What risk does the government take in developing the fields? If you didn't have the producers who would get the oil/natural gas to the market? Not the government. How does the government spend the money (royalties) better than the producer?
"What risk does the government take in developing the fields?"
Well, it is government property. Same risk any mineral owner takes.
"If you didn't have the producers who would get the oil/natural gas to the market? Not the government."
PEMEX and other nationalized companies notwithstanding, exactly my point.
"How does the government spend the money (royalties) better than the producer?"
I don't understand this question. The government owns the oil and gas. It's in the ground. A private company gets it and splits the revenue with the owner, who just happens to be the people of the United States, in this instance. That's the way it works with private land. What, should the taxpayer give money away for no reason, just because it is government land? I don't think so.
The government does with the cattle, too. I ranch, in part, on some federal land in New Mexico. Should I not have to pay rent because the landowner is the government? Of course not.