Feds weigh drilling fee hike

The Obama administration has begun considering whether to increase rates and royalties imposed on oil and gas companies drilling on federal lands.

The Bureau of Land Management announced Friday that it will seek public comment on rules making changes to royalty rates, rental payments, lease sale prices and other compensation for onshore oil and gas work on federal lands. 


Federal regulators and inspectors have questioned whether the government is leaving money on the table by charging relatively low royalties for onshore drilling on federal lands. The current royalty rate for public land leases is 12.5 percent of the production value. Some states have higher rates — Texas charges 25 percent, according to the Center for Western Priorities — and the rate for offshore drilling is higher, as well.

Interior Secretary Sally Jewell said BLM’s regulations “have not kept pace with technology advances and market conditions” for onshore drilling.

“It’s time to have a candid conversation about whether the American taxpayer is getting the right return for the development of oil and gas resources on public lands,” Jewell said in a statement.

Energy producers, though, warned against raising rates at a time of soft oil prices.