Bill aims to protect states' shares of federal royalties

US Rep. Cynthia Lummis (R-Wyo.) introduced legislation to ensure states that normally receive half of federal onshore oil and gas royalties under the Mineral Leasing Act actually receive the money.

MLA mandates that the federal government pay states where the federal government controls most of the land 50% of any revenue it collects from mineral leases there to offset taxes which otherwise would have gone to the state and county.

Lummis, who co-chairs the House Western Caucus, and other federal lawmakers from the Rocky Mountains say the federal government diverted nearly $110 million of revenue their states should have received to offset sequestration impacts. “This spring, my home state of Wyoming saw $53 million in royalty funds disappear right before their eyes,” she said on May 14 as she introduced her bill.

Her State Mineral Revenue Protection Act would amend the MLA to grant states the option to collect their share of the mineral royalties, and grant those states full property interest in their share. Participation in the program would be voluntary, and states could still continue to participate in the current federal royalty distribution system.

Operators in states that choose to collect their part of a federal royalty would pay the state share directly to the state, and also pay the federal government its 50% share. The royalty rate itself would not increase under the bill.

“It is becoming more and more apparent that when the federal government is a middle man for funds owed to the state, the middle man cannot be trusted to make the payments,” Lummis said. “The solution? Remove the middle man. States are fully capable of collecting these royalty payments, and states are much better off if their share of the revenue never leaves the states’ borders.”

US Sen. Mike Enzi (R-Wyo.) introduced similar legislation in the Senate. “It sets a dangerous precedent when Washington thinks it’s ok to take state money instead of cutting its own spending,” he said. “The government needs to uphold its end of the deal.”

The Energy Producing States Coalition, a group of state legislators founded in 2011 to work together to develop areas of common interest on policies and issues that affect domestic energy production and transmission, applauded both bills.

“EPSC believes that withholding state mineral revenue payments under any circumstance is inappropriate and supports congressional actions to eliminate the possibility of any future occurrences,” it said on May 14. “EPSC encourages their entire congressional delegations to support this important legislation.”

Contact Nick Snow at nicks@pennwell.com.

Related Articles

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected