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Fuel Fix - Lawmakers Seek Details on Oil Royalties, Hardrock Mining Payments

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By Jennifer A. Dlouhy

Western lawmakers are asking congressional investigators for a detailed accounting of the oil, gas and minerals recently extracted from public lands and waters, as part of what they described as a bid to make sure taxpayers are getting a "fair return" from the development.

The push by Rep. Raul Grijalva, D-Ariz., and Sen. Tom Udall, D-N.M., comes as a special 12-member congressional committee searches for ways to pare at least $1.2 trillion from the federal deficit over the next 10 years.

"We're talking about radical cuts and reductions in Medicare and Social Security," Grijalva said. But "here we have public lands and the Outer Continental Shelf owned by the American people in which significant activity is going on."

Grijalva and Udall have asked the Government Accounting Office to outline the amount of minerals extracted from federal land and the OCS in fiscal 2010, as well as the estimated dollar value of those materials. The pair also asked the GAO, Congress' investigative arm, to detail how much the federal government collected for the minerals in royalties, rents and bonus payments.

Although the U.S. government collects royalties for oil and gas extracted from public lands and federal waters, the same isn't true for hard rock mining of silver, gold, copper and other minerals on federal land. The federal government currently does not collect royalties for mineral development on public land.

President Barack Obama proposed changing that practice in his fiscal 2012 budget request earlier this year, and the idea has been debated sporadically on Capitol Hill.

Udall said that "an objective analysis of the business of mining and mineral leasing on federal lands" would pave the way for an informed debate about federal royalties.

"America's abundance of natural resources belong to the public and should benefit the nation as a whole, especially at times of large budget deficits," Udall added.

Grijalva said the government analysis would add "perspective." He complained that there has been a "rush to judgment over the last few months," with drilling and mining advocates insisting that more development will lead to energy independence and new jobs.

"That has been the mantra now for eight months," Grijalva said, but "we're having this discussion in a vacuum."

"Everything is built on assumptions . . . that as we create a less regulatory environment, as we undo NEPA (the National Environmental Policy Act), and as we undo other protections, that there is going to be a massive blossoming of jobs and exploration activities."

Any new data about revenue from oil and gas development -- and the lack of royalties from hardrock mining -- could pave the way for changes on Capitol Hill. Interior Secretary Ken Salazar also has been examining royalty rates charged for oil and gas extracted from public lands and waters and has raised the possibility that some of those charges could be hiked.

Conservationists applauded the move. Matt Garrington, deputy director of the Checks & Balances Project, said Grijalva and Udall's request marked "an important step to stopping the giveaway of our public lands to Big Oil."

Oil industry advocates have argued that one of the best ways the deficit-cutting committee can raise money and pare the debt is by expanding energy development on public lands and waters, because that would generate federal revenue in the form of royalties, bonus bids and other fees.


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