End Speculative Oil and Gas Leasing Act to ban oil and gas leasing on land known to have little or no development potential, and Rep. Susie Lee ( D-NV) sponsored the House Companion. to Senator Cortez Masto’s bill.

Updated federal onshore tax policies will have no effect on gas prices, but will ensure that taxpayers receive a fairer share for the use and extraction of public resources while reducing speculative leasing practices that harm Nevada’s public lands. I am grateful that the Biden administration decided early on to implement a higher royalty rate for last month’s lease sale. Now the Department of the Interior and Congress must follow the lead of our Congressional delegation and make these and other reforms permanent. This is the way to make this system work better for everyone, not just oil and gas CEOs.

Christi Cabrera-Georgeson is a lifelong resident of Reno, Nevada, and has advocated for tough environmental legislation as Director of Policy and Advocacy for the Nevada Conservation League.

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