| The Honorable Nancy Pelosi Speaker of the House U.S. House of Representatives H-232, U.S. Capitol Washington, D.C. 20515 The Honorable Kevin McCarthy Minority Leader U.S. House of Representatives H-204, U.S. Capitol Washington, D.C. 20515 | The Honorable Charles Schumer Majority Leader U.S. Senate S-221, U.S. Capitol Washington, D.C. 20510 The Honorable Mitch McConnell Minority Leader U.S. Senate S-230, U.S. Capitol Washington, D.C. 20510 |
April 1, 2021
CC: Chairmen Sanders, Yarmuth, Wyden, Neal, Manchin, and Grijalva
Dear Speaker Pelosi, Majority Leader Schumer, Minority Leader McCarthy, and Minority Leader McConnell:
President Biden was elected on the promise to take bold action on climate change, and he will need the support of Congress to make good on this promise. Nearly a quarter of U.S. climate emissions come from the extraction and burning of fossil fuels from our public lands and waters. For decades, the fossil fuel industry has benefited from outdated leasing policies that allow oil, gas, and coal companies to rip-off taxpayers and thwart efforts to preserve our public lands for future generations. You have the power to change this.
Our nation faces unprecedented challenges, from the ongoing pandemic to the accelerating climate crisis. We cannot afford to wait any longer to take common sense actions that prioritize our shared future ahead of propping up fossil fuel companies. Congress must advance economic recovery legislation quickly to support the needs of taxpayers, our communities, and our climate.
We urge support for the below items to pass in any upcoming moving legislative vehicle, includ- ing budget reconciliation:
Raise Onshore Royalty Rates. U.S. taxpayers and states lose millions, and in the case of some states like New Mexico, billions of dollars from outdated oil and gas royalty rates for extraction on public lands. The current federal royalty rate of 12.5 percent was set in 1920, but today, some states like Texas charge up to 25 percent. At a minimum, we must raise onshore royalty rates to 18.75 percent, consistent with federal offshore rates. Recently, the Government Accountability Office (GAO) and the Congressional Budget Office (CBO) both concluded that improved royalty rates could increase federal revenues by $20 to $38 million per year.
Increase Onshore Bonding Requirements and Fund Reclamation. Companies should pay to clean up their oil and gas operations, not taxpayers or private landowners. But, orphaned and abandoned wells have been an issue for decades due to insufficient bonding requirements. The rules setting minimum bond amounts are more than 50 years old, and bond adequacy reviews and associated increases are delayed and inadequate. As of today, the Bureau of Land Management (BLM) has only $204 million in bonds for all 96,000+ wells under its jurisdiction – or about $2,100 per well. A minuscule amount compared to the average cleanup costs of between $20,000 and $140,000 to plug and reclaim a single well. GAO has found that at least 99.5% of federal wells carry bonds that are insufficient to cover the cost of reclamation. Minimum bond amounts must be updated for inflation and well complexity; raising them to better meet the actual cost of reclamation, as recommended by the GAO. Doing so would also lower potential federal liability when wells are orphaned, as operators fail to pay for reclamation and responsibility falls to the BLM.
Public lands represent our shared heritage and are huge economic drivers for sustainable industries, like recreation. But instead of protecting our public lands and managing them for the public good as required by the BLM’s multiple-use mandate, we have allowed fossil fuel companies to profit at the expense of taxpayers, frontline communities, and future generations. By taking action to stop the giveaways in the federal leasing program, Congress can start to put workers, communities, and the climate first.
Sincerely,
| Clean Water Action Coalition to Protect America's National Parks Conservation Colorado Conservation Lands Foundation Defiende Nuestra Tierra Earthjustice Earthworks Fort Berthold Protectors of Water & Earth Rights (POWER) Friends of the Earth Northern Plains Resource Council Powder River Basin Resource Council Public Citizen Publish What You Pay - USA Rocky Mountain Farmers Union Rocky Mountain Recreation and Wildlife Ini- tiative Rocky Mountain Wild San Juan Citizens Alliance | Greenpeace USA HECHO League of Conservation Voters Montana Wildlife Federation National Parks Conservation Association Natural Resources Defense Council Nevada Conservation League Nevada Wildlife Federation New Mexico Wild New Mexico Wildlife Federation San Luis Valley Ecosystem Council Sheep Mountain Alliance Sierra Club The Wilderness Society Vet Voice Foundation Western Colorado Alliance Western Organization of Resource Councils Wilderness Workshop |