05-02-09 by dugan
Oil companies have ruled in Washington for a couple of decades, paying lower federal fees than in any other developed country. There’s a shimmer of a hint that situation might change. CQ.com (subscription barrier) reports that a bill is floating around to raise the royalties paid for oil and gas leases on federal lands and in the Gulf of Mexico. Here’s hoping it has a better chance than an oil extraction tax in California.
The bill is being offered by Rep. Nick Rahall of West Virginia, chair of the House Natural Resources Committee. (Easy for him to do, since his state produces only coal, and more tax on oil might keep coal taxes lower). But good for him, anyway. Here’s the gist of it, from CQ:
The draft bill would raise the rates oil and gas companies pay to
drill on public lands for the first time since the 1980s, increasing
royalties from 12.5 percent to 18.75 percent. It would also shorten
drilling lease terms from 10 years to five years and require companies
not actively using leases to pay a fee, a variation of the “use it or
lose it” concept Democrats pressed during the 2008 presidential
campaign.The U.S. government receives one of the lowest rates of return in
the world from oil and gas leases, according to a 2007 Government
Accountability Office study.The bill also would eliminate a “royalty in kind” program through
which leaseholders could pay royalties in oil or gas. Offshore drilling
leases would have to meet a “no discharge” requirement to diminish
ocean pollution. And energy production leasing rules would also expand to include renewable sources such as wind and solar.In addition, the bill would set up strict new ethics penalties on employees involved in energy production who behave “in an unethical or unprofessional manner” or accept gifts from industry employees. It would also bar energy production employees from working for other entities conducting business with the department.
What’s up with the ethics clauses? You might remember what happened in Colorado.