Posted on 05/22/2009 10:10:04 AM PDT by jazusamo
Under a House Democrat-crafted bill described as a “sweeping” reform of federal drilling rules, oil and natural-gas companies would pay more to drill on federal lands and have less time to access the resources.
The measure, crafted by House Natural Resources Democratic staff, raises the royalty fees oil and gas companies pay to drill on federal lands for the first time since the 1980s. It also shortens the duration of federal leases to access those federal resources from 10 years to five.
The proposed changes are likely to draw vocal complaints from oil and gas companies that have already been lobbying against proposals by the Obama administration to rescind $30 billion in tax breaks over 10 years.
“Sweeping reform is not an overstatement,” one energy lobbyist who had reviewed the bill said. “This will get a lot of attention, real quick.”
Some observers said the changes are more in line with what companies would pay private landholders to access their land.
Currently, oil and gas companies pay royalties of 12.5 percent to access federal, onshore resources. That’s less than the royalties companies pay for accessing resources offshore, even though drilling under water is a much more expensive prospect.
One source said companies pay between 18.75 percent and 25 percent royalties to drill on private land. The Government Accountability Office has noted that the United States takes one of the smallest shares of oil and gas revenues of any oil-producing nation, a summary of the bill noted.
Shortening the duration of leases would also bring the contracts closer to the contracts in private land deals, the source said. Oil and gas companies will likely counter that environmental regulations delay projects for years, requiring more generous lease terms.
Ever since gasoline prices spiked last summer, Democrats have searched for a way to force oil and gas companies to drill on the areas they hold under lease.
The Federal Lands and Resources Energy Development Act of 2009 also would reorganize the mineral leasing office within the Interior Department. The Minerals Management Service came under fire a year ago after an inspector general’s report said a Colorado office suffered from a "culture of substance abuse and promiscuity." The office handled revenues from oil and gas leases.
The bill instead would establish an Office of Federal Energy and Minerals Leasing, combining oil and gas, wind, wave and solar programs now managed by MMS and the Bureau of Land Management. It would also end the royalty-in-kind payment system, in which a company can give the government the resource instead of a cash payment.
It would also for the first time impose a royalty payment on uranium mining operations. Revenues from uranium drilling would go to clean up abandoned, non-Superfund uranium mines and mill tailings sites on federal lands.
“Sweeping reform is not an overstatement”
He’s only shutting down the American economy...that’s all.
Boy that will certainly reduce the price of gas and oil. Thanks for saving me money congress. /s
Exactly! Oil and gas will be off limits.
If the new rate is closer to what private owners are asking, I would support such legislation. Why should the taxpayers get shafted (pardon the pun) because the government doesn’t know how to make a hard-nosed deal? I doubt it though. Experience tells me they just want to make drilling tougher.
Come on guys, let’s have real change. Just take away all the private vehicles. Start in the blue states since they are the ones who want it to happen, right?
Every country except ours works to further their national interests. These Democrat creeps are actively working against the country.
Democrat-crafted bill,none of them have ever worked out to be a good thing for America.
Last one out, turn out the lights.
Let the Federal Government restrict their involvement to what the constitution designates to them.
Man........what’s wrong with these people?
Liberals are just freakin nuts....just nuts.
This is more of the Democrats’ never-ending drive to destroy the evil U.S. oil companies and end all domestic production whatsoever, leaving us utterly dependent on part of the world that wants to kill as many of us as it can and impose its so-called religion on the survivors. And/or leave us freezing in the dark as we ride along on our mules. Only then will our Overlords be satisfied. How have we gone so far downhill so fast?
He’s only shutting down the American economy...that’s all.
I am so sick of leftist democrats - they are ill-informed, lazy, mind-altered, delusional, socialist drones who are ruining America. They are absolute maniacs that have been put in charge by the morons who voted for them and the morons who sat at home during elections.
They are trying to choke us.
Until we get to $5.00/gal gas their ‘green’ energy reforms won’t be accepted and the behavior modification programs cannot be completed.
The price of regular gas went from $1.54 after Bush opened up drilling (one year later) to $2.44 today in NY.
The democrats are clearly trying to turn a short term recession into the Great Depression II, by crushing the economy to aggrandize their power.
Gas will be well over $4.00 a gallon if these monsters succeed.
One final point: Remember how the MSM screamed non-stop hysterical bloody murder as gas was $4.00 18 months ago? Notice how the democrat controlled media covers for the democrats without A SINGLE STORY on this gas rise.
There is more to it than that.
For starters, the government ALREADY receives huge tax revenues off of the oil exploration, taxes on profits, taxes on employment etc.
Also, the intangible drilling costs or IDC tax treatment is necessary in order to encourage the high amount of risk that is taken, in any drilling program.
All that does is allow 85% tax write offs (In most cases) for drilling programs, in the year of investment.
This makes sense. Drilling for oil or gas is NOT like a real estate investment. If your tenant goes bankrupt, you can find another tenant. Your property STILL has value.
Not true in the case of a “dry hole” -—
Besides, the tax breaks help produce American jobs and American energy, while producing tax revenue for all levels of government.
“Last one out, turn out the lights.....”
We’ll all be on buses and living in mud huts before you know it!...
Anything to kow tow to the enviro socialists while real domestic energy independence is dissed. When will the public revolt when gas prices go up to $3.00 a gal. again? When will they explode when heating prices go up next winter? When will they finally kick out the socialists when they find out that even Europe continues to build safe nuclear plants for energy?
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