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Advancing Utah's Energy Future

Budget deal cuts oil and gas royalties to Utah, other states

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By Matthew Daly | The Associated Press
December 21, 2013

Washington » The budget deal in Congress will cost Utah, Wyoming, New Mexico and other states $415 million in lost oil and gas royalties over the next decade, according to the Congressional Budget Office.

Legislation implementing the agreement makes permanent an effective 51-49 percent split that favors the federal government in dividing the 12.5 percent royalty collected from energy companies on oil and gas production on federal land.

Until 2008 when the Interior Department began setting aside 2 percent of the royalties as an administrative fee, the split between the federal and state government had been 50-50. The administrative fee, renewed several times by Congress, had been scheduled to expire in January.

The government last year paid $2.1 billion to 35 states under the royalties-splitting program for on-shore oil and gas production on federal lands. The largest payments went to five Western states: Wyoming, New Mexico, Utah, Colorado and California.

Returning to the effective 50-50 split would have provided Wyoming an extra $19 million next year and nearly $200 million over the next decade. New Mexico would have collected an additional $10 million next year and Utah $2.8 million.

While supporting the budget deal, Rep. Rob Bishop, R-Utah, said making the 51-49 split on royalties permanent “has an extremely negative impact, primarily on the Mountain West.” (…)

To read more, visit the Salt Lake Tribune.