Washington, DC — Today, government watchdog Accountable.US released a report showing that while President Biden’s conservation agenda stalls, his administration has continued giving wealthy oil and gas companies a “sweetheart deal” to drill on public lands across the United States. As a result, states like New Mexico are missing out on millions in additional revenue, which funds government services including public schools.
According to the Accountable.US report, New Mexico could have seen as much as $800 million in additional revenue in 2019 alone if the Biden administration had finally updated the U.S. public lands leasing program to charge wealthy oil and gas companies royalty rates in line with what states charge rather than the current federal rates that have not changed in 100 years.
As Politico PRO reported, “the Biden Interior Department approved nearly 900 more permits to drill on public land in 2021 than the Trump administration had in its first year in office, according to an analysis from progressive group Center for Biological Diversity.” New analysis from Accountable.US shows 1,945 of those permits were in New Mexico.
The Biden administration is allowing critical land conservation efforts to languish while they are busy handing out drilling permits on public lands to wealthy oil and gas companies. The fact that they approved nearly 900 more permits in their first year in office than Trump did in his first year is incredibly disappointing. For too long, the oil and gas industry has refused to pay a fair price for drilling on leased public lands. New Mexico’s public schools are being cheated out of potentially millions in additional funding. It is time for the Biden administration to put the interests of New Mexico families first by reforming the public lands leasing program without further delay.”
Jordan Schreiber, a spokesperson from Accountable.US
The Accountable.US report also identifies the major oil and gas companies that benefit most from the outdated federal leasing program. New Mexico has 7,772 oil and gas leases totaling 4.3 million acres of federal land. The 19 biggest lease holding corporations in the U.S. hold nearly 2.3 million acres of public land in the state – 53% of the state’s federal acres – across 4,615 leases, where they benefit from outdated federal leasing terms. Top lessees in the state include:
- Hilcorp Energy: A billionaire-owned private company that leaks methane at a six times higher rate than biggest oil and gas companies, especially out of its San Juan Basin operations.
- Occidental Petroleum: An oil and gas giant that was ordered by courts to pay at $15 million for dodging royalties in 2020 alone on top of billions in environmental violations.
- EOG Resources: A former Enron company that has faced millions in lawsuits over failing to pay royalties.
- Burlington Resources Oil & Gas Company: A ConocoPhillips subsidiary has paid $92.5M to settle lawsuits over unpaid royalty payments in New Mexico.
The 100-year-old royalty rate has long made federal oil and gas leasing a sweetheart deal for Big Oil at the expense of taxpayers. When oil and gas corporations drill on public lands, they compensate the American people with royalty payments, an important revenue that funds important state and local government services, especially public schools.
The Mineral Leasing Act of 1920 set the current public lands oil and gas royalty rate at 12.5 percent, a number that is substantially lower than what western states charge on state public lands. For example, New Mexico’s royalty rate can be as high as 20 percent. If the federal rate were more in line with what states charge, New Mexico might have seen $800 million more in revenue in 2019 alone.
The report also shows how the oil and gas corporations taking advantage of the outdated federal leasing program have a history of exploiting public lands in New Mexico:
- Hilcorp Energy: Privately owned, it emits huge amounts of methane from its New Mexico operations while its billionaire owner saves big thanks to outdated royalty rates.
- Occidental Petroleum: Has tried to skirt royalty payments and has been fined $34 million for filing false claims with the government on top of $5.4 billion in environmental violations.
- EOG Resources: EOG Resources hoards 390 leases in New Mexico while repeatedly failing to pay hundreds of thousands of dollars in royalties.
- ConocoPhillips, Devon Energy, And Southland Royalty: Have been forced to pay upwards of $141M for attempting to skirt royalty payments in New Mexico.
For all of the details, read the full report from Accountable.US here.