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Oil and gas companies are not paying their fair share for extracting our public resources.
Right now, companies hold roughly 50,000 oil and gas leases on more than 37 million acres of onshore federal land ó a footprint larger than the state of Georgia. These leases allow companies to reap tremendous profits from the development of oil and gas on the publicís land. Unfortunately, the American people are getting shortchanged for the extraction of their resources. While oil companies pay a percentage on royalties on oil and gas they produce, they pay far too little to win and hold those leases.
To secure these very valuable mineral rights, sometimes worth hundreds of millions of dollars, companies only have to bid $2 per acre upfront to win the lease and only $1.50 per acre each year to keep the lease.
Thatís right ó a rental of $1.50 per acre per year. This low price was last set by Congress in the 1980s and has not been adjusted since. This can and should be changed.
Oil companies, some of which generate billions of dollars per quarter in profits, should pay their fair share to the American people for the development of the nationís public resources.
Imagine if your rent had not increased since Ronald Reagan was president, or if the local grocery store had not raised its prices since 1987. This scenario may sound too good to be true, but in fact, that is exactly the sweetheart deal that we are currently giving the oil and gas industry. It is a sweetheart deal that should end. All Americans must deal with the unavoidable reality of inflation, so why shouldnít oil and gas companies?
This is why, as members of the House Natural Resources Committee, we are proposing a modest increase in the leasing rates: setting the minimum bid at $4 per acre, increasing the rental rate to $3 per year and mandating that these values be periodically adjusted for inflation. Our proposal is not a radical idea. H.R. 3859, the Oil and Gas Leasing Inflation Adjustment Act, is common-sense, fiscally responsible legislation that helps ensure the American people get their fair share for the use of their resources.