At least as far as what they pay the government to drill on our land. The companies pay the feds a royalty of 12.5%. That's the same rate they paid in 1920, ninety-five years ago. The fed rate is one of the lowest in the world. The states do better, some of them get double that, 25%.
But the royalty is not the only money the fed gets from these companies. There is something called a bond. When an oil and gas company successfully bids on a lease, it must post a bond—or insurance—to guarantee that it will comply with the terms of the lease, including cleanup costs for unseen disasters during production and after the well stops producing. The bonding requirements on federal land have not been updated in more than 50 years. Currently, under regulations set in 1951, a company can secure a nationwide bond for all its oil and gas wells on public lands for only $150,000. This works out to less than $100 per well. Yet, reclaiming a well can cost anywhere between $2,000 and $30,000.
Then, there are the bonus bids, which grant the company the right to drill on the leased land for a period of 10 years. This costs the companies $2 per acre. Finally, companies pay an annual rental fee to the federal government. Current rental rates are set at $1.50 per acre for the first five years of a lease, and $2 per acre thereafter.
Most estimates conclude that, as a result of these antiquated regulations, we are forgoing more than $730 million in revenue every year.
No comments:
Post a Comment