Sunday, June 23, 2013

Why Cap the Take?

The title of this blog was the title of an editorial in the Albuquerque Journal back in the mid 1980's when I was State Land Commissioner.  I was attempting to raise the oil and gas royalty rates paid to the state land office.  The Journal agreed back then that it was the right thing to do.  The legislature agreed and a new royalty system was introduced and passed that increased by up to 50% the amount of royalties paid to the Permanent Fund from all new leases.  Back then the oil and gas industry put up a token fight against the new rates, but they realized they couldn't justify their stand because of what private land owners were demanding and getting in royalty agreements.  Plus, all the other states around us had already raised their rates.

This morning the Journal ran a column by Michael Coleman about the many states that are demanding that the federal government, aka the Bureau of Land Management and others, start charging a fair market royalty for all of the drilling on federal public lands.  They still only charge a routine 12.5% or so while everyone else gets up to 25%.  If this situation isn't indicative of failed GOP and Democratic Interior department policies then nothing is.  The BLM, White House Chiefs of Staff, Senators, Congressmen and others have all sold out to big oil in keeping these rates so low over the years.  It is corruption in its most basic form.  And it costs the states a bundle because they share in the royalties charged by the Feds.

This might be a great issue for Senator Martin Heinrich to tackle.  Senator Udall might help, but he has been around a long time now and has done nothing because he fears the oil and gas boys.  Meanwhile, what will we hear from Governor Martinez on this issue?  We will see as soon as the oil boys write her news release for her.

I am overjoyed the Journal did this story, like the one AP story they ran on the dangers of fracking to our water supplies.  I hope they won't treat it like the one day scandal story they did on Heather Wilson's fraud on taxpayers.  One day and they forgot all about it.

1 comment:

Bubba Muntzer said...

I read in the Farmington paper that drilling activity is way down in the San Juan basin because the commodity prices are low. Many wells have been capped.

The prices will go back up again eventually. This might be the best time to get something like this passed, while they're not paying royalties and before the campaign donations start flowing again.