Source: CVDaily Feed
SALT LAKE CITY – There has been talk recently of possibly lifting the crude-oil export ban, opening up new markets for American oil – and that means more money for Utah. How much more is examined in a report from the Western Values Project, which makes the case that the onshore royalty rate should be boosted to at least match the offshore rate.
Western Values Project Director Ross Lane said the royalty rate (a fee paid to the federal government for extracting oil and gas from public lands) is just 12.5 percent – a rate set nearly 100 years ago that has not been changed.
“The Government Accountability Office released a report that came to pretty much the same conclusion – that the Interior Department has languished in fulfilling its duties of making sure taxpayers get a fair return,” Lane said.
The federal royalty charge is split with states about 50-50. The report estimates that if the rate at least matched the offshore charge, which is 18.75 percent, Utah would have seen an additional $66 million in 2012.
Raising the royalty rate is unpopular with oil companies, which have warned it would mean lost jobs and higher prices at the pump. Lane pointed out that the U.S. royalty rates are among the lowest in the world; Canada charges up to 45 percent and there are still plenty of jobs and plenty of oil business for that country.
“This is American energy. This is an American resource coming off American lands – publicly-owned lands,” Lane said. “It’s only right that taxpayers see a benefit.”
Lane also pointed out that the royalty rate for Utah-owned lands is higher than the federal rate – coming in at nearly 17 percent, and Texas receives a 25 percent royalty on gas and oil removed from its state-owned lands.
The full report, “The Oil Export Ban and the Taxpayer: Low royalty rate ensures Americans lose,” is available at http://westernvaluesproject.org.