Colorado got $93.2 million as its 50 percent share of federal
royalties from oil and gas production public lands in fiscal 2012, but
the state could have gotten as much as $55 million more if federal
royalty rates were higher, according to a new study from the Center for
Western Priorities.
The center, in a study titled “A Fair Share: the Case for Updating Federal Royalties,” was released Thursday. It’s available for download here.
The federal onshore royalty rate for oil and gas is 12.5 percent, which means that energy companies pay the government $12.50 for every $100 worth of oil and gas that’s produced from federal land.
In Colorado, energy companies pay a higher royalty rate, 16.67 percent, for oil and gas produced from state-owned mineral rights overseen by the Colorado State Land Board.
Money from federal royalties is split 50-50 with the states where production occurs. In Colorado, that money, $93.2 million in federal fiscal year 2012, is then split with the local communities and school districts affected by oil and gas production.
“Hundred-year-old federal royalty rates are putting an unnecessary strain on many western communities,” said Greg Zimmerman, the center’s director.
“Updating the federal rates will mean more teachers in classrooms, more cops on patrol, improved infrastructure, and conservation efforts that keep pace with industrial development,” he said.
If the federal rates were raised to match Colorado’s rates, 16.67 percent, the state would see it’s share of federal royalties jump by an additional $36.6 million. Increasing the rates from 12.5 percent to 18.75 percent would raise Colorado’s take by nearly $54.9 million, the center calculated.
Looking at five western states, Colorado, Montana, New Mexico, Utah, and Wyoming, the center said raising federal royalty rates to 16.67 percent would bring a total of an additional $403 million to the states. Raising the rates to 18.75 percent would bring in an additional $604 million to the states, the center said.
http://www.bizjournals.com/denver/blog/earth_to_power/2013/06/study-says-energy-companies-should.html
The center, in a study titled “A Fair Share: the Case for Updating Federal Royalties,” was released Thursday. It’s available for download here.
The federal onshore royalty rate for oil and gas is 12.5 percent, which means that energy companies pay the government $12.50 for every $100 worth of oil and gas that’s produced from federal land.
In Colorado, energy companies pay a higher royalty rate, 16.67 percent, for oil and gas produced from state-owned mineral rights overseen by the Colorado State Land Board.
Money from federal royalties is split 50-50 with the states where production occurs. In Colorado, that money, $93.2 million in federal fiscal year 2012, is then split with the local communities and school districts affected by oil and gas production.
“Hundred-year-old federal royalty rates are putting an unnecessary strain on many western communities,” said Greg Zimmerman, the center’s director.
“Updating the federal rates will mean more teachers in classrooms, more cops on patrol, improved infrastructure, and conservation efforts that keep pace with industrial development,” he said.
If the federal rates were raised to match Colorado’s rates, 16.67 percent, the state would see it’s share of federal royalties jump by an additional $36.6 million. Increasing the rates from 12.5 percent to 18.75 percent would raise Colorado’s take by nearly $54.9 million, the center calculated.
Looking at five western states, Colorado, Montana, New Mexico, Utah, and Wyoming, the center said raising federal royalty rates to 16.67 percent would bring a total of an additional $403 million to the states. Raising the rates to 18.75 percent would bring in an additional $604 million to the states, the center said.
http://www.bizjournals.com/denver/blog/earth_to_power/2013/06/study-says-energy-companies-should.html