Utah missed out on millions in royalties from oil and gas, group argues. The industry disagrees.

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A report from a nonpartisan watchdog group states that Utah taxpayers have missed out on millions in revenue from oil and gas leasing on public lands because the federal government hasn't charged competitive royalty rates. Congress voted last year to update royalty rates and rents for oil and gas production on public lands, and now the Department of the Interior looks to codify those changes — as well as increased bonding amounts — in a proposed rule.

Taxpayers and the state stand to benefit from increased royalties for oil and gas companies, but the industry claims that American energy will suffer from making the process more expensive.

The watchdog group’s mission, according to its website, is to “ensure that taxpayer dollars are spent responsibly and that government operates within its means.” Taxpayers for Common Sense has long argued that “These are the resources that we own and the federal government is stewarding them for us,” Autumn Hanna, vice president of Taxpayers for Common Sense, told The Salt Lake Tribune. “They should be representing our interests and making sure these systems do not lag behind states and private landowners. We are the landowner in this case and we should be getting a fair return.”

Utah has leased 2.4 million acres of public land for oil and gas production as of the end of the 2022 fiscal year, according to the BLM. The report by Taxpayers for Common Sense argues that Utah should have seen more revenue from oil and gas production on this land, but below-market rent rates and royalties stood in the way.

The federal government charges leaseholders in several ways. First, the federal government charges rent for owning the lease before production begins. Also before production, producers must post a bond that will cover

 

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